New Zealand, like most of the developed world, is currently experiencing the effects of an ageing population. This means a greater demand for residential property that caters to the lifestyle requirements and social demands older people need. In response, many New Zealanders are purchasing units in retirement villages to ensure their needs are met.
New Zealand a retirement dream
Figures released by Statistics New Zealand show that the number of people aged 65 and over has doubled since 1980. It is also forecast that New Zealand’s population of 65 and over will double once again by 2036. This is expected to be heavily influenced by the volume of baby boomers that move into this 65 and over age group between now and 2036.
When purchasing a retirement unit, it is a requirement to have independent legal advice.
However, unlike what the media says, it is not all bad. In fact retiring in New Zealand is considered by many to better than anywhere else in the world. For instance, the 2016 HSBC Expat Explorer ranked New Zealand joint first for expat experience, citing its healthcare and quality of life the best the globe has to offer.
New Zealand’s exceptional social agencies and the sheer beauty of its natural features make it the ideal place to retire. Yet, as people age, they need housing that caters to their unique needs. To accomplish this, older New Zealanders need to purchase property that is secure, easily maintained and close to health and transport services.
One of the best ways to achieve this is by acquiring a unit at a retirement village or similar facility. Yet, there are a number of specific legal considerations that come with this course of action
Legislative protections for buyers
While buying a unit in a retirement village can be a daunting task, the government did introduce a legislative safety net in 2003. The Retirement Villages Act 2003 (the Act) and its concomitant regulations help protect residents and prospective residents from financial and emotional loss.
The legislation outlines a number of provisions in relation to the obligations of both residents and operators. One of the most important provisions of the Act is the Occupation Right Agreements (ORA) between operators and residents.
An ORA is a legal document that gives an individual (or couple) the right to occupy a residential unit situated within a retirement village for the remainder of their life, or until they choose to leave. It specifically sets out the terms and conditions that are required by the Act and the Retirement Villages (General) Regulations 2006, which sets out a code of ethics for operators.
The Code of Practice 2008 sets out the minimum rights and obligations of retirement village operators and their residents. It provides a number of minimum requirements that all operators must comply with. The Code covers 10 specific areas which include, but are not limited to:
- Staffing arrangements at the retirement villages
- Safety and security of residents and units
- Complaints process
- Maintenance arrangements
- Communication pathways with residents
These conditions are meant to be reflected in the ORA that individuals sign before they move into their unit.
Retirement is a time to relax, not to be caught up in legal issues.Is legal advice important when signing an ORA?
One of the legal conditions of entering into an ORA is the requirement to have independent legal advice. Intending residents must seek legal advice completely independent of their retirement village operator.
The intending resident’s lawyer will explain the general conditions of the agreement and its legal implications. To do this, you need to ensure you have the right advice from a lawyer experienced with ORAs.
Alongside this, a lawyer will be needed to witness the person’s signature as well as certify that the intended resident received an explanation of the ORA in terms they have understood. If the certification is not properly attained, the resident’s agreement could be void and may lead to issues further down the track.
If you are looking at purchasing a unit within a retirement village, it is imperative you seek quality advice from a lawyer experienced with ORAs. Contact Wynyard Wood today to ensure that you understand your rights and obligations under an ORA.