Retirement Villages and Occupation Rights
Insight
Moving into a retirement village is usually a lifestyle decision as much as a property decision. Instead of buying a standard freehold unit, most residents enter into an occupation right agreement (ORA) with the village operator. You pay an upfront sum for the right to live in a unit, but you do not usually own the land or buildings, and you are subject to village rules and ongoing fees.
Because retirement village documents are long, technical and different from standard conveyancing, it is important to understand how occupation rights work, what fees apply, and what happens when you leave, require care or your circumstances change.
How Retirement Villages Work
Retirement villages generally offer a bundle of rights and services rather than a straightforward property purchase. The occupation right agreement sets out how long you can stay, what you can use, what happens if your partner dies or needs higher care, and how your interest ends.
In addition to the ORA, you may receive a disclosure statement, village rules, and information about services and care levels. Together, these documents outline fees, maintenance responsibilities, refurbishment expectations, and rights to transfer within the village.
Retirement Villages vs Freehold or Leasehold
Tip:
When comparing a village unit with a standard property, focus on what you receive back when you leave, not just the upfront price.
Freehold or unit-title ownership gives you a title recorded at Landonline and control over the property subject to usual rules and any body corporate obligations. Leasehold gives you ownership of improvements but not the land, with ground rent under a registered lease.
Retirement village occupation rights are different again. You typically do not receive a title or a registered lease. Instead, your rights are governed by the ORA and the village framework. Exit payments, sharing of capital gains (if any), refurbishment charges and timing of repayment are all controlled by those documents.
Common Issues in Retirement Villages
Common pitfall:
Assuming the full original amount will be repaid when you leave, without accounting for deferred management fees, refurbishment costs or village charges.
Families are often surprised by how much is deducted when a resident leaves, how long it takes to receive repayment, or the cost of ongoing village fees. Other issues include uncertainty about responsibility for repairs inside the unit, refurbishment standards on exit, and limits on making changes to the home.
Disputes may arise if a resident moves to higher care and the timing of selling or re-licensing the unit is unclear, or if family expectations about inheritance do not match the ORA terms.
Key Checks Before Signing
Before committing to an occupation right agreement, it is important to understand the full financial picture and how your rights work over time. A lawyer can review the documents and explain them in practical terms.
Step 1
Entry Price & Fees
Confirm the upfront amount, weekly or monthly charges, and what services are included.
Step 2
Deferred Management Fee
Understand the percentage retained, how it accrues and the maximum amount deducted when you leave.
Step 3
Exit & Repayment Terms
Check how and when money is repaid, what must happen to the unit first, and who carries market risk.
Step 4
Care & Transfer Rights
Review how moves to higher care are handled and whether you can transfer within the village.
Step 5
Rights of a Spouse or Partner
Confirm what happens if one person dies or moves into care while the other wants to stay.
Choosing a Lawyer for Retirement Village Advice
Choose a lawyer who regularly reviews retirement village documentation and can explain the terms in plain language to you and your family. Ask how they approach explaining fees, exit rights and long-term affordability, and whether they can meet with you and any family members who may be involved in decision-making.
Because these decisions are often made later in life, clear communication and written summaries can be as important as the legal review itself.
Find a Lawyer for Retirement Village Matters
Providing the name of the village, a copy of the key documents and your main questions helps match you with lawyers who are familiar with retirement village agreements and typical issues residents face.
Want documents reviewed before you sign?
Tell us which village you are considering and any concerns you have. We’ll connect you with lawyers who regularly handle retirement village contracts.
Frequently Asked Questions
What is an occupation right agreement (ORA)?
An occupation right agreement is the contract that gives you the right to live in a retirement village unit. It sets out your rights to occupy, the fees you pay, what services are provided, and the terms that apply when you leave or transfer to a higher level of care.
Do I own the unit in a retirement village?
In most villages you do not own the unit in the same way as a freehold or unit-title property. You pay for the right to occupy under an ORA and agree to village rules and fees. The operator retains ownership of the underlying property.
What is a deferred management fee?
A deferred management fee (DMF) is a charge the village retains when you leave. It is usually a percentage of the original or resale price, accrued over a set period. It can significantly affect how much is repaid to you or your estate.
Why do I need independent legal advice?
The documents are complex and have long-term financial consequences. Independent legal advice is required so you understand your rights, obligations, fees and what happens on exit or when your care needs change.
How is this different from leasehold?
Leasehold involves owning the building and leasing the land. Retirement villages typically use occupation rights, where you do not own the unit or the land. The rules on fees, exit and resale are set by the ORA and village policies, not a standard lease. For more on land leases, see the leasehold topic page.
You don’t need all the answers
Property issues can feel overwhelming — especially when you’re facing deadlines. Sharing a few details about your situation is enough for a lawyer to understand the context and guide you through the next steps.
Need a lawyer to review retirement village documents?
You can share a summary of the village you are considering, the key financial terms and any concerns you have. We’ll match you with lawyers who regularly review occupation right agreements and retirement village disclosure documents.