Enjoying Life as a Senior – Occupation Right Agreements

I’ve found the perfect place to retire,” you say as you wave the glossy brochure in the air.  You have attended a presentation, had coffee at the onsite café, checked out when the Tai Chi classes start, measured the unit for furniture, and been impressed by the new retirement village complex as a whole.  But … you only get the right to occupy!

What is a right to occupy?

An Occupation Right Agreement (ORA) is the Agreement that you sign to allow you to occupy a unit in a retirement village.  It is different to residential care.  The right to occupy is to you only (or both of you if you are a couple), you do not own the unit, you only have a right to live in it.  This right does not pass to your family and cannot be left in a Will.

There are Advantages:

  • You have security of somewhere to retire;
  • No responsibility for building upkeep and maintenance;
  • You will not need to mow the lawns or do the gardens, just enjoy them;
  • Meals and entertainment (some retirement villages have their own picture theatre and pool);
  • Social aspect of being around like minded people;
  • Future heathcare.

Once you have chosen your unit, perused and signed a huge wad of documents with your lawyer, waited for the cooling off period and paid your money, the unit is yours to occupy.

A few Disadvantages:

Financially, you will pay for the right in full.  When the occupation ends, then a payment of around 20% to 30% of your purchase price is retained by the rest home.  This can be an issue for many.  An ORA is not a financial investment.  It is strongly recommended that you discuss your plans with your family.

You also have to pay for monthly village outgoings which may increase over time.

When your occupation ends, the retirement village usually has the ability to sell your right to another person.  Often there is no time frame and your family could be waiting for months before being paid out.  This varies between rest homes.

Family Trusts and ORAs?

In short, the two do not mix.  For those with Family Trusts, usually your family home is owned by the Trust and you will have completed all your gifting.  So how do you pay for your ORA?  One way around this is for your Trust to lend or distribute the purchase price of the ORA to you.  You will remember that there are onerous obligations on trustees to ensure that they meet their requirements under your trust deed.  Your trustees may need to contact all beneficiaries and obtain their approval to any loan or distribution to you.  Careful consideration must be made by the trustees as to the implications on the trust funds held.  However, you are probably a beneficiary of your Family Trust and the trustees need to take you into consideration.  As a beneficiary of your Trust, your future is important to the trustees.


Before you start packing boxes, take your time in choosing what is best for you.  Consider all your options and discuss your future plans with your loving family.

It is a legal transaction and as with all legal documents, it is essential that you get good legal advice.  We will be very happy to assist.

Note:  Katherine’s Blog is not a substitute for legal advice, please contact your lawyer.

Enjoying Life as a Senior – Occupation Right Agreements