Retirement village contracts in New Zealand, what you sign away and what you get back

Last updated 4 July 2026. The reform section reflects the political state at that date and will be updated as the law changes. This is general information, not legal or financial advice.

More than 53,000 New Zealanders live in close to 490 retirement villages, and most signed the biggest contract of their later lives after a glossy tour and a cup of tea. The village model can be a genuinely good deal, community, security, no maintenance, but the contract is unlike anything else in New Zealand property, and the surprises cluster at the exit. This guide explains what an occupation right agreement really is, where the money goes, and the reform battle now running through Parliament.

What you are actually buying

Four terms carry the whole contract, so here they are in plain English. An occupation right agreement, or ORA, is a licence to live in the unit, not ownership of it. The deferred management fee, or DMF, is the slice of your entry payment the operator keeps when you leave. Relicensing is the operator selling the right to occupy your old unit to the next resident, which is usually what triggers your repayment. And the statutory supervisor is an independent watchdog most villages must have, monitoring the operator’s finances on residents’ behalf.

Because you never own the unit, the operator keeps the freehold, and under most contracts keeps any capital gain when the unit is relicensed at a higher price, though some operators offer gain-sharing contracts, as Consumer NZ’s guidance notes. The licence structure also matters if care needs change, for the rest home subsidy your unit counts at its surrender value, what you would actually get back, not what you paid, a point covered in our rest home subsidy guide.

The money model and the deferred management fee

You pay a large entry payment, often most of the price of the house you sold. While you live in the village you pay weekly fees for services and outgoings. When you leave, the operator deducts the deferred management fee, typically capped at 20 to 30 per cent of your entry payment and usually accruing in full over your first two to five years, per the Retirement Commission’s guidance. Stay six months or sixteen years, the DMF is often the same.

What happens to weekly fees after you leave has three layers, and knowing which applies to your contract matters. The legal minimum under the Code of Practice is only that charges for personal services stop when you permanently vacate, and that outgoings must drop by at least half if your unit has not been relicensed within six months. On top of that, the industry’s voluntary best practice stops weekly fees entirely on vacating, adopted by the six largest operators and covering roughly seven in ten units in larger villages. And the bill before Parliament would make stopping fees mandatory, for future contracts. Ask the specific village which layer you are on, and get the answer in writing.

The protections before you sign

The Retirement Villages Act 2003 front-loads its protections. Before anything binds you:

• You must receive a disclosure statement setting out the money, the services and the exit terms.
• You must get independent legal advice before signing, your lawyer must witness your signature, and they must certify they explained the agreement to you. A village that plays this down is telling you something.
• You can cancel within 15 working days of signing, for any reason, no questions asked.
• Buying off the plans, you can also cancel if your unit is not practically complete within six months of the promised date, and deposits must be held independently and refunded with interest within 10 working days if you ask for them back.
• The Code of Residents’ Rights, which every resident gets, guarantees basics like security of tenure, consultation and access to the complaints process.

Exit fees and getting your money back

Here is the mechanism that produces the horror stories. In most contracts, your repayment is triggered by relicensing, meaning you or your estate wait until the next resident signs up and pays. The Retirement Villages Association’s own executive director put the average wait at around seven to eight months, and where villages do offer a buyback guarantee, the median promise is nine months. Under current law there is no deadline for most villages, and most contracts pay no interest while the operator holds your money, though industry best practice, voluntary, asks operators to pay interest if repayment passes nine months.

Entry payment, ten years ago	$800,000
Deferred management fee at 25 per cent	−$200,000
Capital gain on relicensing at $1.1 million	$0 to you, in most contracts
Repaid to you or your estate	$600,000
When	On relicensing, averaging 7 to 8 months, no interest in most contracts

For families handling this as executors, the wait lands mid-grief, the estate cannot be finalised until the village repays, which is why the reform fight below has such heat in it, and why an up-to-date will matters, see our wills guide.

The law is changing

As at July 2026, the state of play is this. After a review that drew more than 11,000 submissions, the Government introduced a Retirement Villages Amendment Bill now before Parliament, mandatory repayment within 12 months of vacating, interest on unpaid money after 6 months, weekly fees and DMF accrual stopping when you leave, and a hardship scheme for early access, with villages under 50 units exempt from the repayment deadline. The catch that matters most, the new rules would apply only to agreements signed from a year after the law passes. Existing residents, all 53,000 of them, are not covered, a design choice residents’ groups have called out, with one resident branding the delays “kind of piracy”.

Labour has gone further in opposition, promising legislation requiring repayment within three months plus 10 per cent of the money within five working days, announced in June, as we reported. Consumer NZ delivered a petition of roughly 40,000 signatures for a three month limit. Whatever passes, if you are signing now, negotiate as if no reform will save you, because on current drafting, for your contract, it will not.

Complaints and disputes

Every village must run a complaints facility, and the statutory supervisor is your first escalation on money worries. Formal disputes go to a disputes panel under the Act, with a wrinkle worth knowing, the panel is appointed by the operator, a structural tension the review heard plenty about. Panel decisions can be appealed to the courts, and for straightforward money claims the ordinary Disputes Tribunal also remains available. The Retirement Commissioner monitors the sector, publishes reports and educates, but does not advocate in individual disputes, so for a contested exit of real size, a lawyer who knows the sector earns their fee.

Questions to take to the open day

• What is the DMF percentage, and over how many years does it accrue.
• When exactly is my money repaid after I leave, and is there a guaranteed deadline in the contract.
• Do weekly fees stop the day I vacate, and is that in the contract or just current practice.
• Do I get any share of the capital gain, and who bears a capital loss.
• Is interest paid if repayment is delayed, from when, and at what rate.
• If I need care, is there a facility on site, is a bed guaranteed, and what does the transfer do to my ORA.
• What happens if my partner dies or moves to care and one of us stays.
• Who pays for insurance, maintenance and refurbishment at exit, and what does refurbishment typically cost.
• Which operator best-practice commitments does this village follow, in writing.

Take the list, write the answers down, and give both to your lawyer with the disclosure statement. The compulsory legal advice works far better when you arrive with the right questions asked.

Common questions

Do I own my retirement village unit

No, in almost all cases. You hold an occupation right agreement, a licence to live there. The operator owns the property, which is why the exit terms, not the brochure, are the real contract.

What is an occupation right agreement

The legal contract giving you the right to live in a village unit, in exchange for the entry payment and ongoing fees. It governs everything, the services, the fees, the exit money and its timing, and it is the document your lawyer must explain to you before you sign.

What is a deferred management fee

The operator’s cut of your entry payment, kept when you leave, typically 20 to 30 per cent and usually fully accrued within your first two to five years. It funds the village model, and it is the reason a short stay can be an expensive one.

How long until my money is repaid after leaving

In most contracts, when your unit is relicensed to the next resident, which averages around seven to eight months and can run much longer. There is currently no legal deadline for most villages, and usually no interest, which is what the bill before Parliament and Labour’s three month policy are fighting over.

Do you pay weekly fees after leaving a retirement village

It depends on your contract’s layer. The legal minimum only halves outgoings after six months unrelicensed, but the biggest operators voluntarily stop fees when you vacate, and the pending law change would make that mandatory for future contracts. Check your own ORA.

Can I get out after signing

Yes, within 15 working days of signing you can cancel for any reason, and off-the-plans buyers can also cancel if the unit is not practically complete within six months of the promised date. After the cooling-off period, leaving means the exit terms, DMF included.

Where to get free help

This decision travels with two companions, our guides to enduring powers of attorney and the rest home subsidy cover the documents and the means test that usually arrive in the same season.

Have you signed an ORA, or waited on a repayment as a resident or executor? How long did it take, and what would you tell someone at the open day? Share your experience in the comments.