Understanding Retirement Village Contracts and Fees
Understanding retirement village contracts and fee structures is crucial for making an informed decision about your retirement living arrangements. This comprehensive guide breaks down the key components of retirement village agreements and explains what you need to know before signing.
Types of Contracts
Common Contract Types
License to Occupy (LTO)
The most common type in NZ, giving you the right to live in your unit but not ownership of the property.
Unit Title
Less common, provides actual ownership of your unit with body corporate arrangements.
Care Suites
Combines accommodation with access to care services, usually in a serviced apartment setting.
Fee Structures Explained
Understanding the Costs
Upfront Costs
- Entry payment/capital sum
- Administration fees
- Legal fees
- Moving costs
Ongoing Costs
- Weekly fees
- Service charges
- Additional care costs
- Personal expenses
Your Rights and Protections
Legal Protections
- Retirement Villages Act:
Provides legal framework and protections for residents.
- Cooling-off Period:
15 working days to cancel after signing without penalty.
- Statutory Supervisor:
Independent oversight of village operations and resident interests.
Important Contract Considerations
- Always seek independent legal advice before signing
- Understand the deferred management fee calculation
- Check what happens if your circumstances change
- Review the termination conditions carefully
Frequently Asked Questions
What is a deferred management fee?
A fee deducted from your exit payment, typically 20-30% of your entry payment, accrued over 3-5 years.
Can I make changes to my unit?
Most villages require management approval for modifications. Check your contract for specific terms.
What happens if I need to leave?
Your contract should specify the exit process, including timeframes and fee calculations.
Need Help Understanding Your Contract?
Our experts can help you understand the terms and implications of your retirement village contract.
Michael Thompson
Legal expert specialising in retirement village contracts with over 20 years of experience in the sector. Regular contributor to retirement living publications and advisor to industry bodies.