Retirement Village Units: Is buying off the plans taking a leap of faith?

28 November, 2014 | Carolyn Ranson

With new retirement villages springing up all over Auckland we have had a number of clients looking to purchase their ‘right to occupy’ or ‘occupation right’ off the plans.  Although you are purchasing an occupation right, issues arising from buying off the plans are similar to a conventional property purchase off the plans.  The benefits can be many: you can get in early to reserve your choice of unit and lock in the price. You have a say in the interior design including the fixtures and fittings of the unit. Plus it will give you certainty while providing you with a longer period of time to sell the family home.

However, purchasing off the plans has particular risks. Potential pitfalls to be aware of include:

  1. You cannot inspect the actual property. You must rely on a floor plan, possibly an artist’s impression of the unit or on advertising material, to glean an understanding of exactly what it is you are buying. The risk of this is that there may be differences between your expectation and the finished result. There may also be unexpected changes to the plans and specifications.
  2. There will be uncertainty as to the completion date which may rely upon builders completing work on time, supply of materials and weather considerations. This can make it difficult to plan for the sale of your existing property where an occupation date of the to be built unit cannot be set with any great degree of certainty.
  3. Purchasing early off the plans will usually mean you will be among some of the first residents in the village.  This may mean that the retirement village will effectively be a building site until all development has been completed.  This could be disruptive and noisy and would affect your amenity value and enjoyment.  It may also mean that it is hard to imagine what the village will be like on completion.
  4. You may find your unit is not as sunny and light as you would like. This can be a very important consideration in terms of comfort and reducing heating costs.  However, it can be hard to determine from a set of plans and the sun is the one thing you cannot change!

Ways to minimise these risks include:

  1. Inspect other retirement villages by the same developer or village owner. Check the finished quality and make enquiries as to whether they were completed on time and in accordance with the promotional material.
  2. Get out your compass to determine exactly where you unit will be in relation to the summer and, particularly winter sun.  A good measure is the aspect in relation to sun of your current home. In New Zealand, units with a north facing aspect will be sunnier. Check whether there will be any obstacles that might affect the flow of the sun to your unit, and remember the sun will be lower in the winter.
  3. Obtain precise details about exactly what you are going to get in terms of the finish including the colours, carpets, fixtures and fittings. Make sure that the village agrees and it is in writing.
  4. Find out what the completed village will provide in terms of rest home/hospital facilities and other amenities such as a swimming pool, bowling green, men’s workshop, library, social areas, courtesy bus etc.
  5. Ensure that your occupation right agreement includes a guarantee against defective or faulty workmanship or materials. Often there will be a notification period for these maintenance matters which is typically between 30 and 90 days.  The remediation work should be at no cost to you.
  6. Ensure that the occupation right agreement includes a guaranteed completion date which provides the right for you to terminate the agreement and recover your full deposit if the guaranteed date is not met.
  7. Keep all promotional material, together with any documentation relating to the agreed finishes, fixtures and fittings and also regarding the amenities and services the village will provide on completion.

As with any ‘sight unseen’ purchase, the key to success is doing your homework.  While a certain degree of having faith is required, being well informed and putting in a little thought at the start of the process can pay off when you move in to a brand new, beautifully decorated, sunny unit!

If you would like to discuss any matters related to buying a retirement village unit off the plans, please contact Carolyn Ranson, Property and Elder Law specialist at Smith & Partners by phone on 09 837 6891 or email

Are you thinking about buying a retirement village unit off-the-plans?

Get the right advice before you buy — contact our Elder law expert, Carolyn Ranson today to set up an appointment.

email Carolyn
+64 9 837 6840

About the author

An experienced employment, estate litigation and elder law lawyer, Carolyn completed her law degree at City University, London in 1996. She was in house legal counsel for a large retirement village operator, before entering private practice in 2000. She joined
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