As New Zealand’s aged care landscape evolves, operators are increasingly offering care suites to meet residents’ expectations for greater comfort and continuity of care. However, with this development comes the need to ensure that the legal documents governing residents’ rights and care services are aligned and consistent.

Residents occupy care suites under two key documents: the Occupation Right Agreement (ORA) and the Admission Agreement. Each serves a distinct purpose:

• an ORA sets out the terms of the resident's right to occupy their care suite
• an Admission Agreement mainly deals with the long-term residential care services that are provided to the resident

Because these documents operate together, inconsistencies between them can create confusion and potential disputes. For operators who have recently developed new care suites, or are updating their existing documentation, it is essential to ensure these two agreements align.

In this article, we outline five key areas where operators should check for consistency between their ORA and Admission Agreement.

1. Right to remain in care suite

Admission Agreements do not give residents a right to occupy a particular room and operators may move them to another room for operational or care-related reasons (e.g. to position residents with the highest needs closer to the nurses' station).

Care suites are different because when a resident enters into a care suite ORA, they are granted the right to occupy a particular care suite for the entirety of their stay (unless the ORA provides for transfer in certain circumstances).

Therefore, a care suite Admission Agreement should not contain any right for the operator to move the resident to another care suite (unless the resident agrees).

2. Payments

Both the ORA and Admission Agreement contain provisions that set out the daily care fees and additional services fees that residents are required to pay. Operators should ensure that these positions are consistent (e.g. timing for making payments).

The ORA must also contain provisions that set out how the operator will deal with the 18% rebate that the age-related residential care agreement (ARRC Agreement) requires it to pay to ORA residents while they receive residential care.

Operators should also ensure that the sections that set out what would happen if a resident defaulted on any of their payments are consistent. A simple fix is to say in the Admission Agreement that in the event of any payment default, the terms of the ORA would apply.

3. Alignment of termination provisions

The ORA and Admission Agreement will both describe when the resident’s right to occupy and receive care may end, but for different reasons and under different legislation.

Termination provisions in care suite ORAs must comply with requirements under the Retirement Villages Code of Practice. The Code sets out specific grounds for an operator to be able to terminate an ORA and the notice requirements that an operator must follow.  

The termination provisions in the Admission Agreements are less restrictive and typically allow an operator to terminate an Admission Agreement by giving the resident three to four weeks' notice. However, the two documents are interdependent, and it would not be in anyone's interests to have one continue without the other.  

To remove any inconsistences, an Admission Agreement for a care suite should therefore provide that the ORA termination provisions will apply and that the Admission Agreement will terminate on the same day that the ORA terminates.  

4. Temporary absence from Care Suite

Admission agreements must contain provisions that set out the resident's rights in respect of their room, including during any temporary absence.

These rights typically reflect the provisions in the ARRC Agreement that deal with payment for temporary absences. These provisions only assure residents that the operator will not allow their room to be used by any other person for up to 21 days while they are in hospital or 14 days while the resident is away for any other reason.

Because an ORA grants the resident the exclusive right to occupy the care suite, any provision in an Admission Agreement that allows any other person to occupy the care suite during a temporary absence should not apply for ORA residents. The Admission Agreement should also state that no one other than the resident (or residents, if the care suite is jointly occupied by a couple) is allowed to occupy the care suite.

5. ORA will prevail

To address any other inconsistencies between the two documents a general term should be included in the Admission Agreement that says that the ORA will prevail in the event of any conflict between the Admission Agreement and the ORA.  

How can we help?

Ensuring alignment between ORAs and Admission Agreements isn't just about avoiding confusion, its also about avoiding potentially costly disputes later on.  

If your organisation is planning to introduce or expand care suites, our Retirement Villages and Aged Care team can help. We work closely with operators to review, draft and update agreements so they are clear, consistent and tailored to your model.

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