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View Full Version : Resale Limitations - Why / How?


Cap
02-03-2001, 06:17 PM
In the "Help Fast" topic initiated by SusanSeng, there is discussion regarding possible refusal by Disney to allow sale of a resale contract if the contract is less than 150 points AND the new owner is not already a member of DVC.

While Disney could exercise its Right of First Refusal clause and buy the contract at the same terms, is there any other reason they could prevent a resale? I don't see any as I looked through my documents, but I did not reread all the hundreds of pages in detail. Members may not further subdivide a contract (e.g. break up a 150 point contract into three 50 point contracts). However, if they have a valid <150 point contract they obtained from Disney, I don't see any other means other than a Disney direct exercise of their purchase rights under the Right of First Refusal clause.

I have 150 points at BWV and an additional 100 points with separate deed at an offsite DVC property. If I were to offer to sell them at >$56 / point and got a buyer, I wonder if Disney would really want to exercise to exercise their option and add even more points to their surplus inventory.

Your thoughts or opinions?

Cap

Richyams
02-03-2001, 06:27 PM
HH points they may buy back, HH will eventually sell out. VB, I don't think they would exercise their first refusal rights. I think they are too desperate to get rid of those points.

"From each according to his ability, to each according to his needs", Karl Marx, pretty sick, huh?

Dean
02-03-2001, 07:05 PM
The ROFR is the only means available to DVC to control the resales to anyone regardless of contract size or use year. Of course the original add on contract must have been sold to a member who had the minimum contract already (currently 150 points). I suspect the number of people interested in selling just the add on seperately is very small, especially when they figure out how much they will actually get. Remember that the broker fees and closing are essentially the same for this size contract as a larger one.

I know of DVC buying back add on contracts for a fairly high per point price when the buyer didn't meet the criterial of 150 points and the same use year. I do know of at least one report of a buyer that bought less than 150 points and also one that bought a different use year their other contract. Rumors abound in this area and I would suspect that the two main resalers would be your best source of information in this area. Remember that it doesn't do them any good to go through the hassle and then have DVC buy it back. Though they might still get their commission, I'm sure it leaves a bad taste in their mouth.

The cost per point for a resale through a broker is likely to be very high for the buyer as well so unless you're set on that home resort, it might not be the best way to go anyway. I wish I had my deed at home to review the wording in the area of ROFR.

Dean