$15 per pt extension - why does DVC put burden on owners?

[mlayton14]

I have no problem with the offer currently being distributed to owners to extend contract 15 years, but what I dont understand is why they put the onus on the owners to refuse in writing rather than "if you do nothing, then your contract wont be extended"? Instead, you have to explicitly "opt out" of the extension.


I could see some segment of the population forgetting to do this, and if so they are now stuck with thousands of dollars of commitment/liability?

It reminds me of other sleezy consumer offerings whereby the onus is on you to ACT or automatically increase your stake in DVC ... its very sleezy to me. Why not just say "if you want the extension sign it, if not you have no further obligation past your expiration date"

 

[jarestel]

The papers deeding a member's interest back to DVC are probably legal documents and as such require a signature for all of the usual legal-type reasons. I don't think it's DVC's intention to trick forgetful people into extending their contracts.

 

[RobDoc]

I'm not sure where you have seen what burden will be placed on anyone. To my knowledge the only correspondence OKW owners have received from DVD is a "Notice of 2007 Special Meeting of the Board of Directors". Included with that legal notice is the agenda for the meeting and the resolutions which will be voted upon by the Board and the Members Association at that meeting.

The same letter goes on to explain that, if approved, owners will be mailed everything we need to accept or decline the extension. The next sentence states: "Look for more details in the mail in late September."

At this time, no one knows anything more than there will be a meeting on September 24, 2007 and to assume anything else at this time may be counterproductive. I suspect the format to accept/decline will be relatively simple, but will wait to pass judgement until after having all of the details.

Stay Tuned!

 

[mlayton14]

Ooops thanks for the clarification ... I misinterpreted what the proposal really was (a work in progress).

 

[DebbieB]

I read somewhere that DVC is calling this a "special assessment". So the way they handle it maybe the according to those rules.

 

[Sabor]

Being that DVC is a leased based Time Share - ALL the contracts at a given resort HAVE to terminate on the same date.

The only way to legally do what they are trying to pull off is to extend every single contract - no matter what.

So if it passes , or should I say When it passes every owner will automatically be extendeded , and again for legal reasons if you do not want the burden of the additional 15 years , you would need to sign documentation to give the years to DVD.

That is the answer to the OPs question - Because if you do nothing you would still own those years.

Most likely for those who do nothing , the Special Assesment will become PAST DUE and you would be denied use of your points until you satisfy the assesment in either of the 2 options.

 

[GusMan]

That is the answer to the OPs question - Because if you do nothing you would still own those years.

For clarification - which years are you referring to... from now till the end of the orig contract or the extra 15 years?

Im not sure how this can be considered a special assessment because under that terminology, everyone would be forced to pay it regardless. I dont see how they could deny you the use of what is left of your contract unless you become past due on the terms of that current contract.

The way I see this is that this is a right of first refusal of sorts. They are giving current owners the first rights to extend their contracts at a certain cost. The paperwork is probably a legal way to make sure that people cant come back and say "hey, you never offered me this extension..." or something similar.

Of course, Im not an attorney, and I dont even play one on TV.

I think later Im going to take a real close look at my contract - for future reference.

 

[rugrats2001]

I have no problem with the offer currently being distributed to owners to extend contract 15 years, but what I dont understand is why they put the onus on the owners to refuse in writing rather than "if you do nothing, then your contract wont be extended"? Instead, you have to explicitly "opt out" of the extension.


I could see some segment of the population forgetting to do this, and if so they are now stuck with thousands of dollars of commitment/liability?

It reminds me of other sleezy consumer offerings whereby the onus is on you to ACT or automatically increase your stake in DVC ... its very sleezy to me. Why not just say "if you want the extension sign it, if not you have no further obligation past your expiration date"

You will see all kinds of off-the-wall answers to this question, and any other questions dealing with the OKW extension. The truth is, DVC, who controls the board that is 'acting in the point-owners interest' wants every current point owner to feel that they are giving up something by not taking the extension, instead of feeling that they are choosing whether or not to extend. People who have had no problem with the points ending in 2042 are all-of-a-sudden made to feel that if they don't extend, they are giving up something that they already own. Put this on top of the fear that they won't be able to sell their OKW 2042 when there are OKW 2057 points on the market, and you have a powerful psychological tool working to push people to extend.

 

[GusMan]

Put this on top of the fear that they won't be able to sell their OKW 2042 when there are OKW 2057 points on the market, and you have a powerful psychological tool working to push people to extend.

One might see this as fear, but then again, it may end up being a more than just a psychological tool. Case in point - People can either buy into AKL for about $100 a point (after incentives) and have it till '57 or for $25 less buy into OKW and get fewer years. If someone bought into the extension and brings the expiry date in line with AKV, then there is bound to be some extra resale value involved. Even more so if the extension is offered at $15 a point. And, only a guess, but resale down the road now has a chance to be in line with other, newer resorts. Then again - it could be a wash... You never know.

So, along those same lines, and for the sake of conversation, here is a queston... Take the per point cost of your initial OKW investment. Add in the cost of the extension. What would the total cost be per point overall. Now think of it this way... if you sold your OKW membership at current rates, how would you make out? If you sold your OKW membership at say $90 a point with an extension, how would you make out? Keep in mind, I am adding this in as pure speculation and just for conversation sake.

 

[rugrats2001]

So, along those same lines, and for the sake of conversation, here is a queston... Take the per point cost of your initial OKW investment. Add in the cost of the extension. What would the total cost be per point overall. Now think of it this way... if you sold your OKW membership at current rates, how would you make out? If you sold your OKW membership at say $90 a point with an extension, how would you make out? Keep in mind, I am adding this in as pure speculation and just for conversation sake.

Well, if you could sell your OKW 2042 points for $75 per point, and your OKW 2057 points for $90 per point, you would lose $10 for each point that you extended at $25 and break even if you extended at $15. Not that great a deal to me.

I also don't think that OKW 2057 points will sell for any premium over SSR, and SSR doesn't usually sell anywhere near $90/point resale...

 

[jarestel]

You will see all kinds of off-the-wall answers to this question, and any other questions dealing with the OKW extension.

Right you are!

 

[ReneeMoss]

I have a question that I have not seen addressed..............

In perhaps 5 yrs. ---- Will I be able to sell my OKW 2042 (280pts. ) through another Buyer - and/or NOT THRU DISNEY) if I do NOT do the extension? OR - Will I be forced to pay for the extension @ $25 per point (after February) in order to sell my contracts???

Thanks for your opinions............Renee

 

[Sabor]

I have a question that I have not seen addressed..............

In perhaps 5 yrs. ---- Will I be able to sell my OKW 2042 (280pts. ) through another Buyer - and/or NOT THRU DISNEY) if I do NOT do the extension? OR - Will I be forced to pay for the extension @ $25 per point (after February) in order to sell my contracts???

Thanks for your opinions............Renee

In 5 years you will already have made the decision , either you paid the special assesment or you opted out and signed back the 15 years , you have no choice you will have to do one or the other -- whichever you chose you will still be able to resell your contract.

 

[Sabor]

For clarification - which years are you referring to... from now till the end of the orig contract or the extra 15 years?

Im not sure how this can be considered a special assessment because under that terminology, everyone would be forced to pay it regardless. I dont see how they could deny you the use of what is left of your contract unless you become past due on the terms of that current contract.

I think later Im going to take a real close look at my contract - for future reference.

#1 I am referring to the extra 15 years , once passed every contract is extended 15 years - Like it or not

#2 if you do not sign back the 15 years and do not pay the assessment fee (Meaning Do nothing) - then you will be in default or pass due on the assessment.

#3 If you are not current on your contract - they have the right to deny you use of the points.

#4 Bottom Line is you are forced to make a decision , Pay or sign 15 years over to DVD (2042-2057) , doing nothing will rn the risk of losing use of your current points.

They can deny you use of your current contract because in that contract it allows for special assesments , those assesments are treated as obligations of the members just like dues , and if you dont pay your dues you dont get to play at Disneyworld.

 

[rsinj]

.

 

[murphyjh]

Disney is planning a meeting at which they will unilaterally extend ALL OKW ownership contracts by 15 years. Owners have two options:
1. Send $25 per point to reimburse them for the 15 years, or
2. Sign a deed giving up any ownership after 2042.

What happens if you choose Option 3?
3. Don't send $25 per point and don't sign the deed?

Disney will then put a lein against your ownership that will make it more difficult to sell the property. It seems to me that this is a problem for you only if you intend to sell. If you don't sell, can you just keep sending in your MFs and keep on using your points? I haven't heard of any collection activity planned by Disney, and you haven't agreed that you owe them anything. With Option 3, you are merely abiding by your original contract with Disney, and there in nothing that I can see that is illegal or immoral about it. As for the extra 15 years that Disney has added, you might send them a nice thank-you note.

As 2042 approaches, it gets more interesting, leading to Options 4 and 5:
4. Send Disney $25 per point (2042 dollars, which are much cheaper than 2008 dollars). This would satisfy your obligation to pay them their price for use of the next 15 years (unless they escalate the amount due).
5. Try to just keep on using the property (possibly legal, but not morally right) since you own it until the new end date. You could test the waters by trying to borrow some 2043 points in 2042.

I want to point out that I am not an OKW owner, and I am not a lawyer. I am just asking some questions that are on my mind on this very interesting topic.

 

[JimC]

I suspect the unpaid lien will do more than complicate a sale. Disney could very well treat the lien when it becomes past due just like unpaid dues -- you lose use of the membership. I don't see Disney letting this ride for 35 years, unresolved.

 

[LisaS]

What happens if you choose Option 3?
3. Don't send $25 per point and don't sign the deed?

I agree with JimC. I suspect what will happen in this case is that when you call to make a reservation, MS will say "I'm sorry but there is a lien against your contract and you cannot use your points until you satisfy the lien."

If you owe money to DVC due to unpaid dues, an unpaid balance from a stay at a DVC resort, etc., you cannot make a reservation until you pay up. Failure to either pay to extend the contract or sign over the deed for the extended years could well result in the same situation.

 

[BillPA]

Just another way to look at the cost of this offer.

Don't forget the impact of compounding intrest, I ran the numbers on what that $25 a point will cost you 35 years from now. Using a rate of 8% that $25 will be $369 for each point. Or my 400 points would cost me $10,000 to extend, invested in a SP500 index fund, assuming the average retun of 8% would continue, I would have $147,853. There is no way I would pay $369 for 15 years at OKW or any other DVC location. And remember you have to pay for the years, 2042 to 2057 NOW!!!

Don't just go with your heart on this offer. Be sure you understand what those 15 years are really cosing you. As much as we love Disney and DVC, I really can not justify this enormous expense.

JMHO!

 

[tvwalsh]

I recently sold three separate contracts through TTS. Alll the necessary paperwork was sent to me but it was a whole lot more effort than "check a box." You will have to sign a warranty deed over to Disney. It will have to be signed, notarized, and witnessed by a third party. You will also have to sign a compliance agreement, an occupancy and use affidavit, a seller affidavit, a seller's closing statement and a non-foreign certification. except for the seller's statement, each of these will have to be notarized. The sellers statement needs to be signed and returned only. You will also be given a page of instructions to the seller which is to be checked off, initialed and returned.

This is a fact for any sale!