2042 Maintenance Fees

[Orsino]

I was thinking about the end of DVC contracts, and it got me wondering about maintenance fees near the end of the contract. It is my understanding that part of the maintenance fee is for periodic refurbishment of the property. However, at or near the end of the contract, the property doesn't need to be refurbished anymore for the enjoyment of the current owners. What do you think will happen around 2042 (for BCV for example)?

(1) Maintenance fees will drop after the last refurbishment before the 2042 end of contract (for example, 2037 and after). Since DVC won't have to refurbish anymore, it doesn't make sense to collect money for refurbishment. Maintenance fees would still include operation costs.

(2) DVC will collect maintenance fees that include refurbishment even though they won't spend it.

(3) DVC will time refurbishment to finish in 2042 so the property is ready for resell immediately, even though owners won't be able to enjoy the refurbishment.

(4) Something else?

I have problems with outcomes (2) and (3). I'm sure Disney would love to collect more money, but are those options even legal for DVC to do?

 

[SuperRob]

The properties will always need refurbishment. But your use as a DVC member ends when the contacts at that resort come to an end. What will happen then? Will Disney resell the property? Extend the contacts (we know how that went with OKW)? Level the property and build new? We've never seen a property expire, so we don't know. But to answer your questions ...

You stop paying maintenance fees when your contract expires, period, and you get no further points. Will the lack of refurbishment via dues cause current owners to avoid those dilapidated properties? Probably, but I don't know how Disney will resolve that issue. I don't even know if they've considered it, actually.

 

[ScubaCat]

They should certainly collect less in the last few years, though, unless they're going to refund that capital reserve fund to all the owners. (I just spit out my water at the absurdity of that thought. That ranks up there with using the words "Potrock" and "generocity" or "concern" in the same sentence.)

 

[Disney Dad ADL]

Maintenance fees are for a lot of things, which are reported in the following categories:

Administration & Front Desk
Audit
DVC Reservation Component (this is the exchange that allows you to book outside your home resort)
Fees to the Division
Housekeeping
Income Taxes
Insurance
Legal
Maintenance
Management Fee
Security
Transportation
Utilities
Ad Valorem Taxes
(and more...)

At BLT (which is my home resort), maintenance is about $0.49 of the $5.28 pp that we pay for MFs. Even if they stopped maintenance completely, MFs would drop by < 10%.

That being said, they are not going to allow the building to go into disrepair as long as they can get all the DVC members to pay for the maintenance. Disney gets back full ownership of the building after the contract expires, might as well keep the building in good condition as long as Disney doesn't have to foot the bill. No downside for them.

In terms of the periodic refurbishments, I'm not actually sure where that comes from in the budget, but there's no "refurbishments" category in the cost components. Maybe they use the capital reserves, or maybe it comes out of Maintenance

When the contract expires, I fully expect DVD to resell the contracts as new DVC contracts, or plan contract extensions prior to the expiration date, unless they feel that DVC is not profitable (though it appears to be so far).

 

[disneynutz]

Heck by then Disney may not even be Disney or they may sell off parks and resorts. We will have sold all of our contracts before they expire.

Bill

 

[LAX]

Just of curiosity and using OP's example, will the BCV owners be paying their last round of dues in January of 2042 right before the contracts expire, assuming the contracts don't get renewed or extended?

LAX

 

[DisneyHumbug]

I just hope I'm around in 2042 - or 2041 to worry about this

 

[kniquy]

Just of curiosity and using OP's example, will the BCV owners be paying their last round of dues in January of 2042 right before the contracts expire, assuming the contracts don't get renewed or extended?

My guess would be that the last dues to be paid would be in 2041, because if i am not mistaken the due need to be paid by feb 15 (correct me if i am wrong). I will be 80 when our AKV contract expires -- like others-- by then i will be dead or have sold the contract.