A Contract Question

[Alic]

Does anyone know if you can "Give" away your DVC points? I have a friend who is in financial trouble and can't afford her DVC points. I was wondering if I could just pay it off for her and she could just do a name transfer or something? Does this make sense or sound crazy?

 

[PamOKW]

It has to be a legal real estate transaction. Some other people have raised a similar question lately. There may be a way to work it out so that Disney doesn't exercise their right of first refusal on a low price. You can't just change the name -- the deed itself has to be recorded in your name. I think it's easier for a relative to do this but, hopefully, some of the recent posters will share what they learned.

 

[Alic]

I just called ms and they said that DVC is deeded property and can be passed to anyone - relative or not. The problem there lies that money is still owed on the property. Can my friend just buy it out and then pass it down to me? She really can't afford the maintence fees and to take the trips.

 

[drusba]

You are in a tricky legal situation:

1. Yes, an owner can give away his contract -- that transfer has to be treated as any real estate transfer and thus you need to go through all the usual steps that you would follow for real estate including transfering the deed (and thus there will be extra cost to do that).

2. If one makes a gift of the contract, it is not subject to Disney's right of first refusal which applies to "sales" of contracts.

3. If there is a loan/mortgage on the contract, you cannot just give it away because the lending company will not allow the transfer unless its loan is paid off first.

4. Now your problem: if you pay off the loan and then the other owner attempts to give you the contract, Disney has a grounds for asserting that what really occurred was not a "gift" but instead a "sale" to which its right of first refusal applies since you are actually paying money for the transfer (the money to pay off the loan) and therefore it is entitled to take the contract for the amount you pay -- the loan payoff amount.

 

[Alic]

Thanks for the info. I don't think this will work out. My friend has only paid one year on the contract and I'm sure the loan is all front loaded with interest. I'm liable to pay more than it's actually worth! I just found out that she hasn't made a payment since Oct. (b/c of the financial trouble) so I'm not even sure if Disney hasn't even decided to forclose on it already. What a mess! I would love to help her out and would love to get a good deal on some DVC points but it looks like it's a bigger mess then I want to deal with. Too bad...

 

[manning]

Alic - good move. You don't want to lose a friend over money.



Can she get an equity loan, pay off the loan and just pay the interest on the new loan until she gets on her feet. THEN PAY OFF THE LOAN.

 

[Alic]

Hinestly I think her credit is so screwed from not paying since Oct that I'm thinking nobody will give her a loan. Can you think of anyway this could work out for the both of us...legally?

 

[manning]

Check with Disney to see if they reported it. And have her tell them she is trying to work it out. Never assume. do the homework to see what the situation actually is.

 

[Alic]

I spoke to my friend again and she says she owes a little over $14,000 for 200 pts. at BCV. She also has to pay the maint fees for the year - $700ish. So I'm looking at $15,000. My husband and I were interested in buying 150 points and trying to keep it close to $10,000. Any advice on how I could purchase this from her but keep the cost down??

 

[manning]

You can't. You have to buy the whole 200 points. Only Disney can break up points. I'm assuming there is only one 200 point contract.

Go over to the Timeshare store website and see what re-sale contracts are selling for. If she still has control of the contract, she could put it up for sale. I think someone said they charge a 12 percent commission and the buyer pays the closing costs. Sometimes it is best to cut your losses. I believe all payments would have to be up to date for a clean sale.

 

[Alic]

Thanks - we'll check out the site. I guess it wasn't meant to be...