Annual dues on a Dec UY contract

[ljlaurajane]

I have my eye on a contract which I'm considering putting an offer in for, but it's Dec use year, no 2019 points left but full for 2020. Seller wants buyer to pay the full 2020 points worth of dues, which i technically understand but given the points aren't actually available till December and annual dues run a calendar year, this seems a bit of a stretch to pay a full years dues for 1 months use of points. I know it's all negotiable but interested to hear other options. December UY contracts always hurt my brain

 

[Lorana]

I stand by you on this. I would ask the seller to either pay the 2020 points, split the dues (they pay 11 months you pay 1), or lower the PP To offset the dues cost.

The reality is that dues are based on calendar year, while points are use year. If you bought direct in December, you’d pay a prorated amount of dues for the 1 month, not all 12.

 

[ljlaurajane]

I stand by you on this. I would ask the seller to either pay the 2020 points, split the dues (they pay 11 months you pay 1), or lower the PP To offset the dues cost.

The reality is that dues are based on calendar year, while points are use year. If you bought direct in December, you’d pay a prorated amount of dues for the 1 month, not all 12.

Thanks glad someone agrees with my thinking!

 

[New Mouse]

I have my eye on a contract which I'm considering putting an offer in for, but it's Dec use year, no 2019 points left but full for 2020. Seller wants buyer to pay the full 2020 points worth of dues, which i technically understand but given the points aren't actually available till December and annual dues run a calendar year, this seems a bit of a stretch to pay a full years dues for 1 months use of points. I know it's all negotiable but interested to hear other options. December UY contracts always hurt my brain

Your december 2020 points do not expire until November 2021. Paying full dues is accurate.

 

[CarolMN]

Truly, it really doesn't matter what anyone else considers "fair". Most brokers say that if you get the points, you should pay the MF. They don't care that fees go by calendar year, not use year. In the end, you may be right, but lose out on the contract.

Offer what you are willing to pay. Consider reducing the ppp to offset the MF request. JMHO. YMMV.

P.S. If you lose this one, there will be another, and odds are it will turn out in your favor. Good luck.

 

[macman123]

Supply and demand. Make the offer, they can only say no. If they accept, then you have saved some $

 

[chris_ant]

So this is a interesting question I don't know the answer to, so I appreciate any input/opinions. For simplicity, lets say these owners bought direct in 2000, expires 2050. With a December use year, did they pay full dues in 2000 or 1/12 of dues? If they paid 1/12th, do they owe 11 months dues in 2051 in this example?

 

[CarolMN]

So this is a interesting question I don't know the answer to, so I appreciate any input/opinions. For simplicity, lets say these owners bought direct in 2000, expires 2050. With a December use year, did they pay full dues in 2000 or 1/12 of dues? If they paid 1/12th, do they owe 11 months dues in 2051 in this example?

The first year, direct buyers pay prorated dues, from the date the purchase agreement is signed through the end of the calendar year. This is the case, even if the buyer received prior use year points.

As an example, let's assume the buyer purchased (direct) a December use year for a resort that actually opened in 2018. Buyer signed the purchase agreement on June 1, 2020. Buyer receives 2019 points and will have the 2020 & beyond use year points. For the buyer's first year, Buyer pays prorated dues from 6/1/2020 thru 12/31/2020, so approximately 7 months.

If the resort expires in 2050, the owner pays prorated dues from 1/1/2050 through the actual expiration date. (No one really knows for sure how the last few years will work with respect to points and dues, though).

 

[MICKIMINI]

From my experience buying and selling since 1996, you are getting full use of the 2020 points as you can bank and get 2 years to use them. If there were 2019 and possibly 2018 points banked I would say no though I have paid 50% in the past for a portion of the past MF's, but in that case it was a killer contract with an extra 500 points so well worth a few hundred to get the contract. This is a sensitive point with sellers IMO more so than price PP.

 

[squirrel!33]

I completely agree with your logic! On a VGF contract we recently negotiated, we asked the sellers to pay the 2020 maintenance fees and they agreed. I think the agents just see it as an additional price deduction and present it to the sellers that way but I see it more the way you do.

 

[Lorana]

This is a sensitive point with sellers IMO more so than price PP.

I'll say I've seen this to be true, in my experience of making offers (I have 4 resale contracts). So what I do is if I'm not getting full points, figure out what the MF are for the months I'm not getting, then subtract that from the total, divide by the point total, and then offer that as the price per point instead. I've found sellers are more willing to negotiate on PP than on MF.

 

[MICKIMINI]

I'll say I've seen this to be true, in my experience of making offers (I have 4 resale contracts). So what I do is if I'm not getting full points, figure out what the MF are for the months I'm not getting, then subtract that from the total, divide by the point total, and then offer that as the price per point instead. I've found sellers are more willing to negotiate on PP than on MF.

You think like I do! I still use pencil and paper - you??

 

[EM Lawrence]

I know this is not the “industry norm” on resale contracts, but I prefer the way that it happens in direct sales. You pay prorated MF based on when you take ownership. The dues are tied to the expenses of running the resort. So if I don’t purchase a contract until June of a given year, why should I have to pay for the salaries of the staff and the upkeep of the property for Jan-May? I did not have any ownership interest in the resort during those months.

 

[jarestel]

A December use year makes it seem like you're paying dues on 2019 points but you're really not. We all pay our dues by the calendar year regardless of use year, but we still get 12 months to use the points so your 2020 points are good from Dec 2020 until the end of Nov 2021. If you will receive the full allotment of 2020 points, it's fair that you pay for them.

As others have advised already, you can offer anything you want because it may be accepted.

 

[Sandisw]

I have always asked based on calendar year. If I was getting current UY points, I would offer to cover half of the fees.

Or, adjust my price to account for that.

 

[Fred M]

I have my eye on a contract which I'm considering putting an offer in for, but it's Dec use year, no 2019 points left but full for 2020. Seller wants buyer to pay the full 2020 points worth of dues, which i technically understand but given the points aren't actually available till December and annual dues run a calendar year, this seems a bit of a stretch to pay a full years dues for 1 months use of points. I know it's all negotiable but interested to hear other options. December UY contracts always hurt my brain

I'm reading this differently. I currently have two December use year contracts. I think the seller isn't asking you to reimburse them for the dues they paid in January 2020 (or entered a payment plan for the dues). I read this as the buyer being responsible for the dues starting calendar year December 1, 2020. So buyer assuming the 2020 dues means dues payable between 12/1/20 - 11/30/21.

Reimbursing the seller for January 2020 maintenance fees would be December 1, 2019, use year. Which isn't what the seller is asking for.

 

[ljlaurajane]

This is how it is written "they expect buyer to pay 2020 dues." and it's listed as a reimbursement, so believe they are wanting me to include the full cost for 12/1/19 - 11/30/20. Haven't hear back from the broker yet for confirmation

 

[jarestel]

This is how it is written "they expect buyer to pay 2020 dues." and it's listed as a reimbursement, so believe they are wanting me to include the full cost for 12/1/19 - 11/30/20. Haven't hear back from the broker yet for confirmation

Think of it like this: If you were buying a Feb use year, you'd probably pay with no questions asked. Your Feb use year points are good from Feb 2020 to end of Jan 2021. Now for Dec use year, your 2020 points are good from Dec 2020 until end of Nov 2021. You get the same amount of time to use them, it's just that most of that time is in 2021. It's difficult to separate use years from dues years, but it all does work out in the end! Good luck!

 

[Fred M]

This is how it is written "they expect buyer to pay 2020 dues." and it's listed as a reimbursement, so believe they are wanting me to include the full cost for 12/1/19 - 11/30/20. Haven't hear back from the broker yet for confirmation

In that case, yeah, they need to get bent! Good luck!

 

[AaronEuth]

As a buyer, I would expect to pay dues for any current points purchased. December 2020 points are current, and in full quantity? Buyer would usually reimburse for the dues that were paid for that corresponding year.

Now - to offset that price, go ahead and lower your offer by the dues amount per point. You pay the same as if you got the points for free, but still get to check the box that you paid 2020 dues.

I think this is important, because reimbursing dues for current points is a binary thing. You either do or you don't, and like it or not, the usual thing is to pay those points. Price per point is a fluid thing; the market value of price per point shifts and individual contracts can vary even more. A lower price per point offer, but you pay dues, still gives the seller a chance to feel good and say yes. "I wanted $130 a point, but this guy offered me 122....but my agent advised me that he has seen contracts go at $120...plus this guy is going reimburse me $8 per point for dues. I think this is a good deal." Vs "my agent says that I should get reimbursed for these dues, no deal"