Annual Dues on a resale

[Wislodgers]

We are in the process of buying a resale through Lee Reid. We currently own at VWL and this is also VWL contract. I am wondering how the dues will be billed on the resale..... It has banked points, and is a Sept use year with a full allotment of points in Sept. I understand that on banked points the buyer does not have to pay the dues, but on the points coming in Sept, we of course will have to reimburse the seller. We currently pay our dues on a monthly debit.
Does anyone know how we will pay the dues for this year on the resale? Will Disney just add it to our monthly debit, or will we pay the seller up front at closing? I called Disney and the CM I spoke to said they will just add it to our monthly debit. This didn't make sense to me, what if the seller paid the dues in full for the year in January? If anyone who purchased a resale has any insight I would appreciate it! (I can't wait for the resale to close!)

 

[robinb]

When I bought our resale 5 years ago we had to pay all the dues for the current year at closing. Lee, or the title company doing the closing, should know the answer.

 

[llp479]

You pay the dues to the current owner at the time of closing. Just closed on a resale at OKW in March, and we paid for the dues on the points available on 10/1/02, the start of the current use year.

 

[schucrew]

We just bought a resale and the current year's dues were added into the total due at closing. If they had already been paid by the seller, the seller would be reimbursed; since our seller hadn't paid them yet, the money will go directly to Disney. I think most resales would work the same way.

 

[drusba]

Understand a critical fact: you can negotiate what the division of dues is going to be. However, once you sign the contract which is likely to have a clause on the division you will be agreeing to that clause. Often the form contract will have the buyer reimbursing the seller for all dues for the current year. If the seller is paying monthly then buyer pays seller what he has already paid for the year and then the rest goes to Disney for the remainder of the year (you pay into the closing escrow and it gets paid out at closing). In your case you should be negotiating to pay a pro rata share of the annual dues from Sep to Dec 2002 with the seller paying the share of dues for Jan to Aug 2002; you might accept a different division but that would be a fair negotiating point. In any event, regardless of how they are divided, whatever dues are still owed for the year 2002 will be paid out of funds at closing to Disney. Afterwards you can set up with MS to pay monthly on the new contract beginning Jan 2003.

 

[Wislodgers]

Thanks for all the replies! We were told that on the banked points we do not pay the dues, but on any current points and those coming in Sept, we have to pay the dues on for the year. I do understand that virtually everything is negotiable in a resale. We got the contract at a very good price ($60/point). Also the contract is the same use year we already have, making it even more appealing to us. I was just figuring money(price minus deposit, closing costs and dues) to estimate what we will have to have for closing. We have already signed the contract, and it was sent to Disney a week and a half ago. Closing agency said Disney is slow returning on the ROFR, as they are so busy with BCV! We are so excited to have more VWL points. We debated between BCV or a resale. We made an offer on the resale and it was accepted. So far the resale process has been quite easy, I'll let you know how it goes after closing!!!

 

[Dean]

Without going through specifics to the previous posts, there are some things you should know and they are very important to resales. DVC charges members based on a Calendar year and not the use year. That means that if the seller paid the dues in Jan on this contract, he was paying for 8 months of the 2001 use year points and 4 months of the 2002 points. HE WAS NOT PAYING TO GET THE POINTS IN SEPT!!!! This is a point most resale agents overlook and also most sellers. DVC WILL NOT EXPECT ANY DUES UNTIL NEXT JANUARY AFTER CLOSING. So any dues paid at closing are either a reimbursement back to the seller or a portion of what the seller should have paid in Dec/Jan. When one pays DVC dues by the month, you are essentially borrowing the prorated portion of the money from DVC for the year.

Assuming a Sept use year and NO banked or borrowed points (all of 2002 but no other points), the neutral (break even) portion for the seller would be for you to reimburse for 4/12 of the yearly dues. Obviously one should look at the overall package and decide what is the appropriate price. It is my belief that the dues are the make or break issue (from a value standpoint) of most resales. I also find that many sellers and brokers have no clue on DVC and how it works (Maint. fees) which is definitely different than most timeshares. Unfortunately, this tends to include the ones that specialize in DVC as well.

 

[Wislodgers]

The way it is worded in the contract is: "Buyer shall reimburse seller as a closing statement credit for seller's prior paid maintenance fees on all points available to the buyer, other than banked points"

No dollar amount has been placed on the dues as of yet. If the closing agent wants us to pay full dues, do we have any recourse?

 

[Dean]

Originally posted by Wislodgers
The way it is worded in the contract is: "Buyer shall reimburse seller as a closing statement credit for seller's prior paid maintenance fees on all points available to the buyer, other than banked points"

No dollar amount has been placed on the dues as of yet. If the closing agent wants us to pay full dues, do we have any recourse?

Not if you signed this contract and want to go through with the deal. I'd make the case that you'll be paying twice for the prorated portion of points. Whether it's worth fooling with depends on how many banked points there are and whether you'll be able to use them. Good luck.