Annual Dues When Selling DVC Points

[jimsanfilippo]

The wife and I are probably going to be selling points (privately without a broker) after our February trip and I was wondering who would be responsible for the annual dues at the time of the purchase.

I will be paying monthly again this year so if I get into the middle of the year do we prorate the cost or am I totally responsible for the dues? Or is this negotiated?

 

[jcf]

If you used all the points for the 2012 allocation generally the fair thing would be for you to pay the dues...if the buyer has access to 2012 points then buyer should pay dues...pro-rate if partial points available

 

[chalee94]

Or is this negotiated?

everything is negotiable.

but as a buyer, i would pass on a contract where i was expected to pay dues for pts i didn't get. you would have to discount the contract further than normal since it is "stripped" of available pts yet dues are still owed...

 

[JimMIA]

In a resale, everything is negotiable.

Technically, dues have nothing to do with points but in resales they are often linked. Dues cover the operating expenses of your home resort for the calendar year, and have nothing to do with whether you used points, banked points, borrowed points, or whatever. For that reason, if a buyer purchases direct from Disney, DVC will apportion the dues from the closing date until the end of the year. That is the technically-correct, CPA method of dividing the dues.

All that accounting silliness aside, I'm with Charles -- I ain't paying for points I won't be getting. So in resales, the most common practice is to apportion the dues according to how many points the buyer is getting.

But there are all sorts of possible variations.

For example, what if a contract has current year points and you're closing three months before the end of the UY? You can't bank those points, and it's unlikely you'll be able to use them. Yes, you could deposit them into RCI, but they're really essentially useless. Gonne pay dues on those points? Me neither.

Which brings us back to "In a resale, everything is negotiable."

 

[DebbieB]

I think the 2012 dues would have to be paid in full before the sale closes. The question is who pays them. The new owner can't just take over your monthly payments.

 

[jimsanfilippo]

If you used all the points for the 2012 allocation generally the fair thing would be for you to pay the dues...if the buyer has access to 2012 points then buyer should pay dues...pro-rate if partial points available

That makes perfect sense. Thanks for the info!

 

[LisaS]

For that reason, if a buyer purchases direct from Disney, DVC will apportion the dues from the closing date until the end of the year.

When purchasing directly from Disney, dues begin on the later of the purchase date (not closing date), the start of the initial UY and the occupancy date of the unit purchased. The occupancy date applies only to resorts not yet fully open at the time of purchase. Since most buyers get current UY points when they purchase directly from Disney, it's usually the purchase date that determines when dues begin. The buyer is not billed until about a month after closing, meaning they will pay higher monthly payments in the first year since they will be paying N months worth of dues in N-2 payments

 

[luckyman_apd]

Well, I am in the process of buying and I am paying for the 2012 dues as a buyer. If the seller has paid them already to Disney, they will get that money back from me at closing. The sale has points banked from 2011. Those dues are paid and over, and as a result fo the seller not using them I see it as their issue not mine. It's a bonus to get them in the sale, and part of my offering price, but I am not paying past dues. If the contract is stripped of points, I would expect the seller to pay the dues for the points used. I won't pay dues for points I don't get. Again, it is all negiotiable. So depending on the sale price, the dues and closing costs are all negotiable in the process.

 

[Sandisw]

As mentioned, it is really something that you and the buyer will negotiate.

I bought a BWV contract in June and it came with all 2011 points (Dec UY). However, the seller paid the 2011 MF'S.

The most I would have been willing to pay, however, would have been 5 months because the target closing date was to be August 1st. Since dues are based on calendar year, I felt that I should only pay for the months I would own the contract.

As part of the deal, and counter offer, the seller paid them all.