Anyone extending their OKW contract?

[BobH]

I am no good at linking posts on this site but her is the text o Webmaster John's Post that appears on the DVC Operations page. I have bolded the part about a "lien".

I went to the DVC Special Meeting

--------------------------------------------------------------------------------

Hey Gang

Just wanted to give you an update on the meeting held at the Contemporary today about the extenstion of contracts for Old Key West DVC members to end in 2057 versus 2042. I will be talking more about this on next weeks pod cast (not tomorrow's show as that has already been recorded).

It was a well run meeting and they did allow the attendees (of which I would guess there were between 30 & 40 people) to ask questions. They explained what the extension of the contract meant, how it would be presented and then they voted to pass all resolutions pertaining to the meeting.

Here are the highlights:

- All Old Key West DVC owners will receive a letter of offer to extend the ground lease of their vacation ownership from ending 1/31/2042 to ending 1/31/2057. Meaning that the property OKW sits on will be leased from the Walt Disney World Company for an additional 15 years.

- The price will be $25 per point to extend current contracts for 15 years. However if you accept the extension before 2/29/2008 Disney Vacation Developement will pay $10 of that $25. Making the final cost to the owner $15 per point of you act before 2/29/2008. If you act after that the price will be $25 per point.

- There is no cost to the owner at all if they choose not to do this. All that happens is they will assign their vacation ownership back to DVC for the period of 2042 - 2057.

- This can be done per contract with DVC - so if you are like me and own multiple contracts you can choose to do one or both of your contracts. But each contract must be done for the full value of the points.

- This only being offered at OKW for now.

- No effect on current annual dues.

- If you choose to take the offer you will receive a special "Lighthouse Memory Capsule" (don't ask me what that is) as well as a special lithograph.

- If you choose not to take the offer you will get the lithograph but not the lighthouse thingy.

- There will be no closing costs associated with the extension.

- Since DVC recognizes that there will be cost and time involved (paperwork will have to be notarized) even if you don't accept the offer they are going to credit every owner $30 on their December 2007 dues to cover the costs.

- It can be financed with DVC - current terms = 10.75% for 10 years. It can also be financed on your own, or paid in full or charged to a major credit card.

- Price of OKW points purchased through DVC prior to the resolutions being passed was $92 per point and ending in 2042. After the resolution passed OKW points are now $96 each and will end in 2057.

- I specifically asked about a 'lien' being placed on our contracts and was told no (and looked at like I was crazy). However later on they read the resolutions and number 2 said that a lien would be placed on all current contracts in the form of special assessment for the extension of the ground
lease. My understanding is the lein is satisfied by either accepting or rejecting the extension.

- One person asked what if you do not fill out the paperwork due to illness or death or just forgetting and was basically told that DVC will do everything in their power to contact every owner to get the paperwork done, whether you accept or reject the extension.

- One person asked what if they reject the extension offer now will they be able to accept later on and was told no - this was a one time offer. Another person asked what if they rejected the current extension and in 20 years they make another offer for a further extension could they take advantage of that. While they would not commit to specifics they seemed to indicate that would be allowed.

After the special meeting a general meeting was held. No big news there but here are some highlights:

- They confirmed the new Vacation Club property in CA (although that press release is out already).

- They would not confirm or deny that a Vacation Club property was in the works at the Contemporary resort.

They answered some other general questions and the meeting was adjourned.

 

[DVC92]

I thought there was NOT going to be a lien???

They maintain the right but don't need to place a lien upon your ownership interest if you don't return the deed or pay for the extension. If you owe them for the "special" assessment, they can immediately stop your banking and borrowing privileges, and thereafter preclude you from making any new reservations and cancel existing reservations. Late payment and interest charges may also accrue until you pay. Registering a lien isn't necessary to force you to comply. Further, if you don't return the deed on time, you will have purchased the 15 years whether you wanted to or not.

 

[dianeschlicht]

They maintain the right but don't need to place a lien upon your ownership interest if you don't return the deed or pay for the extension. If you owe them for the "special" assessment, they can immediately stop your banking and borrowing privileges, and thereafter preclude you from making any new reservations and cancel existing reservations. Late payment and interest charges may also accrue until you pay. Registering a lien isn't necessary to force you to comply. Further, if you don't return the deed on time, you will have purchased the 15 years whether you wanted to or not.

Well, I wont have to worry about that, because we are NOT going to purchase the 15 years.

 

[simzac]

Received my paper work today, checked the no box, and will mail it back tomorrow.

 

[rsinj]

.

 

[rsinj]

.

 

[sigillaria]

I bought OKW in 1991 but plan to extend as my grandson will be 48 in 2042 and may have a family interested in WDW.
In any case it makes the resale possibilities better.

 

[salmoneous]

When folks bought into DVC, buying a resale, doesn't your "problem" also apply to the seller of the contract? Have they not been paying into reserves for years they will not own? For anyone who lives in a planned development community (e.g. condominium) where you pay monthly dues, when you sell, do you ask questions regarding the funding of reserves with your past/current dues payments.

In both of your examples the seller knew what the rules were when the bought in and is selling so they can receive compensation for the reserve fund in their sales price.

OKW bought in thinking they would be responsible for maintenance of the resort until 2042. Now they are being told they are also responsible for building a reserve fund to pay for maintenance from 2042-2057, even though they won't get any benefit from those years.

Either pay up, or sign the deed over. Those are the options you have. .

Sounds like Darth Vader is in charge of DVC. He's altered the deal. We shouldn't complain, just pray he doesn't alter it further.

 

[Shadeaux]

Either pay up, or sign the deed over. Those are the options you have. All of the questions and scenarios are really irrelevant and not worth getting worked up over...unless you have nothing better to do.

I don't think the fact that Disney is changing the contract we signed as being irrelevant. I don't understand how this can be legal. We signed a contract with a set ending date, not one that stated it might be extended sometime in the future.

 

[rsinj]

.

 

[rsinj]

.

 

[DVC92]

There isn't any problem, unless you are out looking for one - which you clearly are and many people have been for the past month.

When folks bought into DVC, buying a resale, doesn't your "problem" also apply to the seller of the contract? Have they not been paying into reserves for years they will not own? For anyone who lives in a planned development community (e.g. condominium) where you pay monthly dues, when you sell, do you ask questions regarding the funding of reserves with your past/current dues payments?

There aren't any problems here.

Either pay up, or sign the deed over. Those are the options you have. All of the questions and scenarios are really irrelevant and not worth getting worked up over...unless you have nothing better to do.

First, I am not looking for a problem, but one does exist. When every member purchased an OKW contract, there was a termination date. On my specific contract in 1992, there was no extension option for Disney to exercise. It was a voluntary act on my part to purchase under these provisions. Upon termination of the condominium in 2042, excess reserves would be distributed to all current owners. If I voluntarilysold prior to 2042, there would be no recouping of unspent contributions to the reserve funds. None of the above should even be debatable, just a statement of fact.

Now, by Disney's unilateral action to extend the Ground Lease, the termination date is reset to 2057. If I decide not to extend, it appears that I will be forced to fully contribute to the reserves fund through January 31, 2042 for expenditures to be made in years (2042-2057) beyond my ownership interest. This is a big problem to any member not extending. To my knowledge, Disney has not addressed this issue. I've been involuntarily sucked into the terms of a new contract even if I opt out.

 

[rsinj]

.

 

[salmoneous]

salmoneous - what exactly was your expectation of what would happen as/when 2042 approached?

I didn't know. None of us knew. We all went in with a bit of trust. We let one branch of Disney manage the resorts, set budgets and spend our money. All we could do is hope they live up to their promise of managing them in our interests.

Are many people up in arms about the reserves? It really doesn't appear to be the case.

My guess is the vast majority of owners aren't aware of the reserve issue. Disney certainly isn't telling anyone. I wonder if people would be upset if Disney mentioned in their mailings that "even if you turn down the offer, your future maintenance dues will go up as a result of this vote."

 

[rsinj]

.

 

[LIFERBABE]

First, I am not looking for a problem, but one does exist. When every member purchased an OKW contract, there was a termination date. On my specific contract in 1992, there was no extension option for Disney to exercise. It was a voluntary act on my part to purchase under these provisions. Upon termination of the condominium in 2042, excess reserves would be distributed to all current owners. If I voluntarilysold prior to 2042, there would be no recouping of unspent contributions to the reserve funds. None of the above should even be debatable, just a statement of fact.

Now, by Disney's unilateral action to extend the Ground Lease, the termination date is reset to 2057. If I decide not to extend, it appears that I will be forced to fully contribute to the reserves fund through January 31, 2042 for expenditures to be made in years (2042-2057) beyond my ownership interest. This is a big problem to any member not extending. To my knowledge, Disney has not addressed this issue. I've been involuntarily sucked into the terms of a new contract even if I opt out.

I agree and those that don't have a problem with it, good for you. I do have a problem with it and have the right to express that opinion without being condescended to. My faith in what others do or think is severely lacking. I dont drink kool-aid and I dont follow others off cliffs.
Please dont beat us over the head because you dont take issue with what is being done.
The word LIEN is clearly used several times in the mailing and the Q&A is a joke.
I wrote NO!!! in red sharpie.

 

[La2kw]

salmoneous - what exactly was your expectation of what would happen as/when 2042 approached? Your dues would go down because you would no longer be paying into reserves? Did you think OKW would just end/close down? If these issues are such a big deal, I'm wondering why anyone would have signed to purchase the contract in the first place? Why someone who is so concerned wouldn't have asked those questions when they bought?

The deal has not been altered. The owner (which you knew when you bought that ownership would revert to in 2042) is offering you an additional option. Nothing says you have to take that option. The reserve issue is the same as before. It is not an issue unless you are looking for it to be. For the overwhelming number of people, it isn't - just a couple making a stink about reserves. Am I wrong about that? Are many people up in arms about the reserves? It really doesn't appear to be the case.

I did ask my guide before I bought. I was told the contract would end in 2042 and the resort would probably be torn down.

 

[Paul in CT]

The poll done on this board indicated that most of us will NOT take the offer. We will be mid 90's in '42, so we will not. I figure I'll be lucky if I make it to '42, so why do I want to go another 15 years? I am also reasonably sure our adult kids (who will be in their 60's then) wont care either.

I'm with you. 2042 will be good enough for us. I do not see an advantage to extending except for improving resale value, but I don't plan to sell.

 

[salmoneous]

Honestly, would you not have bought if you were told?

Huh? I don't get your reasoning here. Are you saying that unless Disney's behavior is so egregious it would have changed my purchase decision, I shouldn't complain?

Personally, that's not my standard. If a company that has an obligation to work in my best interests makes a decision that is going to cost me money while enriching a corporate sibling - even if that cost is only $500 or so - I'm going to complain to the extent possible.

At the moment, Disney's decision doesn't affect me, as I'm not an OKW owner. Right now, it's just a matter for discussion on a DVC discussion board. I feel it worth pointing out that this decision is going to cost owners money, even if they don't accept the extension. It up to OKW owners to care or not care.

But should Disney structure a similar deal at one of my resorts, I will at a minimum expect them to fully disclose the consequences to the owners.

 

[Debbie H]

As I wrote on the DVC mousecellaneous board:

Well, we received our membership extension packet today. It is amazing that they voted for this on 9/24 and got these printed and mailed by the 28th! Yeah, right.

DVD will pay $10 per point IF PAID IN FULL by February 29, 2008. If not paid by then, you will pay the full assesment of $25 per point.

So, for us, if we pay in full by 2/29, we owe them $30,000, March 1 it would be $50,000 oh, and don't forget the 10% down if you finance.

I am not feeling warm and fuzzy with this....