Are Annual Dues separate from tax assessment amount due?

[JenniferParker]

I am confused and don't see my question answered in other threads (though I may have missed it). I'm trying to understand if the annual dues actually include the tax assessment or if the amount due for taxes is billed in addition to the stated annual dues. I am looking at buying 50 pts at the Boardwalk, so do the annual dues (2023 dues per point $8.53 x 50) of $426.55 include the tax assessment or do I pay tax assessment separately?

Also, if 2042 is the end year, and annual dues and tax assessments are billed Jan 1st but the contract ends Jan 31st, am I still expected to pay the 2042 annual dues and/or tax assessment? None of that is spelled out clearly in the closing contract that I'm reading.

 

[erionm]

Annual dues consist of property taxes, operating expenses and capital reserves. All three are separate line items on one statement.

 

[RoseGold]

It is possible for DVC to do an assessment, like for hurricane damage or something, but it has never done this. Taxes are always included in dues. I guess if there were some special tax issue, it could become an assessment, but that has never happened.

In Jan, you pay the dues for that year of points. No one at BW has 2043 points, so no one pays 2043 dues, even though your 2042 points haven't expired yet.

As the contracts end, It possible they could make dues have to be paid upfront to borrow points or do special assessments or all kinds of things that are in the paperwork.

 

[JenniferParker]

I wouldn't get 2042 points (because the contract is late in the year). Does that mean I wouldn't pay any 2042 dues? It seems like I'd still have to pay 2042 based on the dues being charged Jan. 1st and the contract not ending until Jan. 31st.

 

[RoseGold]

I wouldn't get 2042 points (because the contract is late in the year). Does that mean I wouldn't pay any 2042 dues? It seems like I'd still have to pay 2042 based on the dues being charged Jan. 1st and the contract not ending until Jan. 31st.

No one really knows how this will go, but here's the overall issue.

You would pay dues in Jan 2042 and get your 2042 points a couple months before they expire.

Obviously, this isn't a great situation and everyone is going to be borrowing. And if you already used the Dec 2042 points in Dec 2041, then you might not pay at all. What are they going to do, foreclose your zero points? I expect to see major changes in the last few years of these contracts to prevent that kind of scenario. They could also limit bookings at these resorts to home points, which I wouldn't be surprised to see.

 

[erionm]

It is possible for DVC to do an assessment, like for hurricane damage or something, but it has never done this.

They have done special assessments at HHI, VB and SSR due to hurricane damage.

 

[RoseGold]

They have done special assessments at HHI, VB and SSR due to hurricane damage.

I thought these were all capital and then used dues to replenish capital? Not a special assessment outside dues?

OKW extension was technically an assessment, but that's its own barrel of fun.

 

[erionm]

I thought these were all capital and then used dues to replenish capital? Not a special assessment outside dues?

They were special assessments to repay loans from DVD that were used to cover the insurance deductibles.

 

[RoseGold]

They were special assessments to repay loans from DVD that were used to cover the insurance deductibles.

HH at least was done with dues increase, not special assessment. So, same concept, but different words.

 

[JenniferParker]

No one really knows how this will go, but here's the overall issue.

You would pay dues in Jan 2042 and get your 2042 points a couple months before they expire.

Obviously, this isn't a great situation and everyone is going to be borrowing. And if you already used the Dec 2042 points in June 2041, then you might not pay at all. What are they going to do, foreclose your zero points? I expect to see major changes in the last few years of these contracts to prevent that kind of scenario. They could also limit bookings at these resorts to home points, which I wouldn't be surprised to see.

Thanks for explaining. Guess we'll all be talking about this again in about 18 years.

 

[CarolynFH]

HH at least was done with dues increase, not special assessment. So, same concept, but different words.

It was a temporary dues increase to spread the special assessment over several years instead of making it payable all at once like most timeshares do. Details here: https://dvcnews.com/other-resorts/h...ead-owners-hit-with-bill-for-hurricane-damage.

 

[CarolynFH]

Thanks for explaining. Guess we'll all be talking about this again in about 18 years.

Well, maybe in 15 years DVC will be ready to establish what the process will be for winding down the 2042 resorts and will tell us what it is. It’s been said here more than once that the executives who will make those decisions are just now completing their educations — a few years ago it was said they were in college, now they’re probably getting their MBAs. (What was Bill Diercksen doing 15 years ago?)

Keep in mind that all those Condominium Associations terminate on January 31, so no one will get 2043 points. Also, member fees are calculated based on estimated operating expenses for the calendar year, not use year, so if the resorts will operate as DVC resorts for only one month in the year 2042, dues should only be 1/12 of what they’d be for an entire calendar year.

I expect there could be limitations on banking and borrowing as well as on 7-month bookings into and out of the 2042 resorts imposed a year or two or three before they end, but truth is we don’t know. And some interesting ideas have been brought up here recently, such as DVD letting 2042 owners use some of DVD‘s points after 1/31/2042, like they let us use One Time Use points, to “finish” our 2041 UY. As a September UY owner, I’m very interested to know whether I’ll have 5 months or 12 to use our 2041 points!

 

[Sandisw]

I wouldn't get 2042 points (because the contract is late in the year). Does that mean I wouldn't pay any 2042 dues? It seems like I'd still have to pay 2042 based on the dues being charged Jan. 1st and the contract not ending until Jan. 31st.

The 2042 resorts end January 31st, 2042. The last set of points for any owner will be their 2041 UY points...it doesn't matter which UY you own.

Since no DVC resort has expired, we do not know how they will bill owners for the operation of the resort in January 2042...but, no matter what they do, you will be responsible for only one month of 2042 dues.

 

[RoseGold]

The 2042 resorts end January 31st, 2042. The last set of points for any owner will be their 2041 UY points...it doesn't matter which UY you own.

Since no DVC resort has expired, we do not know how they will bill owners for the operation of the resort in January 2042...but, no matter what they do, you will be responsible for only one month of 2042 dues.

LOL, I'm completely off by a year. And I almost made a BW offer too!

 

[zavandor]

I think Disney will need to avoid people defaulting on their dues on the last year or two. So they might:

• Ask to pay (estimated) dues in advance if you want to borrow points
• And/or keep a large capital reserve that is the repaid back to members at the end of the contract (if you default on dues, you don't share the pot)
• And/or wind down the capital reserve repaying back members in the last 1 or 2 years effectively compensating dues, so there is nothing to pay
• And/or who knows what

 

[CarolMN]

I think Disney will need to avoid people defaulting on their dues on the last year or two. So they might:

• Ask to pay (estimated) dues in advance if you want to borrow points
• And/or keep a large capital reserve that is the repaid back to members at the end of the contract (if you default on dues, you don't share the pot)
• And/or wind down the capital reserve repaying back members in the last 1 or 2 years effectively compensating dues, so there is nothing to pay
• And/or who knows what

If it were my decision, I'd just bill January 2042 dues at the same rate as 2041 and collect 13 months in 2041.

 

[Sandisw]

If it were my decision, I'd just bill January 2042 dues at the same rate as 2041 and collect 13 months in 2041.

That is what make a lot of sense!

 

[zavandor]

If it were my decision, I'd just bill January 2042 dues at the same rate as 2041 and collect 13 months in 2041.

There is a lot of uncertainty, but it's not just the one month in 2042. The problem is linked with how points are managed.
I have a December UY, if DVC will stop borrowing, I will have only 2 months to use the last set of points. And that is during a high demand time and with other people able to walk the reservation while I cannot (because you cannot book across the start of your UY).
So I might decide I will probably not be able to use the points and default MF in the last year.

Or if they allow borrowing, I can borrow my last set of points one year in advance and then default the MF for the final year (or final 13 months).

If they allow to use points after the resort expires, then it's less of a problem, but can they really? They'd have to give owners their own points (because the resort legally doesn't exist anymore and BVTC cannot just allow people to book with expired points) and there might be a lot of owners, it might not be feasible with so many 2042 resorts. And book what, other not expired resorts? Owners at those resorts might not be happy. Keep the resort open and bookable even if the lease has expired?

 

[RoseGold]

There is a lot of uncertainty, but it's not just the one month in 2042. The problem is linked with how points are managed.
I have a December UY, if DVC will stop borrowing, I will have only 2 months to use the last set of points. And that is during a high demand time and with other people able to walk the reservation while I cannot (because you cannot book across the start of your UY).
So I might decide I will probably not be able to use the points and default MF in the last year.

I don't see how you fix the default problem without either blocking borrowing or requiring prepayment of dues to borrow.

This is why I can see the 2042s only allowing home points in the last few months/years, to make sure those points have somewhere to go.

With current math, paying the dues for the points is a steal, so you wouldn't want to forfeit points. But, you can imagine a scenario where the dues are crazy high and no one wants to keep them at all, and then this whole situation would flip. That's really a nightmare scenario for Disney. They forfeit on worthless contracts and the dues make the points more expensive than SAPs. Who knows where dues will be in 20 years?

 

[Sandisw]

There is a lot of uncertainty, but it's not just the one month in 2042. The problem is linked with how points are managed.
I have a December UY, if DVC will stop borrowing, I will have only 2 months to use the last set of points. And that is during a high demand time and with other people able to walk the reservation while I cannot (because you cannot book across the start of your UY).
So I might decide I will probably not be able to use the points and default MF in the last year.

Or if they allow borrowing, I can borrow my last set of points one year in advance and then default the MF for the final year (or final 13 months).

If they allow to use points after the resort expires, then it's less of a problem, but can they really? They'd have to give owners their own points (because the resort legally doesn't exist anymore and BVTC cannot just allow people to book with expired points) and there might be a lot of owners, it might not be feasible with so many 2042 resorts. And book what, other not expired resorts? Owners at those resorts might not be happy. Keep the resort open and bookable even if the lease has expired?

I think if they were to allow owners access to their own points, it would not apply to everyone equally…maybe just Fall UYs…and would only be good for bookings 7 months or less, to give those with later UYs time…but, it also doesn’t have to be given to owners free. They could give owners the right to buy those points for the price of OTUs, just up to the number they own.

Now, there is technically a clause in the POS about them allowing owners of a resort that is unavailable to use points elsewhere which creates more than 1:1 use…that is what happened during shutdown when VGC didn’t open for an additional time…but, I don’t think that would apply when a resort ends…

I suspect we are going to see changes with to booking…reduce time when non owners can trade in…during the last few years. Ending banking and borrowing as well. As mentioned, I get DVD doesn’t know exactly the best way to handle it.