Beware DVC Joint Ownership!

[RoseGold]

On the 4/7/21 My DVC Points podcast, 147, Two Decades Later, there is a cautionary tale about joint ownership. The guest told a story about how during her divorce she canceled a reservation from under her ex and his new partner, and he had to book a last minute cash stay. The host said -- and I agree -- that as an owner, she had the right to cancel a reservation. DVC is buying a real estate interest, and this particular one has rules that can be used against you!

And that was with a legal relationship with lawyers and rules to handle disputes and force buy outs: the divorce system. If this is your brother or your buddy or your girlfriend or your daughter, you might have a lot less structure than that.

This is a real estate contract with ongoing commitment of dues that someone has to pay or you are all getting foreclosed. DVC doesn't care whether you are scheduled to use the points this year, or whether your ex made you lose all the points by canceling your stay, or whether your brother uses all the points anyway, they want the dues paid. A DVC foreclosure is a real foreclosure.

Owning real estate with someone is a real legal commitment! It's not just "adding them." You might have to handle buy outs, disputes, and so on. Your real estate could get tangled up in their bankruptcy, lawsuit, DWI, fraud, divorce, and so on. Maybe you need cash and they refuse to sell, maybe they cancel your reservation, maybe they are completely missing, maybe they die and their mistress wants her half of your DVC, maybe their bankruptcy wants to force sale. I'm just an anonymous person on the internet. Talk to a real lawyer if you want to do this!

 

[Spinster Travel]

I totally agree! While somewhat unrelated, my nephew and his then girlfriend (now wife) were entertaining purchasing some investment property together while they were still dating. I had to really work hard to convince him that this was a bad idea. Thankfully he listened. They were both caught up in the fact that the property in question "was such a great deal" and would have been the first step in "building an investment portfolio". I work in finance and while I'm no lawyer, I have seen the impact when relationships go sour. They can be really crummy in the circumstances of divorce, but are SO much worse when its just unmarried people in some sort of partnership.

 

[justadreamaway77]

I totally agree! While somewhat unrelated, my nephew and his then girlfriend (now wife) were entertaining purchasing some investment property together while they were still dating. I had to really work hard to convince him that this was a bad idea. Thankfully he listened. They were both caught up in the fact that the property in question "was such a great deal" and would have been the first step in "building an investment portfolio". I work in finance and while I'm no lawyer, I have seen the impact when relationships go sour. They can be really crummy in the circumstances of divorce, but are SO much worse when its just unmarried people in some sort of partnership.

My husband and I bought a house together before we were even engaged. Figured if we broke up, we would just sell it and split it. Not any different than renting an apartment together.

On a side note, unless that lady's ex-husband made the reservation out of their agreement on point usage, that was a really sleazy thing she did.

 

[EM Lawrence]

I heard the podcast. The husband lied to his wife and tried to make her believe that it was a coworker renting their points. He even went so far as to arrange for a co-worker to talk to her about renting the points. Since they were going through a divorce, they were obviously not going to go to Disney together, so she was initially happy the points were not going to be wasted. Then she got some mail from Disney and it turns out her husband was taking his girlfriend to Disney with their points. The stunt she pulled is way kinder than what I might have pulled in her shoes!

She ended up with all of the points in the divorce.

But yes, point well taken @RoseGold. Joint ownership is NBD until it is. Then it can be a very BD.

 

[justadreamaway77]

I heard the podcast. The husband lied to his wife and tried to make her believe that it was a coworker renting their points. He even went so far as to arrange for a co-worker to talk to her about renting the points. Since they were going through a divorce, they were obviously not going to go to Disney together, so she was initially happy the points were not going to be wasted. Then she got some mail from Disney and it turns out her husband was taking his girlfriend to Disney with their points. The stunt she pulled is way kinder than what I might have pulled in her shoes!

She ended up with all of the points in the divorce.

But yes, point well taken @RoseGold. Joint ownership is NBD until it is. Then it can be a very BD.

Well that's a different scenario than I was originally thinking....glad she got the points! If my husband and I got a divorce I know our DVC contracts would be the biggest fight!

 

[Sandisw]

I definitely agree that one has to know the ins and outs and all it entails.

We made the decision to add our children as joint owners but weighed it all and decided it made sense for our family. We also took steps as well for what ifs in the future.

But, it’s not something to do on a whim and not all situations are the same. I have a relative and if they wanted to do anything with one of their adult children, I’d tell them to run the other way.

 

[Noodlez]

Given that the advice on here is often not to buy jointly unless married (and the couple were), I wouldn't say this is is 'beware of joint ownership', I would say 'beware of cheating on your partner and being caught out!'.

 

[sethschroeder]

Honestly I think its less messy buying with someone who you are NOT married to.

Why do I say that?

Based on what I know in my state everything is 50/50 no matter what if you are married. With my friend though I could simply have them sign something stating they give me the right to remove them at any time or something along those lines.

Flip side good luck if along with the DVC contract you slide over a prenup to your husband/wife.

 

[RoseGold]

With my friend though I could simply have them sign something stating they give me the right to remove them at any time or something along those lines.

Sure, until that friend doesn't pay their share of the dues and isn't returning your calls. You gonna hire a lawyer to do some kind of multi-state enforcement action with your business partner over a 20K timeshare? At least in a divorce there is a system for handling this and it will get resolved.

 

[princesscinderella]

My in laws bought into DVC with friends back when it first started. My mother in law said she quickly realized that it wasn’t going to be an easy and equitable partnership in owning and using the points. They were bought out by the friends who also agreed that it wasn’t working and bought their own contract. Both of them added on down the line too because let’s face it you can’t have enough points

 

[sethschroeder]

Sure, until that friend doesn't pay their share of the dues and isn't returning your calls. You gonna hire a lawyer to do some kind of multi-state enforcement action with your business partner over a 20K timeshare? At least in a divorce there is a system for handling this and it will get resolved.

Nope I would have pre-signed documents in place along with a contract outlining I could remove their access upon non-payment of dues (if they were paying dues) or access to the DVC system or ect.

There is a system for any legal contract it just happens that the one tied to a marriage is messier since (at least hopefully) the DVC contract is small in comparison to the other assets and disputes. Also its likely a marriage separation is going to be more contested than that of a friendship split on DVC.

I wouldn't do it simply because I wouldn't want to have to deal with it but I stand by a friend DVC split being easier to deal with. Do not take this as someone saying they should have a joint ownership of any sorts if they can avoid it.

 

[starry_solo]

Nope I would have pre-signed documents in place along with a contract outlining I could remove their access upon non-payment of dues (if they were paying dues) or access to the DVC system or ect.

There is a system for any legal contract it just happens that the one tied to a marriage is messier since (at least hopefully) the DVC contract is small in comparison to the other assets and disputes. Also its likely a marriage separation is going to be more contested than that of a friendship split on DVC.

I wouldn't do it simply because I wouldn't want to have to deal with it but I stand by a friend DVC split being easier to deal with. Do not take this as someone saying they should have a joint ownership of any sorts if they can avoid it.

Nice, except if both parties are on the deed, Disney isn't going to care what your separate contract says.

 

[sethschroeder]

Nice, except if both parties are on the deed, Disney isn't going to care what your separate contract says.

Nope but a judge will which is the point of this thread.

Just sayings its less messy than a divorce is all.