Buying a contract from a friend

[nifferearly]

I am planning to buy an AKL contract from a close friend. Does anyone know how this process works? Can he just call DVC and we pay the fee to transfer it to my name, similar to if I were transferring my ownership to a child? Or does it still need to go through the ROFR process and would we need to use a closing company? I don't need a title search due to my relationship with this person. Thanks for the help!

 

[CMOORE185]

Needs to go through ROFR and a closing company.

What I don't know if is you could just add this persons name as an owner then remove your name later.

 

[Dean]

I am planning to buy an AKL contract from a close friend. Does anyone know how this process works? Can he just call DVC and we pay the fee to transfer it to my name, similar to if I were transferring my ownership to a child? Or does it still need to go through the ROFR process and would we need to use a closing company? I don't need a title search due to my relationship with this person. Thanks for the help!

It needs to go through the same process as any other sale including ROFR. However, you can reduce some of the costs if you want to do the transfer yourselves and use a quit claim deed. Have him contact DVC admin for the transfer info, submit a contract laying out the price, who pays what and who gets what. After you have ROFR, you'll need a deed recorded along with the ROFR and the tax form for the county. Then just submit the deed to DVC along with the applicable transfer form. Realize that if it's a great deal, DVC will likely take it under ROFR. Also be aware that it's illegal in FL to put a different price on the contract than is accurate just to pass ROFR or to agree to kickbacks or the like.

 

[kenspidey]

It needs to go through the same process as any other sale including ROFR. However, you can reduce some of the costs if you want to do the transfer yourselves and use a quit claim deed. Have him contact DVC admin for the transfer info, submit a contract laying out the price, who pays what and who gets what. After you have ROFR, you'll need a deed recorded along with the ROFR and the tax form for the county. Then just submit the deed to DVC along with the applicable transfer form. Realize that if it's a great deal, DVC will likely take it under ROFR. Also be aware that it's illegal in FL to put a different price on the contract than is accurate just to pass ROFR or to agree to kickbacks or the like.

Just a related question... Can you gift it?

 

[RobDoc]

Just a related question... Can you gift it?

Yes, DVC contracts may be gifted to someone else. This is commonly done when transferring ownership to family members or into a Trust and it still needs to go through ROFR before the deed can be recorded with the new ownership.

 

[Dean]

Just a related question... Can you gift it?

As noted, you can gift it but it'd be subject to gift tax laws which could cause a significant tax liability in the wrong situation. However you couldn't say it was a gift when it was actually a sale no matter how much you wanted to help the person out by giving them a deal.

 

[nifferearly]

Thanks for the advice! I'm paying market price for the contract (or pretty close to it - we'll probably split savings from not paying commission). We just wanted to avoid closing costs on the deal. We'll do ROFR and the quit claim deed that was suggested. Appreciate the help.

 

[Msmithmd]

Just make sure you're paying enough to pass ROFR, and all will be well. Check that thread for up-to-date resort specific details.

Pick a price that's at least a couple bucks more than the last one you see for that resort that got bought back by DVC.

Even then, it isn't an absolute guarantee- but you will know you have a good shot, and are being fair to your friend. Remember that if you do set the price too low, DVC itself gets the contract for that low price. Then you get nothing, and your friend still receives that low price for his contract.

Good luck!