Buying Resale & Paying Yearly Dues

[tigergrad]

Here's the scenario:

DVC contract use year December. Contract if for 200 points. It says 313 points for 2012 (113 banked from 2011), 200 points for 2013...

I know I would have to pay the 2012 dues for the 200 points when I purchase the contract but what about the 113 banked points from 2011. Wouldn't these dues have already been paid?

Also, I normally travel in June or July, would December be a good UY for me?

 

[WsPrincess]

Yes, you only have to pay the dues on the 200 points for 2012, the banked ones were paid last year in 2011 by the previous owners.

We usually travel in June and we went with an April UY just in case we have to cancel, we can still bank. With December you just have to watch the dates so if you cancel before 31 days you can still bank them if you want to.

 

[Sandisw]

With resale, everything is negotiable including MF's. MF's are based on calendar year and not UY.

Having said that, we bought a Dec UY contract last year at this time and I had the seller cover the MF's for 2011 since we were 2/3's of the way through the year, even though I was getting all of the 2011 UY points.

With June or July travel, Dec UY will work as your banking deadline is July 31st. Travel in the fall would be the trips most at risk.

Traveling at the beginning of the UY gives the most flexibility if you ever have to cancel or change a trip. So, there are UY's out there that are better than Dec, given your current travel patterns. But, it also depends on when else you might travel. If you might also do winter travel, then Dec UY works great for that..

Good luck!

 

[AJA]

As the pp said with resale everything is negotiable. You don't have to pay the current year MF's. When we purchased our resale contract we split the current year MF's with the seller.

A December use year would be "ok" if it's the perfect contract. As long as you don't usually travel from Aug-November. A June UY might be more ideal but I would not pass up a perfect loaded contract because your travel times may change in the future anyway.

Good luck!

 

[tigergrad]

Thanks for the quick replies.

 

[DannysMom]

Since the dues are figured by calendar year not use year and the contract in question has not yet received its 2012 points (Dec 2012) if it were me, I would not be comfortable paying much dues. Perhaps negotiate a split of 2012 dues. If you buy it now you will be responsible for full dues on 200 pts come Jan 2013.

J would lobby for no more than 113/200 (so a little more than half or 55-56%) of the dues that would correspond to the amount of time left in the year. So if you close with 4 months left in the calendar year, you want to pay about 1/2 of 1/3 of the dues that were due in Jan 2012.

 

[Deb & Bill]

Since the dues are figured by calendar year not use year and the contract in question has not yet received its 2012 points (Dec 2012) if it were me, I would not be comfortable paying much dues. Perhaps negotiate a split of 2012 dues. If you buy it now you will be responsible for full dues on 200 pts come Jan 2013.

J would lobby for no more than 113/200 (so a little more than half or 55-56%) of the dues that would correspond to the amount of time left in the year. So if you close with 4 months left in the calendar year, you want to pay about 1/2 of 1/3 of the dues that were due in Jan 2012.

Dues for 2012 were paid in January. Doesn't matter which UY. And, like you just said, dues for 2013 will be due in January again.

 

[LisaS]

Here's the scenario:

DVC contract use year December. Contract if for 200 points. It says 313 points for 2012 (113 banked from 2011), 200 points for 2013...

I know I would have to pay the 2012 dues for the 200 points when I purchase the contract but what about the 113 banked points from 2011. Wouldn't these dues have already been paid?

Also, I normally travel in June or July, would December be a good UY for me?

Everything is negotiable but here is what you actually owe based on Disney's policy for direct buyers. If you bought a contract from Disney and the Dec 2012 points were the first points you received they would charge you one month of dues (for Dec 1, 2012 - Dec 31, 2012). Your 2013 dues will cover the remaining 11 months of your 2012 UY plus the first month of your 2013 UY.

You are also getting 113 banked points which equates to 56.5% of the 2011 allotment. You should pay 56.5% of the 2011 dues for those points. [Correction: 56.5% of the 2012 dues. Since this is a Dec UY, 11/12ths of the dues on the 2011 points are paid in calendar year 2012 at the 2012 rate.]

Again everything is negotiable but if you are going to pay some of the dues then the maximum you owe is 1/12 of the 2012 dues plus 56.5% of the 2011 dues. [Correction: ...plus 56.5% of the 2012 dues.]

ETA: It's best to have a UY that begins just prior to your normal travel dates. If you normally go in June then a June UY would be good. The issue is that if you have to cancel a trip and you are still within your banking window you would have the option to bank any current UY points freed up from that cancelled reservation. If you used banked or borrowed points, they cannot be banked but you would have most of the rest of your UY to use them for another trip.

 

[Sandisw]

Everything is negotiable but here is what you actually owe based on Disney's policy for direct buyers. If you bought a contract from Disney and the Dec 2012 points were the first points you received they would charge you one month of dues (for Dec 1, 2012 - Dec 31, 2012). Your 2013 dues will cover the remaining 11 months of your 2012 UY plus the first month of your 2013 UY.

You are also getting 113 banked points which equates to 56.5% of the 2011 allotment. You should pay 56.5% of the 2011 dues for those points.

Again everything is negotiable but if you are going to pay some of the dues then the maximum you owe is 1/12 of the 2012 dues plus 56.5% of the 2011 dues.

ETA: It's best to have a UY that begins just prior to your normal travel dates. If you normally go in June then a June UY would be good. The issue is that if you have to cancel a trip and you are still within your banking window you would have the option to bank any current UY points freed up from that cancelled reservation. If you used banked or borrowed points, they cannot be banked but you would have most of the rest of your UY to use them for another trip.

Not sure this is entirely correct. If someone bought today from Disney, with a Dec UY, at a resort that is open, they would not pay any 2011 MF's, but only 2012 MF's from today's date until the end of the calendar year, for the number of points in the contract. The would get a full set of 2011 UY points--since that is the UY we are currently in for Dec--and all points going forward.

If someone decides to buy through Disney in October, they would get the same number of points to start as someone buying today, but would owe less in terms of 2012 MF's, because they bought later in the calendar year.

MF's have to due with ownership and really not attached to the points, themselves, per se, so it might be misleading to others new to this to attach them this way.

IMO, if you are buying a resale DVC contract now, at most, I would pay would be 5 months worth of 2012 MF's, even getting all of the points. If I was not all of my current UY points, then I would negotiate paying even less.

 

[cz4ever]

Here's the scenario:

DVC contract use year December. Contract if for 200 points. It says 313 points for 2012 (113 banked from 2011), 200 points for 2013...

I know I would have to pay the 2012 dues for the 200 points when I purchase the contract but what about the 113 banked points from 2011. Wouldn't these dues have already been paid?

Also, I normally travel in June or July, would December be a good UY for me?

The key takeaway in any almost any negotiation is... everything is negotiable. If the listing agent tries to pressure you into paying all or partial maintenance fees for the banked points, you can simply say, "No, my offer is/was made assuming seller receives no reimbursement for maintenance fees." Or you can choose to pay all or part of them, and reduce your original offer to compensate.

All that really (should) matter is the total cost to close the deal. If the seller or selling agent wants to shift how much of that is considered "reimbursed maintenance fees" and how much is considered "payment for points", who cares. But don't increase your total spend just because somebody says something is customary, expected, or typical.

 

[LisaS]

Not sure this is entirely correct. If someone bought today from Disney, with a Dec UY, at a resort that is open, they would not pay any 2011 MF's, but only 2012 MF's from today's date until the end of the calendar year, for the number of points in the contract. The would get a full set of 2011 UY points--since that is the UY we are currently in for Dec--and all points going forward.

If someone decides to buy through Disney in October, they would get the same number of points to start as someone buying today, but would owe less in terms of 2012 MF's, because they bought later in the calendar year.

MF's have to due with ownership and really not attached to the points, themselves, per se, so it might be misleading to others new to this to attach them this way.

IMO, if you are buying a resale DVC contract now, at most, I would pay would be 5 months worth of 2012 MF's, even getting all of the points. If I was not all of my current UY points, then I would negotiate paying even less.

Yes, in my previous post the 56.5% of dues owed on the banked points would be 56.5% of 2012 dues, not 2011 dues. Since this is a December UY most of the dues on the Dec 2011 points are paid in 2012 at the 2012 dues rate. Thanks for catching that.

The maximum dues that the buyer should pay in this situation would be 56.5% of 2012 dues for the banked points plus 1/12th (or 8.33%) for the first month of their 2012 UY for a total of 64.83% of the 2012 dues.

ETA: If you bought a similar contract today (Jul 27) directly from Disney, you would pay 43% of the 2012 dues but receive a full 200 2011 points with the contract, assuming they have them in inventory. As Sandi points out, you can take advantage of the pro-rating rules by purchasing late in your UY, further reducing the amount of first-year dues you will pay but still getting a full set of current UY points (provided you don't wait so long that they have run out.) This is about the only "deal" you get when you purchase directly from Disney. In this case the OP is purchasing from another member who did pay dues on those banked points so it may not be reasonable to expect them to match Disney's pro-rated dues discount for the banked points.

 

[Sandisw]

Yes, in my previous post the 56.5% of dues owed on the banked points would be 56.5% of 2012 dues, not 2011 dues. Since this is a December UY most of the dues on the Dec 2011 points are paid in 2012 at the 2012 dues rate. Thanks for catching that.

The maximum dues that the buyer should pay in this situation would be 56.5% of 2012 dues for the banked points plus 1/12th (or 8.33%) for the first month of their 2012 UY for a total of 64.83% of the 2012 dues.

I do get what you are saying and at the end of the day, it may be a semantics thing, but I just don't agree that 2012 MF's have anything to do with 2011 UY points.

They have to do with expenses associated for running the resort during the 2012 calendar year which we, as owners, are responsible for. Therefore, the owner of the contract is liable for the costs for that year for the time they own the contract.

Now, I understand that a lot of the resale companies don't promote things this way, but sellers/buyers are free to negotiate who covers the fees for the remainder of the year and as I said, when I bought last year in August, I decided to ask the seller to cover all the MF's instead of reimbursing him for the last 4 1/2 months of 2011 when I would be the owner.

 

[LisaS]

I do get what you are saying and at the end of the day, it may be a semantics thing, but I just don't agree that 2012 MF's have anything to do with 2011 UY points.

They have to do with expenses associated for running the resort during the 2012 calendar year which we, as owners, are responsible for. Therefore, the owner of the contract is liable for the costs for that year for the time they own the contract.

Now, I understand that a lot of the resale companies don't promote things this way, but sellers/buyers are free to negotiate who covers the fees for the remainder of the year and as I said, when I bought last year in August, I decided to ask the seller to cover all the MF's instead of reimbursing him for the last 4 1/2 months of 2011 when I would be the owner.

It may be a semantics thing (and we're probably boring most of the people reading this thread!) but I view it as follows: dues are paid on a calendar year basis and each calendar year covers part of two different UYs. For example with a Dec UY, calendar year 2012 covers the last 11 months of the Dec 2011 UY and the first month of the 2012 UY.

To see the correlation between UY and calendar year, look at what Disney does when a contract is sold for the first time (when a new resort is being built). Those who purchased AKV when it first went on sale in Feb 2007 bought Units with Sep 1, 2007 occupancy dates and our initial UYs were 2007.

I have an Oct UY and paid 2007 dues from Oct 1st (3 months worth). Those with Dec UYs paid 2007 dues from Dec 1, 2007 (one month worth). Those with Sep UYs paid 2007 dues from Sep 1, 2007 (4 months worth). Why did we all pay different amounts of 2007 dues when we all purchased on the same day in Feb 2007? And we got a full set of 2007 points so why didn't we have to pay the full 2007 dues?

It's because the 2007 dues we each paid were based on the overlap of our initial UY and the calendar year. With an Oct UY, only 3 months of my Oct 2007 UY fell within the 2007 calendar year so I owed only 3 months worth of dues that year. Did I really get a full set of 2007 points for only 3 months worth of dues? No, I paid for the remaining 9 months of my 2007 points in my 2008 dues because the last 9 months of my UY fell within 2008.

Those with Dec UYs paid 1/12th of the cost of those points in 2007 and paid the remaining 11/12ths of the cost in 2008. Sep UY members paid 4/12ths of the cost in 2007 and 8/12ths in 2008. So in the end, we all paid the full cost of that first set of points but it was split across two calendar years.

 

[DougEMG]

Here's the scenario:

DVC contract use year December. Contract if for 200 points. It says 313 points for 2012 (113 banked from 2011), 200 points for 2013...

I know I would have to pay the 2012 dues for the 200 points when I purchase the contract but what about the 113 banked points from 2011. Wouldn't these dues have already been paid?

Also, I normally travel in June or July, would December be a good UY for me?

You don't have to pay MF. It all depends on the deal you negotiate. I've got a couple of contracts were I never paid any MF.

When I do make an offer that includes MR I will decrease the price/point I offer.