Can an LLC purchase DVC points?

[BluesBro]

I am a member of an LLC under which a few of my friends and I do certain types of business. We talked recently about the potential of sharing a DVC membership by purchasing through the LLC.

Is this allowed?

Thanks!

 

[CarolMN]

AFAIK, it is. You can't run your business out of a DVC resort, though, LOL! That is forbidden.

Are you really sure you want to share a DVC membership? You're going to need a solid understanding of who gets to use it when!

Best wishes -

P.S. For those who may not already know, LLC stands for Limited Liability Company

 

[BluesBro]

My friends and I don't think we would individually use the DVC every year. There are 3 of us and we thought that going to Disney with our families every 3 years would work out nice for everyone. It would also spread out the cost.

Thanks for the information

 

[CarolMN]

Just FYI - Unless each family goes at the same time of the year and stays in the same size accomodations, each family will use a different number of points. Not all the resorts "cost" the same for the same size room at the same time, either. You may end up with not enough or too many points each year.

Of course, you can find a way to work it all out, but it is not as simple as just taking turns / going every third year.

Best wishes -

 

[cseca]

just an FYI:
I talked to CM at MK just a couple weeks ago, he said that they have companies who bought points and use reservations as incentives for their employees.
I thought that was a neat idea. And I wanna know which companies they are cuz I wanna apply...

 

[TammyAlphabet]

I would be quite leary of this arrangement. If the deal was to purchase 300 points for each family to use a year. Why not just purchase 3 100 point contracts and each member just transfers their points to the appropriate account each year. Then, if, the worst happens, and there is a falling out, each family has a 100 point contract. 37 or 49 years is a loooooooong tiiiiiiimmmmmeeeee!!!!!

 

[abw]

Thought I'd dig up this thread to see if anyone has additional experience buying points inside an LLC.

Let's say you might (only occasionally) rent your points. In that case, are there benefits from buying the points inside an (already existing) LLC?

One extra question: at what point does Disney get "upset" with someone for renting their points? When it's all the points, all the time?

 

[Figment1983]

You could each buy a 100 point contract individually, and each person could bank 100 and borrrow 100, would give you 300 points every 3 years.

 

[Lynne M]

You could each buy a 100 point contract individually, and each person could bank 100 and borrrow 100, would give you 300 points every 3 years.

This.

This is very commonly done, and accomplishes the same goals (going every 3 years, spreading out the cost) without the risks of what you're proposing.

If you're determined to purchase together, you should make sure you have an agreement amongst you that would handle the following situations:

1. Unless you're all planning to book the same size unit at the same resort at the same time of year, each of you will be using different amounts of points for your vacations. How will you split up the maintenance fees fairly?

2. What if one family decides they want to start using DVC more frequently?

3. What happens to the DVC contract if you decide to dissolve the LLC?

4. What happens in case of divorce, bankruptcy, one party leaving the LLC, one party deciding they no longer want to use the DVC contract, etc?

 

[vicki_c]

T
One extra question: at what point does Disney get "upset" with someone for renting their points? When it's all the points, all the time?

I've seen it posted here before that 20 rentals seems to be Disney's definition of a commercial renter, which is not permitted by DVC.

 

[Rob S.]

My friends and I don't think we would individually use the DVC every year. There are 3 of us and we thought that going to Disney with our families every 3 years would work out nice for everyone. It would also spread out the cost.

Thanks for the information

That won't last.
We purchased DVC in 2007 with the intention of going once per year. .
We went 4 times this year and have 4 trips planned for 2011.

 

[com_op_2000]

This.

This is very commonly done, and accomplishes the same goals (going every 3 years, spreading out the cost) without the risks of what you're proposing.

If you're determined to purchase together, you should make sure you have an agreement amongst you that would handle the following situations:

1. Unless you're all planning to book the same size unit at the same resort at the same time of year, each of you will be using different amounts of points for your vacations. How will you split up the maintenance fees fairly?

2. What if one family decides they want to start using DVC more frequently?

3. What happens to the DVC contract if you decide to dissolve the LLC?

4. What happens in case of divorce, bankruptcy, one party leaving the LLC, one party deciding they no longer want to use the DVC contract, etc?

Another item to consider, the point charts change; so one year someone has enough points to go and then the next year the new person would need to rent additional points or go at a lower points day of the week or time of year.

 

[JimMIA]

Can you do it? Sure. Our DVC is held in a family trust, with three families sharing the membership -- and there are LOTS of corporate memberships, as other posters have noted.

My concern would be mixing a vacation benefit for the owners of the LLC with the business uses of the LLC. I'm not an attorney, but if I was contemplating something like that, I'd sure be talking to an attorney to be sure I wasn't exposing either the DVC or other LLC assets unnecessarily.

 

[Rocket]

A couple of points not mentioned above:

1. You could bypass ROFR by selling the LLC instead of the points

2. You could walk away from the contract by declaring the LLC bankrupt, or just stop paying due and give the deed back. There's no personal guarantee.

3. All that assumes you set up a separate LLC just for the purpose of owning the points. A very easy thing to do.

4. Possible tax benefits, contact your accountant.

 

[WilsonFlyer]

Interesting bunch of points when the only question on the table was could an LLC buy a DVC contract.

 

[Melani]

My friends and I don't think we would individually use the DVC every year. There are 3 of us and we thought that going to Disney with our families every 3 years would work out nice for everyone. It would also spread out the cost.

Thanks for the information

I met a couple on a cruise last year who did the same thing w/ some friends from High School and a condo at the Gulf.

She acted amazed when I asked her how'd they
divy it up w/o getting into big fights. She said they drew lots every year to who got it when.

 

[abw]

My concern would be mixing a vacation benefit for the owners of the LLC with the business uses of the LLC. I'm not an attorney, but if I was contemplating something like that, I'd sure be talking to an attorney to be sure I wasn't exposing either the DVC or other LLC assets unnecessarily.

This is an interesting issue. One possibility is to rent points from your own LLC's contract. I have heard that the LLC owner of such an asset would have a reason to use some of those points on an annual basis to insure that the investment is secure (that the management company is carrying through with regular maintenance, etc.).

Many thanks for any and all thoughts about the general question of holding a DVC contract inside an LLC.

 

[XGrumpy1]

First, yes an LLC can own DVC points. I have points in an LLC.

Can your LLC own points? Maybe. I am not a lawyer, but when I bought the points, the Disney lawyers needed to see the articles of organization, a certificate of good standing from the state and an opinion letter from a lawyer in New Mexico giving an opinion that it was legal in New Mexico for an LLC to own the DVC property. I believe this would not be legal in all states, but I just inferred that from the Disney request.

The entire process was a pain and took a couple of months. Finding a good lawyer that knew LLC law, was the hardest part.

This was a couple of years ago that I went through this process, so things might have changed at DVC.

 

[Jason@dvcstore]

You could each buy a 100 point contract individually, and each person could bank 100 and borrrow 100, would give you 300 points every 3 years.

In my opinion this would be the best option.

Jason