contract length question

[smw]

so we're pretty close to pulling the trigger, but ive got one question...

whats the deal with the lengths of contracts being different? seems like at the point of sale youd be getting the same number of years no matter where you buy.

how is the length and end year determined? i see all these resale listings and the end years seem to be the same at certain resorts. for example, everything i see for one of the resorts ends in 2042 or so... does that mean the person who bought there 10 years ago gets it for 41 years but if i buy tomorrow id only get it for 31?

 

[zawisza]

Each Vacation Club Resort has a set end date for all points at that resort. Old Key West, Boardwalk Villas, Beach Club Villas, Villas at Wilderness Lodge, Vero Beach Resort and Hilton Head Resort end January 31, 2042 (Old Key West could have been extended to 2057). Saratoga Springs memberships end on January 31, 2054, Animal Kingdom Listings end on January 31, 2057, Bay Lake Towers and The Villas at Disney's Grand Californian Hotel and Spa end end January 31, 2060.

 

[smw]

right, so lets say we bought at boardwalk in 2037... we'd only get the place for 5 years? whereas someone who bought today would have it for 31?

this doesnt make sense to me. shouldnt everyone own at _____ resort for the same number of years regardless of when you purchase?

 

[marie1981]

If there is no extension, in 2037, you would get it for 5 years, but price per point would be very very low....

 

[alice99]

so we're pretty close to pulling the trigger, but ive got one question...

does that mean the person who bought there 10 years ago gets it for 41 years but if i buy tomorrow id only get it for 31?

That's exactly what that means.

One of the reasons I bought re-sale from a private realtor..... not directly from Disney..... at that time price per point was exactly the same for ALL resorts, regardless of the year contract expired.

 

[smw]

If there is no extension, in 2037, you would get it for 5 years, but price per point would be very very low....

ah, so thats where it works out, then? each year that goes by the points are cheaper?

just seems so odd that ALL contracts at each hotel end the same year. when this magic year hits, i guess there will be a new end date 40 or so years later? wouldnt it be so much easier to just give each person a 40 year contract?

 

[Sandisw]

ah, so thats where it works out, then? each year that goes by the points are cheaper?

just seems so odd that ALL contracts at each hotel end the same year. when this magic year hits, i guess there will be a new end date 40 or so years later? wouldnt it be so much easier to just give each person a 40 year contract?

DVC contracts are not lifetime contracts and that is why the end date doesn't change.

Most of the resorts started with about a 50 year deed so when you buy, you are buying what is left on the deed.

 

[Chuck S]

The land upon which the DVC resorts are built is leased by DVD (Disney Vacation Development), the building and sales arm of DVC. In their respective end years, that land, and the buildings upon it, revert to the owner of the land, which is Disney.

WHile DVC is a deeded timeshare, your deed is actually an ownership percentage in one DVC unit that is subject to the terms of the lease. Thus when the ground lease expires, your ownership & membership expire.

 

[chalee94]

right, so lets say we bought at boardwalk in 2037... we'd only get the place for 5 years?

actually, it expires in jan 2041, so more like 3-4 years.

ah, so thats where it works out, then? each year that goes by the points are cheaper?

supply and demand, wdw's hotel pricing and inflation also impact the DVC contract pricing. (along with DVC's ability to take perks away from resale buyers).

but generally, yes, you'd expect the price to drop over time.

just seems so odd that ALL contracts at each hotel end the same year. when this magic year hits, i guess there will be a new end date 40 or so years later? wouldnt it be so much easier to just give each person a 40 year contract?

as chuck explained, when the lease runs out, DVC can build a new property or else just sell new contracts at the old one if it's still in great shape and popular... and naturally, that would also make more money for disney...

 

[Deb & Bill]

...supply and demand, wdw's hotel pricing and inflation also impact the DVC contract pricing. (along with DVC's ability to take perks away from resale buyers).

but generally, yes, you'd expect the price to drop over time....

Unless you are DVC selling those points and you can jack up the price and keep on jacking it up until you have to start reducing the price.

 

[snoope]

Does anyone think they will be ever offering extensions on any DVC resort again?

 

[chalee94]

Does anyone think they will be ever offering extensions on any DVC resort again?

based on the OKW extension being a disaster, i don't expect another extension any time soon.

keep in mind that OKW is a free-standing resort (in other words, it is not connected to a wdw hotel like BWV/BWI) and DVC was free to make this decision without consulting the disney hotel division...that would not be the case for BCV/BWV/VWL, for example. extensions there would be more complicated.

if they do offer extensions for other DVC resorts, i expect it will be similar to the OKW extension in one respect: wayyy overpriced.

 

[Chuck S]

If the buildings are viable at the end on the contract period, I would expect them to go ahead and let them revert to Disney for a short time, then renew the groung lease, do any necessary refurbishments and then resell as new contracts, maybe giving a discount to the original owners. It seems a lot less messy legally than extendting the lease, and getting all the members to either pay up or sign a new deed back to DVC at the end of the lease period.

It would also give Disney the ability to close the entire resort, in the instances of combined DVC/Hotel properties, for refurbishment before reselling the timeshares.

 

[smw]

thanks, guys.

so if i understand this correctly, although both disney, i should think of wdw and dvc as two separate entities here, with (in very general terms) wdw opening a resort and saying "here you go, dvc... this is yours with a 5X year lease."

 

[LisaS]

actually, it expires in jan 2041, so more like 3-4 years.

Actually it expires Jan 31, 2042, not in 2041.

 

[Chuck S]

thanks, guys.

so if i understand this correctly, although both disney, i should think of wdw and dvc as two separate entities here, with (in very general terms) wdw opening a resort and saying "here you go, dvc... this is yours with a 5X year lease."

Sort of. The ground lease is from Disney, DVD is the builder/seller. DVC and its membership contract with Disney Resorts to operate the DVC resorts. The DVC resort owners could vote (unlikely) to withdraw their home resort from the DVC/Disney system and hire and outside management company, like Marriott or Hilton. And if Disney becomes unhappy with their role of managing the DVC resorts, they can also forceowners to find another management company. Again, unlikely.