CRO v. Points Checks and Balances

[wdrl]

Yep, backwards. We own 93-98%. They own between 7 and 2% for maintenance. I think its closer to 2, but I can't remember. Its in that range though.

The POS restricts DVD from selling more than 98% of a resort. This language is in the POSs for BLT, AKV, and Aulani, so I assume it applies to all DVC resorts. Although we commonly refer to that 2% holdback as being for maintenance purposes, there is nothing in the POS that requires that DVD hold 2% back for maintenance; it can rent out that space if it wants.

At Aulani (and, I suspect at the other DVC resorts), each Vacation Home has 51 seven Use Day Availability periods. Since there are 52 weeks in a year, I suspect that maintenance and "down time" is built into the availability of each Vacation Home.

 

[tjkraz]

I don't think they pay maintenance fees - but they might. They DO pay rental income back into DVC which offsets our dues on breakage points. Other rooms that are rented through CRO come from trades, on which a member has already paid maintenance. This is also covered in both your POS and your annual statement.

Yes, DVD does pay maintenance on unsold and retained inventory. From the annual budget notes:

DVD currently retains no less than 2 percent of the total Ownership Interests in each Unit declared in the Condominium and is responsible for annual dues with respect to its retained or unsold Ownership Interests.

Most resorts' budgets go on to state the exact number of declared, unsold and retained points. However that information is presented as of the most recent calendar year so it's a bit out of date. 2010 budgets--mailed in November '09--show totals as of 12/31/08.

Undeclared Units are not covered by the budget, meaning DVD is on the hook for all operating expenses associated with those Units and their subsequent rental through CRO.

There is also a footnote which states that, aside from property taxes, the budget represents the full financial obligation for members for the year. If the resort goes over budget, DVD is responsible for the overage. I suspect members made out well on that a few years ago when gas prices shot through the roof:

Pursuant to a Maintenance/Subsidy Agreement, DVD has agreed to guarantee to the Association that for the calendar year of this Budget no Owner will be required to pay more than the Annual Dues Assessment (exclusive of Ad Valorem Taxes) set forth in this budget and that DVD will pay the difference between the actual costs incurred in operating the Condominium during the calendar year and all amounts assessed to Owners other than DVD with respect to such Operating Costs.

In the event that there is a surplus in the budget from a prior year, the board has historically voted to have the monies deposited into the capital reserves fund.

 

[adminjedi]

Bring in the "snarky" police!

 

[Dean]

So let me make sure I've got this straight...

1) There is no accountbility for annual dues as far as DVD's points and essentially they don't have to pay for dues on their points.

2) We don't know how many points they own or how they shift them from resort to resort for CRO and we don't know if they are bound by the same 7/11 month windows we are.

3) We don't know if DVD pays any maintenance fees from CRO income much less a fair percentage based on what is sold.

4) If members own 90% (made up number) of a sold-out resort, there is no accountability that members are actually getting 90% of the points (minus those traded out on any given day, of course) on any given day.

5) General concensus seems to be that CRO rooms are virtually always available at DVC resorts while many times, we cannot book rooms; especially during busy periods.

Nice.

What have I missed?

I gotta tell you what folks. I cannot believe timeshare laws let basically any of this stuff slide. I would have believed that time-share laws would have buried them in paperwork to be accountable for these types of things. When I originally posted this, I was just naive enough to believe that I just didn't know the answers. I didn't even fathom that there were no answers. I'm still trying to get my arms around that fact.

Essentially, I'm a CRO guest that has pre-paid at fair market rate and am at the mercy of Disney to decide whether they want to give me a room or not. It's starting to look like I'm low man on the totem pole at that. Please tell me what I'm missing.

Don't get me wrong, folks. I'm still in. I'm just a little disillusioned right now. I don't like the thought of buying anything with no system of accountability for its usage which is essentially what we seem to have here.

I'm a businessman. I don't get it and to be honest with you, some of you guys that seem to be dismissing it as unimportant surprise me given how sharp you guys are as business people. I guess you've just pigeon-holed it into what I call that "it is what it is" category. I'm just having a hard time placing it there than most, I guess.

Welcome to timeshares. You have the options to opt out if you chose. Realize that DVD is a developer and DVC a timeshare management company and they are 100% separate legally. Seriously, you should make the appt and go spend the day with the suites in Celebration.

 

[Sammie]

Also those folks staying at a resort on cash might be ones that book rooms given back to Disney and the DRC to rent as cash due to a trade out, to cruises etc.

There is a lot more trading out, that goes on than most DISers know about.

Also at 60 days out, all unbooked inventory goes to cash reservations. Some of that can be reclaimed for points but it is up to the resort to approve that.