Deed Expiration - what happens?

[jvattes]

Hi all -

I think I've got a good handle on most everything about buying into DVC and we are >< close to taking the plunge. What I can't seem to find is what happens when the deed expires? Is ownership complete at that point? Can you (or your family, if you pass it on to them) buy back in? Will the cost be greater?

Thanks.

 

[disneynutz]

What will happen is what Disney the most money. Offer an extension like they did at OKW, sell new contracts at the same resort, or tear the resort down and build a new, larger resort. What ever they do it will cost us more.

Bill

 

[BillPA]

If nothing changes, your deed just goes back to DVD. It's anyone guess at this point as to what DVD/Disney will do.

 

[chalee94]

Hi all -

I think I've got a good handle on most everything about buying into DVC and we are >< close to taking the plunge. What I can't seem to find is what happens when the deed expires? Is ownership complete at that point? Can you (or your family, if you pass it on to them) buy back in? Will the cost be greater?

Thanks.

My OKW contract says that on Feb 1 2042, I will own nothing and I will owe nothing.

You can search for several past threads with speculation galore. But Disney will own the property completely - whether they want to rent the rooms or resell the properties as timeshares will be up to them. Costs to buy back in (or extend - if they offer it again) will likely be high based on historical trends. But by 2042, Orlando may be an oceanfront town or a Chinese corporation may own Disney - who knows?

 

[mustinjourney]

it's a lot like a car lease. At the end of the lease -- you give them the keys and walk away. So while you have "ownership" -- you really are just leasing the timeshare. Like others have said -- we don't know what options might exist towards the end. But as it stands right now, you are no longer an owner/member once those points expire.

Personally speaking -- 25+ years is a long time away from now. Even if you're young, you'll be mid-50s when it expires and what works for you now is unlikely to work for you then. I'd keep my focus on the 5 to 10 year horizons, since anything beyond that is a crapshoot.

Good luck!

 

[MountainMouse]

Just out of curiosity, do you have to pay dues in your expiration year? So, for an expiring OKW contract would you owe anything on 1 January 2042? I would think not.

 

[Matty B13]

it's a lot like a car lease. At the end of the lease -- you give them the keys and walk away. So while you have "ownership" -- you really are just leasing the timeshare. Like others have said -- we don't know what options might exist towards the end. But as it stands right now, you are no longer an owner/member once those points expire.

Personally speaking -- 25+ years is a long time away from now. Even if you're young, you'll be mid-50s when it expires and what works for you now is unlikely to work for you then. I'd keep my focus on the 5 to 10 year horizons, since anything beyond that is a crapshoot.

Good luck!

Speak for yourself, I plan on going till I'm 90's........

 

[Dean]

Hi all -

I think I've got a good handle on most everything about buying into DVC and we are >< close to taking the plunge. What I can't seem to find is what happens when the deed expires? Is ownership complete at that point? Can you (or your family, if you pass it on to them) buy back in? Will the cost be greater?

Thanks.

Assume it's gone at the end of the RTU. Even if they offer an extension, it's unlikely to be a reasonable one for most people, the one they offered at OKW certainly was not at the time and isn't now given the prices in question ($15 pp then up to $25 pp now).

Just out of curiosity, do you have to pay dues in your expiration year? So, for an expiring OKW contract would you owe anything on 1 January 2042? I would think not.

We really don't know what will happen. Assuming no extension, there is clearly not enough inventory to accommodate all of the points the last couple of years. We don't know how they'll handle it. I'd assume banking is blocked the last year or 2 minimum and borrowing may be the last year as well. I'd also assume you pay dues on a prorated amount for the UY at the worst but possibly less if you don't get to use the points or aren't allowed to.

 

[supersnoop]

Hi all -

I think I've got a good handle on most everything about buying into DVC and we are >< close to taking the plunge. What I can't seem to find is what happens when the deed expires? Is ownership complete at that point? Can you (or your family, if you pass it on to them) buy back in? Will the cost be greater?

Thanks.

From a legal perspective, Disney owns the land and you own the building. Disney leased the land to DVD (The developer) for 50 years. When the lease expires, Disney gains ownership of everything on their land. You get nothing.

 

[anitatina]

Assume it's gone at the end of the RTU. Even if they offer an extension, it's unlikely to be a reasonable one for most people, the one they offered at OKW certainly was not at the time and isn't now given the prices in question ($15 pp then up to $25 pp now).

$15 pp doesn't seem terrible assuming the owners would use the property for another 15 years or pass it on to someone who would.

 

[Dean]

$15 pp doesn't seem terrible assuming the owners would use the property for another 15 years or pass it on to someone who would.

The real value at the time was around $8 per point since you would be paying for a potential benefit on the backend in dollars at the time. It was really more at $15 then than $25 would be now.

 

[vacationer1954]

We really don't know what will happen. Assuming no extension, there is clearly not enough inventory to accommodate all of the points the last couple of years. We don't know how they'll handle it. I'd assume banking is blocked the last year or 2 minimum and borrowing may be the last year as well. I'd also assume you pay dues on a prorated amount for the UY at the worst but possibly less if you don't get to use the points or aren't allowed to.

The idea that they're obligated to pay dues for points that they cannot use is going to be a bit of a shock to people, I'm sure. Is it really going to be that prevalent, though, that you'll call up and be told, "There are no rooms left at all"? Or will it be more a matter that the only choices you may have available to you are dates you do not want?

I guess Use Year also comes into it. Will members with a July Use Year and a 200 point contract get 100 points in UY2041, or will they get their full allocation of 200 points and then have to battle it out to use them in the six months before deed expiration?

 

[chalee94]

$15 pp doesn't seem terrible assuming the owners would use the property for another 15 years or pass it on to someone who would.

Keep in mind that you would be paying thousands for pts that you can't use for 35 years.

A lot of OKW owners decided that instead of paying $15 per pt to extend their 200 pt contract, they'd rather spend the same money for a 40-50 pt add-on with pts they could use immediately.

Many of those who thought as you do paid to extend - several of those had life changes that led them to sell earlier than they expected - and found that the $15-25 premium that they paid to extend was only worth $5-8 in the resale market.

Which is why most did not choose to extend...

 

[chalee94]

The idea that they're obligated to pay dues for points that they cannot use is going to be a bit of a shock to people, I'm sure. Is it really going to be that prevalent, though, that you'll call up and be told, "There are no rooms left at all"? Or will it be more a matter that the only choices you may have available to you are dates you do not want?

I guess Use Year also comes into it. Will members with a July Use Year and a 200 point contract get 100 points in UY2041, or will they get their full allocation of 200 points and then have to battle it out to use them in the six months before deed expiration?

This is getting into issues that have not been explicitly addressed.

I expect a 200pt BCV contract will get a full allocation in 2041. I expect 2041 to be kinda like fall frenzy but all year long. I don't expect any annual dues to be charged for 1 month of 2042.

Dean has speculated that you may be able to deed back your contract early with annual dues waived for pts not used. Dean has speculated that banking and borrowing may be suspended in 2040 or so.

But there's a lot that we don't know.

 

[Dean]

The idea that they're obligated to pay dues for points that they cannot use is going to be a bit of a shock to people, I'm sure. Is it really going to be that prevalent, though, that you'll call up and be told, "There are no rooms left at all"? Or will it be more a matter that the only choices you may have available to you are dates you do not want?

I guess Use Year also comes into it. Will members with a July Use Year and a 200 point contract get 100 points in UY2041, or will they get their full allocation of 200 points and then have to battle it out to use them in the six months before deed expiration?

This is getting into issues that have not been explicitly addressed.

I expect a 200pt BCV contract will get a full allocation in 2041. I expect 2041 to be kinda like fall frenzy but all year long. I don't expect any annual dues to be charged for 1 month of 2042.

Dean has speculated that you may be able to deed back your contract early with annual dues waived for pts not used. Dean has speculated that banking and borrowing may be suspended in 2040 or so.

But there's a lot that we don't know.

Mathematically there simply won't be enough rooms in the system the last year in 2041 through Jan, 2042 to handle all of the points so they will have to do something. This is a certainty unless they find a way to siphon them off for other exchange options. Obviously they'll have to suspend banking at some point, you wouldn't want to bank to Dec, 2041 then not be able to use the points and you wouldn't have anywhere to bank starting with the Feb 2041 UY anyway.. I'd guess they will suspect banking starting either with the 2040 UY or possibly the year before. They may also suspend borrowing but I think that's less likely. As to how they'll handle the surplus, I have offered several possibilities but haven't singled out one. These would include voluntary relinquishment of points absent dues, a lottery and a free for all. I doubt even if they forfeited the ones they own that it'd be enough to free up sufficient space. I'm pretty certain one want have to pay dues on points not able to be used but the dues should be much smaller the last couple of years also.

 

[chalee94]

... the dues should be much smaller the last couple of years also.

...as a result of there being no need to fund reserve accounts. Yep.

Still curious to see if OKW-42 owners really get a break on dues toward the end. Hope that pans out.

 

[jvattes]

From a legal perspective, Disney owns the land and you own the building. Disney leased the land to DVD (The developer) for 50 years. When the lease expires, Disney gains ownership of everything on their land. You get nothing.

 

[Jelly563]

They will need to prorate the dues near the end because they obviously wont be doing any refirbs. I can also see people not paying dues, what is there to lose ?

 

[mustinjourney]

Speak for yourself, I plan on going till I'm 90's........

At the rate I'm going, I'll need new knees, ankles and a hip by 55.

On second thought, I suppose I'll be half robot by then, so perhaps I will be able to still go in 50 years.

 

[mustinjourney]

They will need to prorate the dues near the end because they obviously wont be doing any refirbs. I can also see people not paying dues, what is there to lose ?

That's a good point. Especially if you borrow your points.