The risk is fairly minor at this time because unused inventory goes to breakage (up to 2.5% of budget) and if DVC takes those over, they can be rented outside of breakage. One thing I don't think I've seen previously discussed on this or other similar forums is the difference in DVD owned inventory (developer, foreclosed due to loan defaults & ROFR) vs DVCMD owned when taken back for non payment of dues. This is an important distinction IMO. My guess is they have either a sales agreement or repurchase agreement with DVD to move that inventory but I don't know that for certain. One thing I do know is that it would technically be separate inventory owned (at least initially) by DVCMC and NOT DVD. The problem is the time between when the membership becomes non performing and it's actually legally under DVC's control. That's the period of time when we are truly at risk for the extra dues. But even then this issue generates availability without competition for reservations so it's not that bad unless the defaults are wholesale. If that happens, the entire resort system would likely go under anyway so the risk would be finite.
At a certain point, who cares? It's not like you'll be refinancing your mortage in your late 70s. As the saying goes, you might not even be buying green bananas.
Plus it only impacts your credit if you have good credit and if it gets reported to the credit agencies, many timeshares tend not to.
You may be right, DVCMC's only recourse may be to mark them chronically in violation and suspend usage of the points. DVD wouldn't have any rights in that situation though unless there were also a loan. As a min you've got to figure that someone somewhere has said just take it back because we can't pay it. When I get the opportunity, I'll have to ask that question of the appropriate people.
It, combined with Disney's incredible track record of mostly always making decisions that very effectively separate customers from their money, is also the "very reason" why the most likely scenario is that Disney is going to see the boundary, beyond which they should not "push the membership" long before they reach it, and stop just before they cross it. From our vantage point, the very best signposts we can read with regard to knowing where the boundary actually is, is indeed Disney's own actions. There is practically no information generally available to us that is a better indicator, even though it isn't always correct.
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Of course this is the plan. ROFR only works if things are good all over and sales are robust. They haven't used ROFR enough in a while to make much dent in the prices listed. The goal is simply to find a way to drive buyers to retail. ROFR doesn't do that unless the prices are close and DVC can't afford to overpay to keep them close. My prediction is this change will not be nearly enough and thus we've not seen the last of such changes.Interesting.
I could see this scenario / here's what I'm thinking.
With a two tier system the pressure on DVC to execute ROFRs (in my opinion) will diminish. Their reasoning for maintaining an artificial price point will be unnecessary - why? - because you can no longer argue/compare apples to apples. "Resale is now a different tier 2 service - we don't offer that - what happens in a few years when you're sick of going to the parks and you want to take trip to Spain? etc. etc." The DVC spin doctors will be able to eloquently present this argument I'm sure ...
I believe that DVC will slowly get out of the ROFR business more and more (like they are showing today) - this (again IMO) will eventually pick away at the artificial base/value of the resale market, ultimately driving prices lower.
All it takes is a few contracts/precedents to break the base price points ... once the ROFR safety-net is removed (should something like this happen at all) then things get really interesting IMO.
Cheers,
Zebsterama
Nor is it with any other timeshare either. However, it should have been part of each and every buyers view when they bought. I've even seen a couple of people on DIS over the years say they didn't buy a timeshare, they bought DVC which simply emphasizes their lack of understanding of the product they paid their money for.
once the ROFR safety-net is removed (should something like this happen at all) then things get really interesting IMO.
Cheers,
Zebsterama
Good point. Disney's projection is that they're better than the other timeshares, and they are. The problem was thinking that that meant that Disney was required to not only be better, but to be biased toward the customer's benefit in every way, for every aspect of the timeshare-owning experience. That's simply not a reasonable expectation. That's not what "better" means.
It seems that people are not only expecting DVC to be HONEST about their timeshare but to point out the negatives and limitations for that person's situation beyond that. In addition they're also expecting an accurate prediction of possible changes that might affect that person's situation in a negative way. It also seems they expect not negatives changes even if legally allowed. All totally unrealistic and unreasonable expectations.
