disaster fees

[alohatok1986]

I am in the rofr waiting period & was discussing DVC with a friend. He asked if there is any clause in the contracts that protects DVC owners from paying an outlandish sum in case of a disaster (hurricane, fire, etc). His family member owned a timeshare in which they raised the annual fee to approximately 100k to cover the repairs after the building was damaged. I know they can raise our maintenance fees, but is there any cap or protection in place for that kind of situation? Thanks in advance!

 

[hhisc16]

I am in the rofr waiting period & was discussing DVC with a friend. He asked if there is any clause in the contracts that protects DVC owners from paying an outlandish sum in case of a disaster (hurricane, fire, etc). His family member owned a timeshare in which they raised the annual fee to approximately 100k to cover the repairs after the building was damaged. I know they can raise our maintenance fees, but is there any cap or protection in place for that kind of situation? Thanks in advance!

Not sure about a "cap", but hurricanes have hit DVC resorts before.
Hurricane Matthew hit Disney's HHI Resort and the DVC owners at HHI had to pay for the repairs with a loan from DVC.
It has since been paid off though.

 

[BeachClub2014]

Not sure about a "cap", but hurricanes have hit DVC resorts before.
Hurricane Matthew hit Disney's HHI Resort and the DVC owners at HHI had to pay for the repairs with a loan from DVC.
It has since been paid off though.

This is really interesting. I assume that the dues went up to service the loan? Do you know if the dues went back down post loan payoff?

 

[hhisc16]

This is really interesting. I assume that the dues went up to service the loan? Do you know if the dues went back down post loan payoff?

The loan from DVC to pay for the hurricane damage was paid off with higher dues for the years that the HHI owners had to repay.
Hard to say on whether dues went back down since dues in 2017 for HHI was rough $7.30/pt and are roughly $10/pt in 2022.
Loan was repaid in full in 2021.

 

[erionm]

This is really interesting. I assume that the dues went up to service the loan? Do you know if the dues went back down post loan payoff?

The loan was repaid by way of a special assessment. I believe there was also a special assessment to pay off a load from DVD for storm damage at Vero Beach as well.

 

[CaptainAmerica]

His family member owned a timeshare in which they raised the annual fee to approximately 100k to cover the repairs after the building was damaged.

That doesn't really apply to DVC because there are so many owners. It sounds like somebody owned some kind of huge percent of a property rather than a tiny fraction of a single unit of a large property. It also sounds like that property was improperly insured.

Hilton Head and Vero Beach have about 1.5 million points each, roughly equivalent to 10,000 150-point memberships. A member seeing dues of $100K would be $1 billion in total. Disney could blow up and rebuild the entire resort three times and it wouldn't cost $1 billion.

 

[BeachClub2014]

Hilton Head and Vero Beach have about 1.5 million points each, roughly equivalent to 10,000 150-point memberships. A member seeing dues of $100K would be $1 billion in total. Disney could blow up and rebuild the entire resort three times and it wouldn't cost $1 billion.

Don't give them any ideas!

 

[BeachClub2014]

The loan from DVC to pay for the hurricane damage was paid off with higher dues for the years that the HHI owners had to repay.
Hard to say on whether dues went back down since dues in 2017 for HHI was rough $7.30/pt and are roughly $10/pt in 2022.
Loan was repaid in full in 2021.

The loan was repaid by way of a special assessment. I believe there was also a special assessment to pay off a load from DVD for storm damage at Vero Beach as well.

Thank you for these replies. In my research and experience with DVC over the years, I hadn't heard this before.

 

[erionm]

This is really interesting. I assume that the dues went up to service the loan? Do you know if the dues went back down post loan payoff?

Hilton Head received damage from Hurricane Matthew in 2016 and Hurricane Irma in 2017. The initial special assessment at HHI was for 5 years at $.11 per point. That assessment was extended one year with the assessment for 2018 being $.1111 per point (assessment reverted back to $.11 in 2019 until paid off in 2021).

Vero Beach received damage due to Hurricane Irma and had a special assessment for one year at $.0619 per point or $.0325 per point for owners with subsidized dues.

Saratoga Springs received some damage from Hurricane Irma and had a one year special assessment of $.0143 per point. This damage was mainly confined to the Treehouse Villas portion of the resort.

Most of what was covered by these special assessment was the hurricane deductibles.

 

[BeachClub2014]

Hilton Head received damage from Hurricane Matthew in 2016 and Hurricane Irma in 2017. The initial special assessment at HHI was for 5 years at $.11 per point. That assessment was extended one year with the assessment for 2018 being $.1111 per point (assessment reverted back to $.11 in 2019 until paid off in 2021).

Vero Beach received damage due to Hurricane Irma and had a special assessment for one year at $.0619 per point or $.0325 per point for owners with subsidized dues.

Saratoga Springs received some damage from Hurricane Irma and had a one year special assessment of $.0143 per point. This damage was mainly confined to the Treehouse Villas portion of the resort.

Most of what was covered by these special assessment was the hurricane deductibles.

Great information, thanks! So not a huge individual impact at all.

 

[karrit2000]

From what I remember from when I originally bought in 1996 there is a cap on how much they can raise annual dues each year but I don't recall what that percentage is. Compounded over time it can really add up but I don't think any annual raise has ever approached even halfway to the cap. As others already said they can issue special assessments which when spread out over the membership at impacted resorts doesn't see too excessive.

 

[Judique]

wrong thread

 

[CraigInPA]

I am in the rofr waiting period & was discussing DVC with a friend. He asked if there is any clause in the contracts that protects DVC owners from paying an outlandish sum in case of a disaster (hurricane, fire, etc). His family member owned a timeshare in which they raised the annual fee to approximately 100k to cover the repairs after the building was damaged. I know they can raise our maintenance fees, but is there any cap or protection in place for that kind of situation? Thanks in advance!

DVC carries insurance to cover some facets of a natural disaster. There are high deductibles, of course. These can hit the members as a special assessment. If the entire resort is wiped out and it makes no sense to rebuild it, DVC has the option of liquidating the resort and paying the members their portion of the proceeds.

 

[alohatok1986]

Hilton Head received damage from Hurricane Matthew in 2016 and Hurricane Irma in 2017. The initial special assessment at HHI was for 5 years at $.11 per point. That assessment was extended one year with the assessment for 2018 being $.1111 per point (assessment reverted back to $.11 in 2019 until paid off in 2021).

Vero Beach received damage due to Hurricane Irma and had a special assessment for one year at $.0619 per point or $.0325 per point for owners with subsidized dues.

Saratoga Springs received some damage from Hurricane Irma and had a one year special assessment of $.0143 per point. This damage was mainly confined to the Treehouse Villas portion of the resort.

Most of what was covered by these special assessment was the hurricane deductibles.

Thank you for this detailed information. Hurricane Irma took out my house also. She was a real jerk, lol.

 

[Chuck S]

If a resort is totally deemed to be not worth repairing, the insurance would be divided among the owners of that resort, and they will no longer be DVC Members as the resort would be closed.

 

[DebbieB]

From what I remember from when I originally bought in 1996 there is a cap on how much they can raise annual dues each year but I don't recall what that percentage is. Compounded over time it can really add up but I don't think any annual raise has ever approached even halfway to the cap. As others already said they can issue special assessments which when spread out over the membership at impacted resorts doesn't see too excessive.

15%, not including property taxes.

 

[Maistre Gracey]

I was an owner at VB when two hurricanes hit the resort. (I think it was 2004??)

Resort closed for a couple of weeks for repairs. Word said pool was full of sand, but there was more damage than just that.

Regardless, other than the non ability to book the resort, there was not a special assessment of any kind.
That said, we may have insidiously paid for it in subsequent years via insurance incorporated into dues.

 

[AnnaKristoff2013]

Not sure about a "cap", but hurricanes have hit DVC resorts before.
Hurricane Matthew hit Disney's HHI Resort and the DVC owners at HHI had to pay for the repairs with a loan from DVC.
It has since been paid off though.

The buildings aren't insured?!?

 

[hhisc16]

The buildings aren't insured?!?

From what I understand of the situation at DHHIR was that the insurance from the hurricane did not cover all of the costs to fix the resort.

 

[erionm]

The buildings aren't insured?!?

They are insured, but have a very high hurricane deductible of $100,000 or more.