Dues math

[irazabul]

If DVC cannot sell 100% of an allotment of a resort, do the rest of the members pick up the shortfall in terms of annual costs of maintenance? For example, if DVC has 500 units available for sale, they only sell 400 units and the annual maintence cost is $500, is each unit holder responsible for $1 or $1.25?

 

[chalee94]

If DVC cannot sell 100% of an allotment of a resort, do the rest of the members pick up the shortfall in terms of annual costs of maintenance? For example, if DVC has 500 units available for sale, they only sell 400 units and the annual maintence cost is $500, is each unit holder responsible for $1 or $1.25?

as i understand it...

DVD intends to keep a very small percentage of each resort, in order to hold rooms out for normal refurbs and maintenance.

if DVD winds up holding more than that - as you suggest - they are responsible for that portion of the dues, and not the other owners of the resort. DVD can rent their points in order to pay those dues. (or else i guess they charge the dues to marketing expense if they give the points out as "developer" points in order to sell a newer property.)

 

[tjkraz]

Dues are subsidized by DVC for resorts that are not completely sold out. They will use sales projections to come up with averages for the number of units in service in the forthcoming year, and pick up the tab for units projected to remain unsold.

Resorts like AKV and BLT will be selling for several years to come. DVC will continue to subsidize dues at least while sales are ongoing.

If sales should fell behind estimates, it would not impact owners in the short run. DVC cannot back-charge members for any shortfall in operating dues. (Property taxes are another matter.)

In reality, if sales fell behind expectations I would expect similar cutbacks in services. With fewer rooms in service there is a reduced need for housekeeping, utilities, etc. And they could also find other creative areas to trim and maintain budgets (i.e. if gas prices skyrocket again, they simply reduce bus or boat frequency.)