DVC Purchase - Pending Reservation not Disclosed

[chris_ant]

So sorry this is happening to you. So many of us trust the professionals we work with in these type of situations to act honorably. Hindsight is alway 20/20, so we appreciate you sharing in the hopes others may learn from this experience. I am glad they were at least exposed on this site. Hopefully the word will spread and others will avoid doing business with them. I don't think any of us want to sink someones business, but we certainly don't want our friends and community to be treated in a manner such as this. I truly hope this gets resolved in a fair and equitable manner, and that you and your family make many years of joyful memories from your future stays.

 

[nickoley]

Since there is a specified date of close and delayed closing clause, I'd hang your hat on that as the sellers are delaying the closing due to undisclosed reservation. Stick with facts. Where is the money at right now?

 

[SmallWorldGal]

There is no specified date of close on the original contract which is crazy apparently, but there is no mention of a specific date. On the title company closing paperwork, they were estimating a 3/31 receipt of all documents date "for a timely closing". No one was made aware of reservation until yesterday. I actually spoke to the contract liaison who said she is actually who writes up the contracts for the broker company and meant to ask her about this, but I got side tracked and did not. She, as well as the contact I spoke with at the title company, seem to be in agreement that fault is clearly on the seller. Actually, the only person who seemed to want to place some fault on me at this point (even though I literally returned all documents and paid in full a month ago) is my agent ironically. Clearly, I won't be going through him anymore. The contract liaison from the broker company is supposed to get back with me by tomorrow. They are trying to get seller to cancel their reservation that was made after the fact and was not disclosed. If that is done, then original contract will be valid assuming that sellers actually return documents. If they don't want to cancel reservation, it would be seller default due to delay. My other question to her is if they do cancel reservation, how much longer are we giving them to return documents considering they are a month late, and I don't have an answer to that yet. They claim they've had issues securing a notary (which would be valid issue with covid), but they have also claimed to have appointments to notarize on 2 separate occasions and yet still no paperwork. My issue is the conflicting information. If their story wouldn't have changed so many times, I would be more understanding.

 

[EM Lawrence]

It sounds to me like the agent messed up and the seller was clueless in this situation. That’s the vibe I get anyway. I tend to believe the seller did not realize they had to disclose that they had a pending reservation. This is something the agent should have educated them on during the listing process so that the listing could be advertised accurately, as well as be submitted for ROFR accurately. I suspect you are dealing with an agent playing CYA. I would tell the agent that very bluntly and also make it clear that I was willing to make a formal complaint to his real estate licensing board If I did not get a full refund on the purchase (give him a date and time that you want this done by) and a written release that the contract had been violated by the seller. Also, I would communicate all of this in writing. If you have not already, keep good written notes about every conversation you have had with the agent. Keep any communication you have had in writing in a file somewhere.

 

[EM Lawrence]

@SmallWorldGal, I posted my message above before I read your latest update. It sounds like the contract liaison is working toward a good resolution for you! That is good news.

 

[EM Lawrence]

Also, I would be very careful in this situation even with the promising attitude of the contract liaison. If you agree to an extension of the original contract you may not be able to get out of closing. If you still want to close, that is not a big deal. But if you want to walk away, proceed with caution. I still don’t think you are dealing with people who are representing your best interest here.

 

[SmallWorldGal]

Honestly, I'm not sure who is the shady one... Someone is for sure. I have email correspondence where I specifically asked my agent if there were pending reservation because the points didn't add up otherwise (unless a transfer out was made), and I was told no pending reservations. I was also told by him that the seller's agent too asked the sellers if there were pending reservations and they were told no. Even if the question was posed prior to the sellers making a reservation, you would think that they would have advised the change to their agent considering they had advised otherwise. But, that information was relayed to me through my agent, so who's to say he's not trying to cover his own fault.

Thank goodness I did ask all of these questions through email and have kept everything!


I agree with your last comment as well. My only hesitation to not completely call it off is that they could blame the late return of sellers documents on a covid delay instead of strictly seller delay... even though they have provided conflicting data, there is a clause in the contract about potential for uncontrollable delays.

 

[EM Lawrence]

If you need help bolstering your case, all banks have notaries in their offices. It’s been a long time since my banking days, but we would provide notary services to anyone who needed it free of charge on request. Even if there is a small charge involved, that is hardly an uncontrollable circumstance. So from my point of view, notaries are not at all hard to come by, even with Covid happening. Banks are still open by appointment. Surely someone who has the financial means to own DVC has a relationship with a bank of some kind! Hopefully for you, they will agree to what the contract liaison has suggested...cancel their reservation and quickly return the paperwork. I hope this headache is soon over for you!

 

[dsnymnkyuncle]

Your closing date should be listed in your original paperwork that you signed,

I just sold one with a delayed closing and it was listed in that Document. It was even bolded and said, closing can not occur until June 26 but no later July 5th.

If your original document does not say anything about a delayed closing, then you should be able to end the deal,

In addition, check the point total. This should all have been verified by the selling agent,,,mine had to verify it..

I would be livid as well.

I don't have much experience with non direct purchases but I believe that paperwork (contract) has to disclose the status of all the points does it not? either the points were spent or being spent or they would pass to the purchaser. Something seems very odd about this to me.

 

[Sandisw]

I don't have much experience with non direct purchases but I believe that paperwork (contract) has to disclose the status of all the points does it not? either the points were spent or being spent or they would pass to the purchaser. Something seems very odd about this to me.

Correct. What is sounds like is that the contract did not include the points that the owner used to make the August reservation.

It was discovered after it went to ROFR, so instead of just letting the buyer know and renegotiating, they made the reservation with the points,

So, the missing closing date seems to have allowed them to do this, but as a seller, it violates the terms they thought they were agreeing to,

I wonder if it was from a canceled reservation that put those points there, or the sellers agent did not pull the point activity statement from Disney correctly.

 

[holyrita]

I haven't read through all of the comments in this thread, but in the contract I signed the day after my offer was accepted, it says:

The seller agrees not to borrow, book, transfer or otherwise use the points and the contract will remain as it was original signing. Should the points not be available the seller shall pay the buyer a rental fee of $25.00 per point for each point that is used.

 

[dsnymnkyuncle]

Correct. What is sounds like is that the contract did not include the points that the owner used to make the August reservation.

It was discovered after it went to ROFR, so instead of just letting the buyer know and renegotiating, they made the reservation with the points,

So, the missing closing date seems to have allowed them to do this, but as a seller, it violates the terms they thought they were agreeing to,

I wonder if it was from a canceled reservation that put those points there, or the sellers agent did not pull the point activity statement from Disney correctly.

Very interesting. I think one way or another all points have to be addressed in the contract. The odd closing date seems to mean there was a trip involved because no sale is allowed while a reservation is pending (a pretty smart rule). That would mean those points belonged to the seller and buyer would not get them. So in an interesting twist the reservation is cancelled and points returned. No fault or finger pointing by owner nor buyer.

Owner gets the points and rebooks but then closing can't happen till after the reservation so no closing.
Owner offers to sell points to buyer instead.

At first read this sounded almost like some kind of scam but now it seems to make sense

 

[Lumpy1106]

A little benefit of the doubt; I could easily see how a seller would have moved a trip date from say early May to early August with all that has happened. Sure, they should have told you, but things have been pretty crazy. A couple of questions;

1. What is the Use Year of the contract?
2. Were you aware that the points being used by the seller in August were not included in the contract?
3. When did you intend to book your first trip?

Reason I ask is, for all intents and purposes, you are not going to use the contract before August 2020 anyway (could take a chance on a June or July reservation I suppose). If you did not plan on booking a trip until August 2021, you will still be able to do that. If you planned on going in May or June 2021, that's a problem, in that you will miss your 11 month out booking window, and that will be crucial in the next year or so. As long as it's a Feb or later use year, you will still be able to bank points with that delayed closing date.

Now, if they didn't tell you they would be using the points, that is a BIG problem! You should not be paying 2020 MF's for those points NMW.

If you've thought through all of the above and it doesn't affect your plans too much - maybe just let it go. Points are points in the grand scheme. Yes, kinda shifty on their part, but pretty easy to move on, so why not do that? You'll have your own cash for the remainder of the contract $$ in hand until it closes in August and that is not a bad thing.

 

[Sandisw]

A little benefit of the doubt; I could easily see how a seller would have moved a trip date from say early May to early August with all that has happened. Sure, they should have told you, but things have been pretty crazy. A couple of questions;

1. What is the Use Year of the contract?
2. Were you aware that the points being used by the seller in August were not included in the contract?
3. When did you intend to book your first trip?

Reason I ask is, for all intents and purposes, you are not going to use the contract before August 2020 anyway (could take a chance on a June or July reservation I suppose). If you did not plan on booking a trip until August 2021, you will still be able to do that. If you planned on going in May or June 2021, that's a problem, in that you will miss your 11 month out booking window, and that will be crucial in the next year or so. As long as it's a Feb or later use year, you will still be able to bank points with that delayed closing date.

Now, if they didn't tell you they would be using the points, that is a BIG problem! You should not be paying 2020 MF's for those points NMW.

If you've thought through all of the above and it doesn't affect your plans too much - maybe just let it go. Points are points in the grand scheme. Yes, kinda shifty on their part, but pretty easy to move on, so why not do that? You'll have your own cash for the remainder of the contract $$ in hand until it closes in August and that is not a bad thing.

But, don’t you think it is unfair to not have disclosed? Buyer got closing paperwork in March, and promptly sent The money,,

Even if it was an April or May reservation, it should have been disclosed it was a delayed closing as the offer was in January.

Disney also passed on it without an up to date accounting, Just wrong all the way around and it sounds like the sellers found out that they had more points after they signed the deal,

They should have let the buyer know then.

 

[Lumpy1106]

But, don’t you think it is unfair to not have disclosed? Buyer got closing paperwork in March, and promptly sent The money,,

Even if it was an April or May reservation, it should have been disclosed it was a delayed closing as the offer was in January.

Disney also passed on it without an up to date accounting, Just wrong all the way around and it sounds like the sellers found out that they had more points after they signed the deal,

They should have let the buyer know then.

Oh, for sure. Benefit of a doubt, speculation on my part, 100%. There's a fair chance it could have been a COVID trip date change which should have been disclosed even still. BUT, this has been hard on all of us. If a little bit of understanding solves the problem, that seems like the easiest solution.

 

[Sandisw]

Oh, for sure. Benefit of a doubt, speculation on my part, 100%. There's a fair chance it could have been a COVID trip date change which should have been disclosed even still. BUT, this has been hard on all of us. If a little bit of understanding solves the problem, that seems like the easiest solution.

The buyer should have been told then before they sent all the money just a month ago, Again, if this reservation was in place when he bought in January, it should have been disclosed,

Sorry, but current situation or not, the seller and their agent pulled a fast one on the buyer without letting them know upfront that this contract was not presented accurately.

It also didn’t go to Disney accurately either. Expecting to close in early April and not being told until then it’s going to be another 4 months is dishonest,

The seller should have to cancel the trip, close on time, or withdraw.

 

[SmallWorldGal]

For clarity, I should state more of the terms of the contract. The contract was stripped. There were said to be no points on the contract until March 2022. I accepted the end of Jan. I was fine with the contract being stripped being I got a good deal for a small point contract (in pre-covid terms) and I wanted an amount that I was comfortable paying cash for. I questioned if there were pending reservations because of the fact that there were said to be no points for 2021 prior to the March use year, so I knew something was weird. I was told there were no pending reservations, so I was under the assumption that they were planning to transfer off of the contract. This is not a case of the trip being moved or cancelled due to covid. In my contract, seller was to cover mf for 2020 and credit for 2021. This made my upfront costs lower, and I was okay with that. So, throughout this whole process there was never supposed to be a delayed closing for any reason. All of the title company paperwork pointed to a closing the first of April, which is when I sent payment in full. Now, all of the sudden, 4 months later from initial offer and 1 month late on closing and me paying, there is a reservation. The agent says that the owner realized that they were going to lose points, so booked a reservation after the fact, not realizing that it would delay closing. My issue is that they clearly had to borrow 2021 use year points after the first of March for the points to make sense. (There are said to be 90-20UY 0-21UY and 70-22UY). I'm annoyed because clearly actions were taken after we entered into the contract, and even though I was never supposed to be receiving these points in the contract, I don't buy the fact that they are acting as if they didn't realize what they were doing. I feel like they could have easily been upfront and allowed me to make a decision based off of a realistic timeline. I truly think based on the contracts and the title paperwork that no one was aware of the reservation in advance. I'm not sure who missed what where, but there was definitely something missed.

So, even though I don't have points to use on the contract until later, I have points lined up to be transferred onto the contract so that I can still use it to manage my own reservation, and this delay will not allow me to book at the 11 month window. Again, my whole issue is the nondisclosure and just general sense that the whole mess was handled wrong which didn't allow me to make an informed decision.

 

[Sandisw]

For clarity, I should state more of the terms of the contract. The contract was stripped. There were said to be no points on the contract until March 2022. I accepted the end of Jan. I was fine with the contract being stripped being I got a good deal for a small point contract (in pre-covid terms) and I wanted an amount that I was comfortable paying cash for. I questioned if there were pending reservations because of the fact that there were said to be no points for 2021 prior to the March use year, so I knew something was weird. I was told there were no pending reservations, so I was under the assumption that they were planning to transfer off of the contract. This is not a case of the trip being moved or cancelled due to covid. In my contract, seller was to cover mf for 2020 and credit for 2021. This made my upfront costs lower, and I was okay with that. So, throughout this whole process there was never supposed to be a delayed closing for any reason. All of the title company paperwork pointed to a closing the first of April, which is when I sent payment in full. Now, all of the sudden, 4 months later from initial offer and 1 month late on closing and me paying, there is a reservation. The agent says that the owner realized that they were going to lose points, so booked a reservation after the fact, not realizing that it would delay closing. My issue is that they clearly had to borrow 2021 use year points after the first of March for the points to make sense. (There are said to be 90-20UY 0-21UY and 70-22UY). I'm annoyed because clearly actions were taken after we entered into the contract, and even though I was never supposed to be receiving these points in the contract, I don't buy the fact that they are acting as if they didn't realize what they were doing. I feel like they could have easily been upfront and allowed me to make a decision based off of a realistic timeline. I truly think based on the contracts and the title paperwork that no one was aware of the reservation in advance. I'm not sure who missed what where, but there was definitely something missed.

So, even though I don't have points to use on the contract until later, I have points lined up to be transferred onto the contract so that I can still use it to manage my own reservation, and this delay will not allow me to book at the 11 month window. Again, my whole issue is the nondisclosure and just general sense that the whole mess was handled wrong which didn't allow me to make an informed decision.

Yes, and if there were borrowed 2021 points, then the contract went to Disney for ROFR wrong.

I would contract the title company. I am selling a delayed closing contract and the agent had to verify everything was accurate before they listed,

As you said, nothing in your paperwork indicated an Aug reservation or any, so i would want to see when the reservation was made which the seller could provide and your agent should ask for a copy of the point activity statement as that would show that,

If it was made after the fact, then they sold you a contract that had points but they didn’t want to disclose

 

[KAT4DISNEY]

The agent says that the owner realized that they were going to lose points,

This is such an odd statement. Either they gave the wrong info for the listing and felt they weren't being properly compensated or ?????

FWIW as I understand it the information of the existing reservation should have come back from DVC which would imply the broker messed up in not noticing it. Of course Disney isn't always perfect either but there's some odd stuff going on with this.

I don't see why anyone would decide you were in breach of the contract if you decided to back out assuming that is what you wanted to do. And if not then suggest that the broker ask the owner to cancel the reservation. It would have to get back for a sign off from Disney but they likely wouldn't want to touch this one with a ten foot pole as they also might be somewhat at fault in their review.

 

[zavandor]

If you want to close anyway, do what someone else suggested: offer the seller to book a reservation for them after you get the contract. If it's March UY they have until February to use the points.
If you prefer to back out and look for a better or cheaper contract, I think you should be able to.