DVC resale- can only use points at home resort?

[SteffyLou]

Please excuse me if this had been posted before.

Family of mine just purchased at Poly through Disney. They had considered resale, but ultimately went new for financing reasons.

Anyway, after they signed the contract the salesman told them:

"Heard some very interesting info yesterday when buying DVC. Our consultant said Disney is considering ruling that if you buy a DVC from a third party you can only use those points for THAT resort.

i.e. You buy 50 Beach Club points resale. You can only use those points for Beach Club. No other DVC.

This is only for resale. Doesn't affect yours or our DVC since we bought from Disney proper. The consultant said it is in the real estate rider so conceivably they could do it."

Has anyone else heard this? I don't know how it's possible. This would completely change our mind too as we are considering resale now to add-on.

 

[Disney Dad ADL]

That's incorrect. Resale points are exactly the same as direct points in every way when booking DVC resorts. BCV points can be used at any DVC resort Aulani, SSR, VGC, etc.

As of now, you can also use resale points to exchange into RCI, but this could change.

The main restriction is that you can't use resale points for cruises, and you can't use them to stay at Non-DVC Disney hotels (like Disneyland Hotel for example), and some other things that I'm forgetting. Direct points can be used for cruises etc.

Edit: also, the way I read the Condominium Declarations, it is not legal to restrict resale points in the way you are suggesting, unless they take some really drastic measures.

 

[Matty B13]

If this came true, I don't think I would buy anymore DVC direct or resale. If you couldn't get out, i.e. resell your contract without significant restrictions put on it, the value would go to zero just like every other timeshare out there on the market. The ability to get out of your contract is a large reason we bought DVC, you never know what might happen in your family's life. I would also be very upset with the DVC management over this and see it as typical timeshare sales tactic, and I wouldn't want to do business with people like that. Changing terms after sales, even when it is in the contract deed, I think is dishonest!

 

[KAT4DISNEY]

THAT rumor - has been coming from some guides for years. I'm sure they'd like to but haven't found a way to do it. From what I've read in the documents there seems to be little way they could do that without completely removing the resort from the club. Then direct would not be real happy either.

 

[BillPA]

They don't have anything to sell but the Poly or Hawaii. I'm sure their paychecks are minimal now, and will say anything to get you to pay the current crazy prices.

 

[disneynutz]

Pretty slimy for Disney employees to keep repeating false info just to make a sale.

Bill

 

[Missyrose]

It's an overused lie perpetuated by desperate salespeople. The flip side to that type of restriction is the effect on non-restrcted contracts. If resale points are restricted to their home resorts, it becomes virtually impossible for direct buyers to change resorts at seven months out.

 

[miTnosnhoJ]

Disney can change the rules, and they did change the rules a lot in the early years of DVC, as they experimented with what would work best. But it would be very unlikely that they would make a change like this. It would upset the whole economy of DVC, and would likely cause such an outcry that it would affect sales.

 

[Dean]

Legally and contractually they can't make this change as I read the info.

 

[michelleiada]

I don't see them being able to make further restrictions without making the resale market plummet. And as someone previously stated, why would you want to buy somthing so pricy without knowing you could sell it? Unless Disney plans to excercise ROFR on every contract... It would also make using points for other resorts very difficult for everyone.

 

[Dean]

I don't see them being able to make further restrictions without making the resale market plummet. And as someone previously stated, why would you want to buy somthing so pricy without knowing you could sell it? Unless Disney plans to excercise ROFR on every contract... It would also make using points for other resorts very difficult for everyone.

They don't care about the resale price per se but rather the ability to sell the retail points. Their ideal situation would be no ability to resell but robust retail sales. The idea that most people are going to research and make an informed decisions taking into account all parameters including an exist strategy and resale value is incorrect. Some will do that but most won't. Certainly all of us here that are owners either knew or should have know such changes could happen and we bought anyway. In 2011 DVD declared there would be 2 class of owners but how many here bought after that knowing that situation and the climate of DVD/DVC's approach.

 

[Matty B13]

They don't care about the resale price per se but rather the ability to sell the retail points. Their ideal situation would be no ability to resell but robust retail sales. The idea that most people are going to research and make an informed decisions taking into account all parameters including an exist strategy and resale value is incorrect. Some will do that but most won't. Certainly all of us here that are owners either knew or should have know such changes could happen and we bought anyway. In 2011 DVD declared there would be 2 class of owners but how many here bought after that knowing that situation and the climate of DVD/DVC's approach.

I think the DVC sales people like robust retail sales, but I'm sure management wouldn't be to happy if people who wanted to sell and there was no third party market to sell in just stopped paying MF and walked away from their contract. This would cost DVC a lot of money to foreclose and then sell again. Third party market provides DVC with new happy owners who don't mind paying MF and possibly new direct sales as well.

 

[Dean]

I think the DVC sales people like robust retail sales, but I'm sure management wouldn't be to happy if people who wanted to sell and there was no third party market to sell in just stopped paying MF and walked away from their contract. This would cost DVC a lot of money to foreclose and then sell again. Third party market provides DVC with new happy owners who don't mind paying MF and possibly new direct sales as well.

If people walk away then they would foreclose. They can actually do it administratively now rather than legally if I understand it correctly. The harmed party would get the asset if there's a mortgage, if not, it'd go back to DVC/DVD and they could resell like it was new. From their standpoint that'd be perfect as long as they can sell it. Where this breaks down is for the $1 timeshares where they can't sell fast enough to keep up with the contracts they might get back. A foreclose isn't a big deal when you've got the infrastructure in place to handle it. It would affect you and I a little or a lot depending since the resort must be paid for by the members. If one doesn't pay and no one takes responsibility for that contract, they just divide the costs among a smaller group of owners where we're effectively paying for those that didn't. Of course there would be some rental income that offset the costs in some cases.

 

[Matty B13]

If people walk away then they would foreclose. They can actually do it administratively now rather than legally if I understand it correctly. The harmed party would get the asset if there's a mortgage, if not, it'd go back to DVC/DVD and they could resell like it was new. From their standpoint that'd be perfect as long as they can sell it. Where this breaks down is for the $1 timeshares where they can't sell fast enough to keep up with the contracts they might get back. A foreclose isn't a big deal when you've got the infrastructure in place to handle it. It would affect you and I a little or a lot depending since the resort must be paid for by the members. If one doesn't pay and no one takes responsibility for that contract, they just divide the costs among a smaller group of owners where we're effectively paying for those that didn't. Of course there would be some rental income that offset the costs in some cases.

That is good to know about the administrative foreclosure, that makes it a lot cheaper for DVC. Glad someone is reading that contract....

I just wonder how long they could keep that up at say VGF, we just bought resale there after the original owners had it for two years with loaded points for $145 pp which I guess is what they paid for it. They probably realized they made a big mistake after their first DVC stay and wanted out. If this happens say 10% of the time that would probably cause MF to go up substantially, and then snowball for the other owners wanting to get out of a high MF resort.

 

[Dean]

That is good to know about the administrative foreclosure, that makes it a lot cheaper for DVC. Glad someone is reading that contract....

I just wonder how long they could keep that up at say VGF, we just bought resale there after the original owners had it for two years with loaded points for $145 pp which I guess is what they paid for it. They probably realized they made a big mistake after their first DVC stay and wanted out. If this happens say 10% of the time that would probably cause MF to go up substantially, and then snowball for the other owners wanting to get out of a high MF resort.

For a high demand option like VGF DVD/DVC would make money and the cost to the owners would be little. Once it's foreclosed the entity is then responsible for the fees, they don't go unpaid at that point. This is a major problem for seasonal and low demand resorts where it's often more expensive to own by far than to get some other way. DVC HH would be that way to some degree if were a stand alone resort.

 

[Dean]

I'd add, this is a MAJOR problem for resorts that only require you to pay if you use the week. I read a timesharing today article a couple of years ago about a resort in Canada that had that situation and the fees per used week was up to something like $20K. Now it seemed the owner/developer was purposefully trying to push the owners out IIRC but it still illustrates the extreme possibility.

 

[Matty B13]

$20k wow..... I'm sure the accountant who sent those bills knew it was the end of that resort.

I guess the best advice is still to buy were you want to stay, since you have a legal deed there at least.

 

[miTnosnhoJ]

I think the DVC sales people like robust retail sales, but I'm sure management wouldn't be to happy if people who wanted to sell and there was no third party market to sell in just stopped paying MF and walked away from their contract. This would cost DVC a lot of money to foreclose and then sell again. Third party market provides DVC with new happy owners who don't mind paying MF and possibly new direct sales as well.

The quote is attributed to me, but it is not mine.

 

[Dean]

$20k wow..... I'm sure the accountant who sent those bills knew it was the end of that resort.

I guess the best advice is still to buy were you want to stay, since you have a legal deed there at least.

IMO with DVC you don't have a lot of legal protection unless you buy and use a fixed week with DVC but then again you don't with any timeshares. IMO the buy where you want to stay recommendation is appropriate for only a small % of very educated owners with DVC and in the rest of the timeshare world varies so much that it's hard to give a generalization. With Bluegreen it makes sense rarely, with Wyndham it makes sense in some cases depending on what you're actually buying into. With Wyndham it's more about buying where the dues are cheaper than where one wants to stay. With Marriott Trust points it makes zero difference. With Marriott weeks it can be a great plan or a horrible plan depending, for high demand resorts and times it can be worth it, for other situations it might be a poor choice. For example, buying into an Orlando Marriott is often a poor choice if one wants to stay there unless it's a 3 BR and one needs a 3 BR. It can be a very good choice for exchanging depending on the price, esp for Grande Vista.

 

[sndral]

I lump comments made by DVC timeshare salespersons in with statements made by any salesperson, unless their statements/promises/predictions are in writing they are worthless. This particular 'warning' pops up occasionally, usually when DVC direct sales are lagging.
Mathematically what happens now is that 100% of the points not used by home resort owners get thrown into the anybody can use them pool at 7 months. If DVC decided to restrict resale buyers to only booking home resort their points couldn't be thrown into the anybody can use them 7 month pool - ever, thus those points wouldn't be available to direct buyers to use, ever.
If someone owned Poly direct but wanted a 2 br. somewhere else - their chance of getting that just went down. Bought Poly direct and decided to take a trip last minute - sorry, SSR has empty villas at 6 months and Poly is booked, but you can't touch those SSR villas because the points are resale points and aren't available to non home resort owners.
The deed sets forth that you are part of a club and my take on it when I read it several years ago was that short of removing the entire resort from the club they couldn't create a sub class of owners w/in the club. I'm too lazy to pull out the deed/contract and reread it, but, DVC sold a deeded real estate interest and much as DVC salespeople might desire more ammo. to spur sales of the Poly & Aulani, DVC can't rewrite the deed/contract nunc pro tunc.