DVC Resale Family Sale

[RuneSpyder]

I have an opportunity to purchase 2 separate contracts from a family member for what is probably way below market value. They aren't in distress or anything, they are just wanting me to have a good deal.

It is 144 points and another 100 points on an add-on contract for AKL. Use year is October, 2015 and 2016 are currently at 0 points available. I'm assuming this means points will not be available until 2017?

The sale price is probably 1/2 of what the current market value is not including fees, closing costs,etc. There are no loans involved, the DVC plan is already paid off and I'd be paying cash.

I'm assuming there is no way Disney would allow this sale, even though it is private?

 

[lovin'fl]

It will still have to go through ROFR and they'd likely grab it.

 

[kniquy]

Could they add you onto the deed and then possible remove their names at a later date? Still have the monetary transaction that you guys agree upon. If it is between family members there should be away for it to avoid disney possibly taking it back. Could it be gifted to you? I am sure that there is someone on here with more legal/real estate back ground who could make some suggestions

 

[lovin'fl]

Not legal and if discovered could be a problem. But I don't know the ins and outs. Family members can GIFT a contract and DVC will not ROFR that but it has to be a free gift and if discovered there was a monetary exchange...

 

[RuneSpyder]

Thanks for the tips. Keeping it legal would be a priority for sure.

 

[intertile]

Thanks for the tips. Keeping it legal would be a priority for sure.

Grey area....dvc could be a gift, while something else,say a pen could have a huge monetary value....

 

[JimMIA]

I would call DVC Member Admin (not MS) and ask them. I believe they handle transfers between family members differently from regular resales. I've never done it myself, but I've seen some comments to that effect on several threads over the years.

 

[Dean]

Could they add you onto the deed and then possible remove their names at a later date? Still have the monetary transaction that you guys agree upon. If it is between family members there should be away for it to avoid disney possibly taking it back. Could it be gifted to you? I am sure that there is someone on here with more legal/real estate back ground who could make some suggestions

This might be a gray area, IMO part of the issue is going to be how much time lapses between the 2 changes. The other issue is one will have to disclose whether it's for pay or gratis. One question is whether technically they could take it under ROFR if adding or removing names if there's a fee and I suspect they could but they might not. I guess one could do delayed payments like in a few years if they wanted and write that into the contract including that it could not be paid early if the seller were so inclined. It might be possible to get creative and stay legal but it's going to be difficult. I guess one could try it and write in the contract that the seller has the right to cancel if it's taken ROFR. Also it's possible that any pending reservations will be canceled in this situation upon the "transfer".

Grey area....dvc could be a gift, while something else,say a pen could have a huge monetary value....

This would be considered Fraud and is criminally illegal in FL and all states I know of. Also, adding in terms that could not be matched by DVC is not likely to be an option either though would not be illegal. They'd just ask you to put a value on the other items for purposes of ROFR and that value would need to be market reasonable. I've seen this issue discussed a number of times and I'm not the only one that I recall seeing that's actually done it (I was trading another timeshare for DVC points). DVD asked for a value on the other timeshare and the DVC points. I considered pushing it and saying not but I felt the deal was a good one for me and fair for the other party so we put a reasonable value on each that was the same and was clearly high enough that ROFR would to be an issue.

 

[supersnoop]

Grey area....dvc could be a gift, while something else,say a pen could have a huge monetary value....

Substance over form. Just because you pretend to structure it that way doesn't make it true from a legal perspective.

 

[mustinjourney]

What if I want to sell or give the points to a friend or relative?
In the case of gratiuitous transfers (no money involved) or a sale to an immediate relative, Disney Vacation Club has been known to immediately waive its Right of First Refusal. Contact Disney Vacation Club for guideance on this process.

The legal transfer of ownership must still occur. Those unfamiliar with the process may wish to seek legal assistance.

http://dvcnews.com/index.php/dvc-program/selling-dvc-39393

 

[mustinjourney]

couldn't you always write up the contract for market value and send that for ROFR? Once it goes through, there's nothing stopping your family member from "forgiving" some of the debt and essentially making a gift to you. Further, so long as the forgiven amount is less than $14,000 (assuming you're single), then there is no gift tax owed by the giftor either.

Theoretically, this scenario could run the risk of the family member trying to enforce the full value of the contract -- but given your circumstances, I'm assuming this is a low risk.

With all that said, I would have to presume that there is a way to do this in an easier manner. There's plenty of contracts I've seen on the OCC that listed consideration at like $10 for the transfer (these were usually in instances of transfers to a family trust or the like), so there is likely some sort of mechanism for this to work.

 

[sndral]

I have an opportunity to purchase 2 separate contracts from a family member for what is probably way below market value. They aren't in distress or anything, they are just wanting me to have a good deal.

It is 144 points and another 100 points on an add-on contract for AKL. Use year is October, 2015 and 2016 are currently at 0 points available. I'm assuming this means points will not be available until 2017?

The sale price is probably 1/2 of what the current market value is not including fees, closing costs,etc. There are no loans involved, the DVC plan is already paid off and I'd be paying cash.

I'm assuming there is no way Disney would allow this sale, even though it is private?

First available points would be October 1, 2017 - so over a year away. That could work in your favor as Disney may not want to sit on those points for that long. I suspect that they are also are a bit less likely to grab AKV points. But a really low price could be ROFR'ed by Disney.
You, of course, if you buy the contracts could borrow those points for use for stays from Oct. 1, 2016 - Sept. 30, 2017, if you wanted to.
Check the ROFR to thread to get a sense of what's getting through ROFR.

 

[Dean]

couldn't you always write up the contract for market value and send that for ROFR? Once it goes through, there's nothing stopping your family member from "forgiving" some of the debt and essentially making a gift to you. Further, so long as the forgiven amount is less than $14,000 (assuming you're single), then there is no gift tax owed by the giftor either.

Theoretically, this scenario could run the risk of the family member trying to enforce the full value of the contract -- but given your circumstances, I'm assuming this is a low risk.

With all that said, I would have to presume that there is a way to do this in an easier manner. There's plenty of contracts I've seen on the OCC that listed consideration at like $10 for the transfer (these were usually in instances of transfers to a family trust or the like), so there is likely some sort of mechanism for this to work.

Correct but if done purposefully, it's illegal as in fraud.

 

[Dean]

What if I want to sell or give the points to a friend or relative?
In the case of gratiuitous transfers (no money involved) or a sale to an immediate relative, Disney Vacation Club has been known to immediately waive its Right of First Refusal. Contact Disney Vacation Club for guideance on this process.

The legal transfer of ownership must still occur. Those unfamiliar with the process may wish to seek legal assistance.

http://dvcnews.com/index.php/dvc-program/selling-dvc-39393

I am not aware of an instance of them taking under ROFR for a gift though I am not aware of such a situation to a friend who's not a family member outside of it being done by a will. I am not aware of a single example of a sale to family member for well under market value to know for certain how it would be handled.

 

[JimMIA]

couldn't you always write up the contract for market value and send that for ROFR? Once it goes through, there's nothing stopping your family member from "forgiving" some of the debt and essentially making a gift to you. Further, so long as the forgiven amount is less than $14,000 (assuming you're single), then there is no gift tax owed by the giftor either.

As Dean said, that would be a material misrepresentation of the terms of the contract with the intent to deceive DVC...which is fraud.

There's plenty of contracts I've seen on the OCC that listed consideration at like $10 for the transfer (these were usually in instances of transfers to a family trust or the like), so there is likely some sort of mechanism for this to work.

Naw...that's just the normal way of expressing the value of something legally -- and it's "$10 and other considerations," with the other considerations being the real selling price.

But your previous post about how Disney handles family transactions is correct, I believe. As I said above, OP should cut to the chase and just call Member Admin and ask them how best to proceed.

 

[supersnoop]

couldn't you always write up the contract for market value and send that for ROFR? Once it goes through, there's nothing stopping your family member from "forgiving" some of the debt and essentially making a gift to you. Further, so long as the forgiven amount is less than $14,000 (assuming you're single), then there is no gift tax owed by the giftor either.

Theoretically, this scenario could run the risk of the family member trying to enforce the full value of the contract -- but given your circumstances, I'm assuming this is a low risk.

With all that said, I would have to presume that there is a way to do this in an easier manner. There's plenty of contracts I've seen on the OCC that listed consideration at like $10 for the transfer (these were usually in instances of transfers to a family trust or the like), so there is likely some sort of mechanism for this to work.

Correct but if done purposefully, it's illegal as in fraud.

I imagine you could write the contract as "a gift in the amount of $xx,xxx and cash in the amount of $xx,xxx." You'd have to assign a value to the gift and Disney could take it by paying the full value. Hiding the gift in a separate transaction would be fraud, but being up front about should be within the terms of your contract. Of course, it might also make the owner realize how much equity he's giving away and change his mind.

 

[rg35]

I would just do the family transaction transfer and pay your family member "under the table."

Maybe it's illegal, but who cares? Don't go advertising your personal business, and nobody will find out. There seems to be absolutely nothing to be worried about here as far as getting caught.

 

[Dean]

I would just do the family transaction transfer and pay your family member "under the table."

Maybe it's illegal, but who cares? Don't go advertising your personal business, and nobody will find out. There seems to be absolutely nothing to be worried about here as far as getting caught.

I would hope every cares about dishonest people doing dishonest things. It is this black and white.

 

[RuneSpyder]

Thanks everyone for the good advice. It looks like they borrowed points from October 2016 use year. That would mean October 2017 points aren't available until October 2017, right? I think they got into a cycle of always borrowing from the next year points because they went 2x in one year or something like that. So now they are stuck in a cycle of always borrowing from the next year instead of taking a year off?

I think what we are going to do is instead of me buying anything, I am just going to be added to the deed / membership. We've stopped discussing purchasing.

 

[JimMIA]

Thanks everyone for the good advice. It looks like they borrowed points from October 2016 use year. That would mean October 2017 points aren't available until October 2017, right?

October 2017 points could be used for stays from 10/1/2017 through 9/30/2018. However, you could borrow those points into your 2016 UY and be able to use them 10/1/2016-9/30/2017.