DVC's Old Key West Extension Ordeal

[g.armor]

Anyone buying OKW direct from DVC automatically gets the extended contract since any OKW points recovered by DVD (foreclosure, ROFR) will either already have the paid extension or DVD already owns the extension themselves so every direct OKW contract sold the buyer has paid for the extension.

...

DVDs problem as I see it, is that on 2/1/2042 they will own a 50+ year-old
resort that is partially sold out so they can't just up and close it/tear down/rebuild. My belief is that the recent ROFR activity for OKW resales has gotten rid of some of the unsold extensions and is a major part of the "wildly successful" status reported by some guides.

Please help this ignorant newcomer.
1) Pleae explain ROFR. I know it stands for Right of First Refusal, but what does that actually entail as pertains to DVC?
2) What is DVD?
3) Why do we think they might close or tear down a resort? Is there historical evidence to support that happening? Wouldn't they just "keep it up" through refurbs and upgrades just like they do the parks?

Thank you!

 

[tjkraz]

Please help this ignorant newcomer.
1) Pleae explain ROFR. I know it stands for Right of First Refusal, but what does that actually entail as pertains to DVC?

Anytime an owner agrees to sell a contract to a third party, Disney can opt to purchase it at the agreed-upon terms.

Example: you and I reach an agreement to sell you my contract for $1000. That agreement must be submitted to Disney for their review. If they think the terms are particularly advantageous, they will take it at the agreed-upon price.

As the seller, I still get my money. It comes from Disney instead of you.

As the potential buyer, you get nothing. There is no financial loss on your part, but you do have to start all over again if you still wish to buy.

ROFR is a way for Disney to exert some price controls over the resale market.

2) What is DVD?

Disney Vacation Development.

Technically DVD is the developer...the entity which builds and sells timeshares.

DVC--Disney Vacation Club--is the timeshare manager. They oversee day-to-day operations of the timeshare program which includes accepting reservations, tracking point usages, setting budgets, billing annual dues, etc.

Ultimately Disney controls both entities and "DVC" is typically used as a blanket term for the entire operation. But in reality there are two legal entities which play different roles.

3) Why do we think they might close or tear down a resort? Is there historical evidence to support that happening? Wouldn't they just "keep it up" through refurbs and upgrades just like they do the parks?

There is no historical precedent either way. Old Key West is the...oldest...DVC resort at approx 22 yrs. But thanks to the 2057 contract extension, it's still 44 years away from totally reverting back to Disney ownership. In other words, the buildings we see today are only 1/3 of the way through their lifespan. What will they look like in another 44 years?

We can assume that Disney would eventually like to re-sell each DVC location to new owners as they reclaim ownership. But come 2042 or 2057, will buyers be comfortable spending tens-of-thousands of dollars on a 50-year commitment in a building that's already 50-65 years old?

Timeshares have proven to be very profitable for Disney. It's not too big of a stretch to think that they will be open to bulldozing and re-building resorts into state-of-the-art facilities as contracts expire.

But it's going to about 28 more years before Disney gives any firm indication of their plans.

 

[g.armor]

What is the OCC website?

 

[g.armor]

Tim, thank you very much! Very helpful!

 

[BEASLYBOO]

I am interest to know if any other OKW owners have this happen to them. We bought in 92. We declined the offer to extend and sent the notarized form back. Now, every time we check into any DVC resort we get a letter offer to extend our contract to 2057. How many times to we have to say no? Are we alone in this?

No, I passed when they sent the $15 dollar offer and haven't heard a word about it since!

In 2042 I will be 80, at that point, it will be time for my son to suck up the cost of a Disney resort and treat me to a vacation!

 

[BEASLYBOO]

Timeshares have proven to be very profitable for Disney. It's not too big of a stretch to think that they will be open to bulldozing and re-building resorts into state-of-the-art facilities as contracts expire.

And as it was the 1st and the one with the largest living space, they would then be able to re-build on the smaller scale like they do now, compact!

 

[Shamus]

What is the OCC website?

OCC = Orange County Comptroller

http://www.occompt.com/

Amongst the many interesting legal filings you can find on this site are all the individual real estate deed transactions for the WDW DVC Units.

 

[mrsR123]

My curiosity is in finding those who owned OKW before the extension but haven't extended and haven't signed off on the paperwork. What type of issues are they having (or not) and what type of communication are they having from DVD.

Since this thread is back from the dead, I thought I'd answer. I never signed off. We were sent a couple of reminders at the time. Since then, we get a voice mail or a note at the front desk from DVC when we're on property, but I've never bothered to follow up. I suppose this makes me at least a slacker and possibly a scofflaw.

 

[Dean]

Since this thread is back from the dead, I thought I'd answer. I never signed off. We were sent a couple of reminders at the time. Since then, we get a voice mail or a note at the front desk from DVC when we're on property, but I've never bothered to follow up. I suppose this makes me at least a slacker and possibly a scofflaw.

No, it makes you my hero. Had I still owned OKW I would purposefully not have signed. It is my opinion that the expiration is tied to the land lease and that they don't have the authority to levy a special assessment or tie up the membership. It will be interesting though what happens as the expiration draws near for those in your situation because I think legally you would actually have the extension for free. The question is whether they try to be the 600# gorilla and overstep their legal bounds and whether anyone has the commitment to fight it at the time. My quarrel is with HOW they tried to do this, not with the underlying intent.

 

[DVC92]

I do know that at least one OKW owner did get a concession from DVC that payment into the Capital Reserve fund (for all owners) will be curtailed at some point near the end so that owners without the extension are not contributing any more $$ into the fund for dates beyond 1/31/42. So, according to that, those who expire 1/31/42 will have lower dues at some point than those who own the extension.

That would be me. DVD has promised, in response to a complaint with the Florida Time Share Bureau, a subsidy for non-extenders with respect to the reserve component of the annual dues at the appropriate time in the future. I believe that should occur a lot sooner than near the end in 2042 since the annual Reserves budget shows dates for the length of time the various elements are supposed to last. When those dates extend beyond 2042, members who did not extend by returning the deeds should only be required to pay a percentage of the Reserve fund. Assuming such a subsidy actually happens and begins in 2020 for example, any member who hasn't returned the quitclaim deed legally has a termination date of 2057 in DVC's eyes and will not be entitled to the subsidy. Of course, DVD has never revealed this concession or how it will be implemented to the membership.

 

[mrsR123]

Wow, I had to read that like three times to understand it, but I think I've got it, now. So I suppose if I want an eventual break on my dues, I should sign the darned thing. I still have the originals.

Unless Dean is right in which case I'd be kicking myself!

 

[dianeschlicht]

Why would I want to extend my OKW contract when Florida and Disney may be under water (literally) in 2042.

Actually I will be 76 in 2042 and will not even know my name at that point let alone be able to book a trip to Disney...

Stephen

LOL! You have low esteem for those of us in the senior citizen realm! I'm still 10 years away from 76, but I don't intend to be incapacitated by then!

 

[Dean]

Wow, I had to read that like three times to understand it, but I think I've got it, now. So I suppose if I want an eventual break on my dues, I should sign the darned thing. I still have the originals.

Unless Dean is right in which case I'd be kicking myself!

I don't think it'll make much difference. My guess is they'll be putting pressure, and offering incentives, to those who have not signed.

 

[mouselike-harrier]

OCC = Orange County Comptroller

http://www.occompt.com/

Amongst the many interesting legal filings you can find on this site are all the individual real estate deed transactions for the WDW DVC Units.

Thank you for this link!

 

[CarolMN]

Wow, I had to read that like three times to understand it, but I think I've got it, now. So I suppose if I want an eventual break on my dues, I should sign the darned thing. I still have the originals.

Unless Dean is right in which case I'd be kicking myself!

I don't think it'll make much difference. My guess is they'll be putting pressure, and offering incentives, to those who have not signed.

IMO, no need to decide anytime soon, LOL.

Unless/Until they make it really uncomfortable for you - maybe locking your account or something like that (and so far it doesn't sound like they have), I'd wait until there's an opportunity to pay less dues to decide what to do.

 

[OneMoreTry]

I don't think it'll make much difference. My guess is they'll be putting pressure, and offering incentives, to those who have not signed.

That's a decision to be made in 2040 or so. If I'm alive and kicking and they offer a good deal, I'll extend -- or give one of my kids the opportunity if they want the points.

 

[Dean]

That's a decision to be made in 2040 or so. If I'm alive and kicking and they offer a good deal, I'll extend -- or give one of my kids the opportunity if they want the points.

Exactly, that was my intent, to say they'd put pressure late though likely a little before 2040.

IMO, no need to decide anytime soon, LOL.

Unless/Until they make it really uncomfortable for you - maybe locking your account or something like that (and so far it doesn't sound like they have), I'd wait until there's an opportunity to pay less dues to decide what to do.

Agreed. I don't see how they can legally defend locking the account in this situation. What they can, and likely will, do is to not give the fee breaks to those who haven't signed the last few years.

 

[bakerworld]

+ of being an 'older' buyer is the length of ownership isn't an issue - which makes me wonder if the reason DVD/DVC doesn't feel a 'need' to extend contract lengths because there are a lot of 'older' buyers.

 

[surbas]

Why would I want to extend my OKW contract when Florida and Disney may be under water (literally) in 2042.

Actually I will be 76 in 2042 and will not even know my name at that point let alone be able to book a trip to Disney...

Stephen

As someone pushing 70 with siblings in the 80s, I take exception to that statement. Assuming, of course, that you know your name now!

 

[motherof5]

I am interest to know if any other OKW owners have this happen to them. We bought in 92. We declined the offer to extend and sent the notarized form back. Now, every time we check into any DVC resort we get a letter offer to extend our contract to 2057. How many times to we have to say no? Are we alone in this?

I bought a resale OKW wish I could be offered the extension.