Future member - question on annual dues

[kinghenry]

We are looking into purchasing at BCV when it goes on sale and are trying to learn about how the fees work. Our guide sent us the product understanding checklist which states:

"Each member pays Annual Dues on a calendar year basis, which include real estate taxes. Annual Dues (except for replacement reserves and real property taxes), cannot by law be increased by more than 15% from the preceding year..."

We have a couple of questions which we are hoping you could help us with:

1. Am I interpreting this statement correctly that replacement reserves are not limited to the 15% annual increase? In what cases would replacement reserves be charged?

2. Have any of the current DVC resort had any major maintenance yet? How did this affect the dues?

3. Would a major maintenance (such as roof, carpet, plumbing replacement) be billed all in the year it is done, or spread out over several years?

Sorry for all of the questions. Any insight you can give us would be appreciated.

Thanks.

-Tom.

 

[drusba]

Annual dues range from about $3.20 a point to $4 a point depending on resort. That covers regular operating and maintenance expenses, reserves, and property taxes. They have risen on average about 2% to 3% per year, some years higher, some years there have even been decreases. The reserves cover expected replacement of major components like roofs which usually last a lot of years. They build the reserves by annual charges until they are neeeded for that major repair. The 15% limit rule is a statutory annual maximum which does not apply to reserves or property taxes. Understand that is just a legal maximum and not expected reality. The reserves they create and accumulate per year are generally sufficient for expected long term repairs. The only possible risk of paying a reserve amount in one year that is in excess of a 15% increase would be if they mistakenly under reserved and then realized later they had done so, and from the numbers I see yearly they are not guilty of under reserving. OKW and BWV have had major repair and refurbishment periods since they opened (all Disney resorts go through them about every 5 years or so and it is currently going on at BWV) and those usually take place over a year or more period (the resort is done on a rolling basis). Those repairs and refurbishments have not had any noticeable swing effect on the annual dues. A roof replacement would likely be done over a period of a year to two and, of course, when it is done, the built up reserves should likely cover that.

 

[PamOKW]

Disney is very good at estimating the reserves budget. To give you an idea of how dues have increased (and even decreased), here's a look at the dues for OKW from 1993 to 2002.

1993 - 2.5629
1994 - 2.6986
1995 - 2.8393
1996 - 2.9883
1997 - 3.1448
1998 - 3.1743
1999 - 3.164
2000 - 3.1623
2001 - 3.1272
2002 - 3.2163

 

[kinghenry]

Thanks for the responses. This is very helpful!


-Tom.

 

[hoosiergirl]

Does anyone know why Vero's dues are the highest--is it because it's the smallest so there are less members with which to share the "wealth" ? I'm sure there's a logical reason, just was wonderin'......

 

[Granny]

kinghenry...the 15% dues increase annual cap worried me too when I was looking into buying.

What put my mind at ease was the explanation that, by law, DVD cannot make a profit on the dues. So we don't have to worry that they will jack up the dues to cover a profit target for DVD. They can't do that.