How did OKW extension work?

[ProudMommyof2]

We are considering a HHI contract. I assume, eventually, an extension on the 2042 termination will be offered as it has been for OKW. Is that correct?

How did that work? How much was it? Just trying to anticipate.

 

[spruce]

I wouldn't assume that. Okw offered a pay now 15 year extention that I wouldn't realize the first year of benefit from until I was 82.
The cost was $15 per point, then and still is $25 a point. Some have reported that not many bought and others have still not completed the rejected offer paperwork. We rejected after the deadline to reject.
There has been much speculation about other extentions, what happens at Okw to the rooms not extended and could dvd legally do an extention and penalize owners that didn't respond. My quit claim is in so I am out but some think the extension will be free since the condo documents represent a land lease which extended applies to their ownership.

 

[Deb & Bill]

We are considering a HHI contract. I assume, eventually, an extension on the 2042 termination will be offered as it has been for OKW. Is that correct?

How did that work? How much was it? Just trying to anticipate.

We did not choose to extend because I would have been 91 before I could have used the extension. So it was worthless to us.

Now DVC has extended and non-extended owners at OKW. So when 2042 hits, what do they do? Do they renovate the 2042 owned units to go forward another 15 years or do they tear them down and start over, leaving the 2057 units another 15 years?

All DVC did was create a big problem for Feb 1, 2042. Unless they can buy back all the 2042 points before that date.

So, if DVC does decide to extend contracts, they are going to have to be a lot smarter about how they do it. They thought the OKW extension was going to be a slamdunk.

 

[JimMIA]

I'll give you an example to illustrate the math that we faced when the extension was offered...and why so few of us took it.

When the extension was offered, we owned a 320 point OKW contract. In order to extend, we would have paid $4,800 for 15 years of extra points that we would not see until 2042.

Regardless of your age, if you wanted to put an additional $4,800 into DVC, would you want your points to start in 2042? Or would you buy fewer points that would be available right away?

We had no interest in adding on anyway, so we declined. But if we had wanted to add on, I would have bought a smaller non-extended contract.

I personally think the extension was someone's supposed brainstorm which in fact turned out to be a brain gastric disturbance.

 

[OKW Lover]

The PP's have made good points. I'd like to put a different spin on it. I did extend my OKW contract. Not for me, I'll likely expire before the original contract date, but for my children and grandchildren. Remember that DVC is a real estate interest and ail transfer to your heirs. In effect, we are giving our heirs an extra 15 years of magic to enjoy while they (hopefully) fondly remember us.

 

[Deb & Bill]

But with member fees in the double or triple digits by 2042 per point, I don't plan to saddle my son with our OKW points.

 

[OKW Lover]

But with member fees in the double or triple digits by 2042 per point, I don't plan to saddle my son with our OKW points.

I figure that if my heirs don't want to make the MF payments they can always sell or rent them out. Its still a plus for them.

 

[Breyean]

I figure that if my heirs don't want to make the MF payments they can always sell or rent them out. Its still a plus for them.

Our son was 8 when we bought OKW in 1993.

When they announced the extension my wife and I knew it wasn't going to serve the two of us because by then...

Our son decided he loved OKW so much and wanted it for his kids and theirs, at least for as long as possible, that he paid for the extension.

A few years later when we decided we wanted VGC points since we had moved west, he split the buy in costs for our points there as well.

 

[amcnj]

I figure that if my heirs don't want to make the MF payments they can always sell or rent them out. Its still a plus for them.

That's true, hopefully renting the points would still be more than the dues 15 years out, so they would have that option too.

 

[jerseyduke]

I figure that if my heirs don't want to make the MF payments they can always sell or rent them out. Its still a plus for them.

Those fees had better still be in about the same proportions to the average income as they are today, otherwise, just about everyone is going to have a lot bigger problems then maintenance fees.

OP, I would not count on extensions. I think DVD is going to have a serious mess in 2042 with OKW

 

[wdrl]

I think DVD is going to have a serious mess in 2042 with OKW

I don't think it will be as bad as some people think it will be. To my knowledge, DVD has never reported how many OKW points were extended. But some people have reported about a third of the points were extended to 2057. If a third of the owners thought it was beneficial to extend their deeds in 2008, then I suspect an even greater percentage of OKW owners will opt to extend if offered the chance in 2030 or 2035. Come January 31, 2042, it would not surprise me if a large majority of the OKW points have already been extended to 2057.

 

[jerseyduke]

I don't think it will be as bad as some people think it will be. To my knowledge, DVD has never reported how many OKW points were extended. But some people have reported about a third of the points were extended to 2057. If a third of the owners thought it was beneficial to extend their deeds in 2008, then I suspect an even greater percentage of OKW owners will opt to extend if offered the chance in 2030 or 2035. Come January 31, 2042, it would not surprise me if a large majority of the OKW points have already been extended to 2057.

Is keeping enough units available to cover the active points enough? Do they have to have a certain number of each type?

Basically, if it is 1/3 of the points extended, can they bulldoze the other 2/3 of the resort?

(Or if the Poly goes as is rumored, heck the buildings will only be 50 years old, paint them and resell them as is)

 

[OKW Lover]

Is keeping enough units available to cover the active points enough? Do they have to have a certain number of each type?

Basically, if it is 1/3 of the points extended, can they bulldoze the other 2/3 of the resort?

(Or if the Poly goes as is rumored, heck the buildings will only be 50 years old, paint them and resell them as is)

In addition to keeping the number of units needed to cover the active points, they also need to maintain the same amenities (ie pool, etc) specified in the Membership Agreement.

From a legal standpoint, I'm not sure if they have to keep the same buildings but I understand that we each own a percentage of a specific building at OKW. So, could they tear down a building that I own a piece of before the extended expiration of my contract?

 

[wdrl]

So, could they tear down a building that I own a piece of before the extended expiration of my contract?

No, DVC could not remove a Unit from the Condominium Association without removing all points associated with that Unit from the Condominium Association. At OKW, if a person owns a deed that shows a real estate interest in Unit 35, then those underlying points are represented by Building 35. If Building 35 is removed from the OKW Condominium Association, then everyone who owns points in Unit 35 will lose those points.

 

[OKW Lover]

No, DVC could not remove a Unit from the Condominium Association without removing all points associated with that Unit from the Condominium Association. At OKW, if a person owns a deed that shows a real estate interest in Unit 35, then those underlying points are represented by Building 35. If Building 35 is removed from the OKW Condominium Association, then everyone who owns points in Unit 35 will lose those points.

Ah, OK. So effectively that probably blocks them from tearing down any of the buildings after 2042. That's based on the assumption that at least one of the owners in each of the buildings did extend their contract, of course.

 

[RobDoc]

.... Come January 31, 2042, it would not surprise me if a large majority of the OKW points have already been extended to 2057.

All of the contracts were extended once the DVC/DVD Boards voted back in September, 2007 so nothing else needs to be done on January 31, 2042. Every contract for OKW sold by DVD since that vote in 2007 are extended contracts along with a small number of resale contracts where the owners paid for the extension before selling.

At the time the first extended resale contracts were appearing for sale, the difference in extended vs non-extended was well below the $15 paid by those owners - many were listed with only a $5 per point difference over non-extended contracts.

The wording in the legal documents stated that a lien would be placed on the ownership of any owners who did not either extend or sign the quit-claim - however we have never seen any complaint that anyone has had a lien placed on their membership. There have been a few reports from members stating they never signed the quit-claim or accepted the extension.

Basically, DVD/DVC extended the OKW contracts an additional 15 years fifteen years after the resort originally opened (not 15 years to the day, but close enough for this discussion). At that time, OKW was the only DVC resort where original buyers truly received 50 years of use - and even there, only those who purchase prior to January 31, 1992. (The resort opened on October 1, 1991 as the Disney Vacation Club Resort.) With the opening of SSR, early buyers (and only the early buyers) once again received a full 50 years of ownership. Every new DVC resort since SSR has used the same expiration forumla offering 50 years to those who purchased early in the lifetime of the resort as the expiration clock starts ticking immediately unless a different methodology is offered to extend contracts.

If a similar timeline were to be used for other DVC resorts, Vero would have been offered an extension in 2010, HH and BWV in 2011 with extensions ending January 31, 2060 and 2061 respectively. The next extension using that timetable would be VWL in 2015 and BCV in 2017 with extensions for 2065 and 2067.

Stay tuned!

 

[jerseyduke]

No, DVC could not remove a Unit from the Condominium Association without removing all points associated with that Unit from the Condominium Association. At OKW, if a person owns a deed that shows a real estate interest in Unit 35, then those underlying points are represented by Building 35. If Building 35 is removed from the OKW Condominium Association, then everyone who owns points in Unit 35 will lose those points.

Interesting, I was wondering about that, if the deed was that specific (I probably should have assumed it had to be, in case one unit is damaged and others are not,etc)

I guess they will just put the rooms in the cash pool, and nothing will be a problem in 2042

 

[crisi]

"How did the OKW extension work?"

Not well.

I would not assume that Disney will try it again with any other resort. They may - they may not. If they do, I'd expect to to be much closer to the end of the contract. And I'd think that they might not offer it at all resorts - HHI would be an easy resort for Disney to let the contracts expire and sell the property to another timeshare company.

 

[kirstenb1]

The PP's have made good points. I'd like to put a different spin on it. I did extend my OKW contract. Not for me, I'll likely expire before the original contract date, but for my children and grandchildren. Remember that DVC is a real estate interest and ail transfer to your heirs. In effect, we are giving our heirs an extra 15 years of magic to enjoy while they (hopefully) fondly remember us.

We did the same thing. We'll be in our 70's by then, hopefully it will give the kids a nice vacation.

 

[wdrl]

All of the contracts were extended once the DVC/DVD Boards voted back in September, 2007 so nothing else needs to be done on January 31, 2042. Every contract for OKW sold by DVD since that vote in 2007 are extended contracts along with a small number of resale contracts where the owners paid for the extension before selling.

You're right. All points are extended to 2057. What I meant to say is that a large majority of the OKW owners will probably have extended their deeds by the time the original expiration in January 2042.