how to calculate dues/reimbursement for a resale

[disneyberry]

i found out more details about a resale i was considering for 150pts OKW Sept use year. anyway, the broker said that the buyer will be responsible for dues on the 150pts for the 2003 allocation.

what's the 2003 OKW rate for dues? the broker said the rate is $3.49/pt but is that the exact figure? i thought there's a few more decimal places.

also, i'm still confused about how dues are charged by the calendar year.
so, i need help w/ figuring out exactly how much those dues will be.
i think the broker also said that the seller wants to be reimbursed for any dues he/she already prepaid for the 2003 allocation. if i made an offer next week, how much would the reimbursement be?

anyway, i'm confused... please help!

 

[CarolMN]

Dues are negotiable - they can be paid by either the buyer or the seller. In the contract you are considering, apparently the seller wants the buyer to pay the dues. You don't have to offer what the seller is asking and the seller doesn't have to accept your offer.

Disney charges dues based on the calendar year. Members can choose to pay 1/12 of the dues on a monthly basis or they can pay them in a lump sum (due in January). We have an August use year and chose to pay in a lump sum. I consider the dues I paid in January 2003 to be for 7 months of 2002 points and 5 months of 2003 points.

To suggest a more "reasonable" way of splitting the dues, I'd have to know the status of the points. For example, if I were buying the contract (with a September use year) and there were no 2002 points available, but there was a full complement of 2003 points coming in September (none were borrowed into 2002), I would be willing to pay 4 months worth of the 2003 dues. I would expect the seller to pay the other 8 months.

That said, there a lot of factors to consider when you buy resale. You really have to look at the overall value of the whole contract. It may be a good deal (considering the other factors) to pay/reimburse the seller for the dues. Remember, it's all negotiable and the two parties both must agree before there is a deal. After that, it's up to Disney - it still has ROFR.

HTH a little.

 

[kem330]

At the very most you should be prorating the dues from date of purchase- after all you don't have ownership the full year. Disney prorates dues from date of purchase. Again as Carol says- it depends also on use year and points available. With a Sept use year, I 'd be inclined to pay dues from Sept- Dec. the time period you actually have use of them. Unless they have banked 02 points then more would be appropriate.

 

[disneyberry]

yes, there are no 2002 points left, and 150pts coming on 9/1/03.

Originally posted by CarolMN
Disney charges dues based on the calendar year. Members can choose to pay 1/12 of the dues on a monthly basis or they can pay them in a lump sum (due in January). We have an August use year and chose to pay in a lump sum. I consider the dues I paid in January 2003 to be for 7 months of 2002 points and 5 months of 2003 points.

is this technically how Disney breaks down the charges though? as 7mos 2002UY and 5mos 2003UY?
i.e. when you were charged in January 2003, was it technically for 1/1/03 through 12/31/03? or was it technically for 8/1/03 through 8/1/04? or was it technically for 8/1/02 through 8/1/03?
this is what i'm still confused about.

 

[FredS]

If you are getting the full quota of 2003 points then you pay dues for the full amount. These are paid for the calendar year, unrelated to your use year. Just because the seller "owned" the contract for part of the year (when they points weren't even available without borrowing and were not borrowed) doesn't affect that.

Allegedly this is negotiable, but the most important factor is the number of points each party has use of to determine the amount of maintenance fees "due" from each. NOT the date of the sale. I think most people pay for points which they get, e.g., one of my contracts was for 215 points, but 8 had been used for the calendar year in which I bought. I reimbursed seller for maintenance fees for the 207 points which I rec'd for that year.

 

[disneyberry]

well, i want to do it the most fair way possible. i don't want to take advantage of the seller, or have the seller take advantage of me. so, i want to negotiate the dues by DVD rules.

this is why i want to make sure i understand exactly how Disney charges dues.
i.e. what do the dues you are charged in January correspond to?
and in theory, each monthly payment is just 1/12 of that lump sum charge in January?

see my previous question in response to CarolMN. i'll go back and bold it.
hoping more answers are to come, so i can gain crystal clear understanding of this.

anyway, thanks to all so far for your feedback. i really appreciate it!
DVC can really get complex! i'll need all the help i can get to learn my around... if and when i ever become a member *sigh* (hopefully soon!)

 

[buzz5985]

I just recently closed on a resale 2/10 to be exact. HH, 150 points, December use year. There were 37 banked points from 2001, all 150 from 2002. I reasoned that maintenance fees are for the calendar year, not the use year, therefore, why should I pay 2002 maintenance fees, if I didn't have the opportunity to use it in 2002? The broker tried to "explain" the way it is done, but I told him in my mind it was pretty simple - I didn't use it in 2002, the seller did. I'm not paying. Plus if I had to pay closing costs and maintenance fees I would have been up to over $71/ point. The seller agreed to my bid. I also need to add that the seller seemed to be very motivated they were declaring bankruptcy.

 

[RobDoc]

yes, there are no 2002 points left, and 150pts coming on 9/1/03

IMO, you should pay dues only from 9/1/03 to 12/31/03. That would be 4 months or 1/3 of the annual dues for the year. The seller has already paid, or been responsible for the 2003 dues and has actually used the points for 2/3 of the year.

When we purchased HH presale in 1995, we did so as an add-on with a June use year to our original OKW contract. The HH resort opened in March, 1996 and we got our first allotment of points on June 1, 1996. We paid dues for that year on seven months of usage (June 1, 1996 - December 31, 1996). If we have purchased those same points on Sep. 1, 1996- we would have paid dues on 4 months.

In your case, the seller has apparently used all of the 2002 points. These points were for use between 9/1/02 and 8/31/03 and the 2003 dues covered those points from Jan 1, 2003 until 8/31/03. You don't have any use of those points- so why pay dues for the points you won't get to use.

By the same token- since you are talking about less than $400- you will need to assess whether that amount of money should be a point of contention in this sale. With all resales, I believe we need to look at the big picture and see what these changes will mean towards that end.

Since this is all negotiable, just run the numbers for the total purchase and see what works best for your budget.

Good Luck!

 

[Poorman]

This is how I did it,with the help of Alisbarc.
My contract was for 360 BWV points with 360 2001 points 336 banked 2002 points and all 2003 points. I offered $66.00 pp and I pay 2003 dues. I have a June year but I felt this didn't matter because I had all the points and could bank them to 2004 or rent them. The owner accepted the offer and here we are. In total about 7 weeks from offer to making ressies. This was just before all the ROFR stuff. And most of you know I have had 2 bought back by Disney,with the second one being thrown back at them at a higher price,if nothing else I will have cost Disney another $1000.00,or if I get it ,they cost me the same. I think I tend to agree with Dean now, that after this buying frenzy passes the prices will settle down. I sorta hope now that they do buy my 500 point contract back because it was no where near as good as my 360 pointer. It is actually costing me $6.00 pp more , still a good price but no bargain. Good luck Disneyberry. Rich

 

[Dean]

As Doc noted, the neutral reimbursement for a Sept use year with no 2002 points is 4 months of dues though I'm sure the broker and seller want you to pay the entire thing. You can use the Calendar year issue as a bargaining point but should look at the overall contract issues to decide if the total price is worth it or not. The dues paid In Jan were for 8 months of the 2002 use year and 4 months of the 2003 use year. This "you get the points you pay the dues" is either ignorance of deceipt on the part of the seller and broker. I know that's the way the brokers look at it but they do so because they don't understand how the system works and in most cases are accustomed to other timeshares where their stance is a correct one.

If one is paying monthly, that will need to be paid off by the seller before DVC will let the sale go through and I assume before they will give their OK on the ROFR.

 

[FredS]

Originally posted by Dean
This "you get the points you pay the dues" is either ignorance of deceipt on the part of the seller and broker. I know that's the way the brokers look at it but they do so because they don't understand how the system works.......

I think that this statement is unfair, and hope the original poster does not take it to heart. I think that it is perfectly reasonable to pay maintenance on the points which you receive. I am neither a seller, nor a broker, nor deceitful, nor "ignorant" (In my opinion) but feel that whomever gets to use the points should pay the dues. Since that seemed to be the norm when we were looking at resales it seems, according to your theory, that there are a tremendous number of ignorant, deceitful people out there.

 

[RobDoc]

Originally posted by FredS
I think that this statement is unfair, and hope the original poster does not take it to heart. I think that it is perfectly reasonable to pay maintenance on the points which you receive. I am neither a seller, nor a broker, nor deceitful, nor "ignorant" (In my opinion) but feel that whomever gets to use the points should pay the dues. Since that seemed to be the norm when we were looking at resales it seems, according to your theory, that there are a tremendous number of ignorant, deceitful people out there.

In the case sited in this thread- there are no points in the contract until September - thus the suggestion to pay only 4 months of dues. The seller has already used all of the points prior to that time.

If the Use Year were February, I would agree that paying the full year's dues might be appropriate. If the Use Year was December- no way. The issue here is that Disney does prorate dues for all purchases, but somehow some expect resales should be different.

If there were banked points in this case, I'd have no concern paying the full year's dues. In some cases, the seller has even borrowed points from the next year, which adds another dimension to the process.

Bottom line, it's important to evaluate the entire package when making the offer and compare that to a direct purchase from Disney.

 

[ClarabelleCow]

In this case, since you are getting all the 2003 points, I think the buyer should pay the dues, Yes its a Sept. use year, but once you close you could use the points ASAP by borrowing them (if I understand everything right). BUT, as a buyer, I would offer to split the dues with the seller, use it as a bargaining chip. We closed on a resale with banked points, they were a bonus, but not why we bought, the seller had already paid the dues on those points, so he just through them in, and we did not pay on them.

 

[Dean]

Originally posted by FredS
I think that this statement is unfair, and hope the original poster does not take it to heart. I think that it is perfectly reasonable to pay maintenance on the points which you receive. I am neither a seller, nor a broker, nor deceitful, nor "ignorant" (In my opinion) but feel that whomever gets to use the points should pay the dues. Since that seemed to be the norm when we were looking at resales it seems, according to your theory, that there are a tremendous number of ignorant, deceitful people out there.

If you bought from DVC with the points being as they are you'd pay the lessor of 4 months of fees or when you bought if less than 4 months. Anyone who doesn't take it to heart is overpaying on the fees. As I noted previously one must look at the entire package and make decisions. Are you and I going to spar on everything?

 

[disneyberry]

thanks to all for your advice.

but, taking another look at the 150pt OKW Sept UY contract, let me go back to what i am still unclear about:

officially, according to Disney's rules, what months do the January 2003 lump sum dues of $523.50 apply to?

• 1/1/03 through 8/31/03 (last 8 mos of 2002UY) AND 9/1/03 through 12/31/03 (first 4 mos of 2003UY)
• 9/1/02 through 8/31/03 (Just the 2002UY)
• 9/1/03 through 8/31/04 (Just the 2003UY)
  [/list=a]
  
  (i am getting the $523.50 by multiplying 150pts x $3.49/pt for OKW 2003)

 

[RobDoc]

Originally posted by disneyberry

officially, according to Disney's rules, what months do the January 2003 lump sum dues of $523.50 apply to?

• 1/1/2003 through 8/31/2003 (8 mos 2002UY) AND 9/1/2003 through 12/31/2003 (4 mos 2003UY)
• 9/1/2002 through 8/31/2003 (Just the 2002UY)
• 9/1/2003 through 8/31/2004 (Just the 2003UY)
  [/list=a]

• 
  
  a) The maintenance fees are calendar year. You are paying dues for Jan.1- Dec 31. If you purchased from Disney you would be charged only on the time remaining in the calendar year- regardless of the Use Year. When members purchased BCV last February with a Sep. Use Year, they paid no dues for the 1st 8 months of the year ... and received no points until September.
  
  With a resale, this issue is negotiable. If you feel the total price, including a full year's fees is worthwhile, is a fair deal- then it is fair. If not, then negotiate to pay the same dues you would if you purchased thru Disney. There is no right or wrong here.
  
  Enjoy the process.

 

[Dean]

Originally posted by disneyberry
thanks to all for your advice.

but, taking another look at the 150pt OKW Sept UY contract, let me go back to what i am still unclear about:

officially, according to Disney's rules, what months do the January 2003 lump sum dues of $523.50 apply to?

• 1/1/03 through 8/31/03 (last 8 mos of 2002UY) AND 9/1/03 through 12/31/03 (first 4 mos of 2003UY)
• 9/1/02 through 8/31/03 (Just the 2002UY)
• 9/1/03 through 8/31/04 (Just the 2003UY)
  [/list=a]
  
  (i am getting the $523.50 by multiplying 150pts x $3.49/pt for OKW 2003)

• "a" as Doc and I both said. Convincing the seller and broker that this is correct might take some doing though. The second contract I bought, the broker finally called DVC then called me back and said "you were right, I didn't know it was that way".

 

[FredS]

Originally posted by Dean
If you bought from DVC with the points being as they are you'd pay the lessor of 4 months of fees or when you bought if less than 4 months. Anyone who doesn't take it to heart is overpaying on the fees. As I noted previously one must look at the entire package and make decisions. Are you and I going to spar on everything?

I just did not want a new person to take this characterization as the "gospel" on this issue and from that think that he was dealing with someone who was trying to take advantage of him or who was clueless. I guess we will have to agree to disagree, but it makes perfectly good sense to me that whomever gets the years' allotment of points is responsible for the maintenance on those points. Probably why that is the standard for resale contracts, the whole "maintenance fees paid on calendar year, not use year" concept. I can't imagine a seller agreeing to pay fees on points he doesn't get to use, unless he is in a bind to dump a contract, and as a buyer don't feel that I would be taken advantage of by paying dues on points available to me.

 

[kem330]

I would just like to reiterate what Disney does: On my BCV add on last year, I purchased in Feb 02, closed in June with a Dec 02 use year to go along with my BWV contract. I paid ONLY 1 month dues for these 2002 points. If you were to buy from Disney, at this time you would be given an October use year, with all 2002 points and more coming in Oct 03. Your dues would be prorated from date of purchase for 2003- that is you would pay dues from Mar- Dec, NOT for the whole year. So why should resale be any different? As regards to Disney's official line- it seems to be up to debate. My guide said the dues paid in jan each year cover the dues for that calendar year, regardless of use year. You can divide that up any way you like as illustrated in previous posts.

 

[Dean]

Originally posted by FredS
I just did not want a new person to take this characterization as the "gospel" on this issue and from that think that he was dealing with someone who was trying to take advantage of him or who was clueless. I guess we will have to agree to disagree, but it makes perfectly good sense to me that whomever gets the years' allotment of points is responsible for the maintenance on those points. Probably why that is the standard for resale contracts, the whole "maintenance fees paid on calendar year, not use year" concept. I can't imagine a seller agreeing to pay fees on points he doesn't get to use, unless he is in a bind to dump a contract, and as a buyer don't feel that I would be taken advantage of by paying dues on points available to me.

The reason it's done the other way for resale is that essentially all timeshares except DVC function the way you'd like it to be. They simply don't know the situation (ignorance) or don't care to explain it to the parties (deceitful), mostly the former. I can see no other way to divide the "dues are for the calendar year" other than I have specified else it would be for a use year. The other way to look at it is at the end of the contract in 2042. Assuming points to go all the way to the end, one will need to pay dues for that last month where under your way, the last full years fees (2041) would be all you'd have to pay. There are of course variables like using up available funds and some way to divide up the points since there's no way everyone can get and use their full allotment that last 1-2 years.