I dont get it..Deeded Interest?

[jockotaco]

I don't quite understand the whole idea of selling you a deeded interest that expires and they take it back. Isn't this more of a long term lease with a lump sum up front payment and monthly lease payments? Can someone please explain that?

 

[Dean]

I don't quite understand the whole idea of selling you a deeded interest that expires and they take it back. Isn't this more of a long term lease with a lump sum up front payment and monthly lease payments? Can someone please explain that?

Technically it's call Right to Use (RTU). Much of Oahu is like this for residential real estate. Most timeshares in points hold the deeds in trust and I'm sure DVC wishes they had done so. That way you don't have to do a deed every time.

 

[TheRustyScupper]

1) DVC is a lease.
2) Never has been a property sale.
3) Never will be.

 

[chalee94]

Isn't this more of a long term lease with a lump sum up front payment and monthly lease payments?

thinking of it as a lease is basically fine.

there are no monthly lease payments, though, once you pay off your upfront contract.

the maintenance fees (or "annual dues") are more like gassing up the car you've leased or paying to run it through a car wash...

 

[Brian Noble]

Isn't this more of a long term lease with a lump sum up front payment and monthly lease payments? Can someone please explain that?

Thinking of it as a lease is a pretty good way of thinking about it. As Dean mentions, it is structured as a Right-To-Use property, but with an extra twist: the "deeded leasehold". This was done in part to deflect what DVC thought would be a negative with sales (Deeded vs. Trust), and also to structure things so that purchasers could claim mortgage interest deductions (impossible if there is no "deed".)

But, it's not a "typical" deed for a couple reasons. The most important is that the land on which the resorts sit is part of the Reedy Creek Improvement District. RCID is Disney's very own privately-owned municipal government, granted to it by the Florida legislature when WDW was first developed. Of course, the laws of the land do still apply---e.g. voting rights of landowners---but if only Disney and Disney employees "own" land in the District, then Disney controls all the votes. Disney is insanely protective of this. For example, even regular hotel reservations include a statement that you promise not to make it your permanent residence. Likewise, when the Four Seasons was given some land to develop as part of their destination club/fractional system, it was de-annexed from RCID.

I think Dean is right, though. If they had it to do over again, I bet they'd've structured it as a trust.