Need help re resale and dues reimbursement? Update-Thanks!

[robinb]

Here is a response to another broker sent from DVC Member Accounting to that broker and forwarded to me.

No, they pay a full year of dues. 12 months from January 1 to December 31 for every year and all years thereafter. The only time they would have paid a partial year is the year they bought from us because we prorated the dues for that year from the day they purchased through 12-31. The dues were still based on calendar year which is 12 months. They are NEVER assessed based on Use Year. Just forget about their Use Year and points, that has absolutely nothing to do with dues.

Actually Dean, I think that quote supports Tom's argument. If dues are NEVER assessed on Use Year, then the dues that are paid in January 2005 really are for those points that are disbursed in 2005 regardless of Use Year. Honestly, I can see arguments for both sides, but now that Tom pointed out that the prorated dues are probably an incentive I'm back on his side of the fence where I started on another thread.

The answer really lies in the dues for DVC in 2042 (assuming that is the last year we can USE our non-SSR points). If Tom is right, there will be no dues on January 2042 because everyone is paid up until their points expire. If you and Bill are right, we will be charged a pro-rated amount for the number of months left on our Use Year in 2042.

 

[Dean]

Actually Dean, I think that quote supports Tom's argument. If dues are NEVER assessed on Use Year, then the dues that are paid in January 2005 really are for those points that are disbursed in 2005 regardless of Use Year. Honestly, I can see arguments for both sides, but now that Tom pointed out that the prorated dues are probably an incentive I'm back on his side of the fence where I started on another thread.

The answer really lies in the dues for DVC in 2042 (assuming that is the last year we can USE our non-SSR points). If Tom is right, there will be no dues on January 2042 because everyone is paid up until their points expire. If you and Bill are right, we will be charged a pro-rated amount for the number of months left on our Use Year in 2042.

I see your point. But is was a response to what are the members paying for, not what to do with resales. My previous thoughts stand.

 

[T.E. Yeary]

Dean,

The quote you posted that was forwarded from accounting to another broker, is EXACTLY what I've been saying. A calender year IS from Jan.1 to Dec.31, regardless of what your use year might be.

The hoopla here is some posters are saying one thing, while others are saying another, everyone cannot be right, when there are conflicting opinions. I only want to try to clear it up so everyone is on the same page.
If I am wrong, I'll be happy to admit it and apologize to anyone who feels offended by anything I've said and mistakenly believed to be factual.

Rest assured, it makes NO difference to me who pays what in a Resale transaction. I only try to present it to both parties as simply and fairly as is humanly possible. If a seller tells me that he wants reinbursement for the dues, then that is what I tell the buyer.

Tom

 

[Dean]

Dean,

The quote you posted that was forwarded from accounting to another broker, is EXACTLY what I've been saying. A calender year IS from Jan.1 to Dec.31, regardless of what your use year might be.

The hoopla here is some posters are saying one thing, while others are saying another, everyone cannot be right, when there are conflicting opinions. I only want to try to clear it up so everyone is on the same page.
If I am wrong, I'll be happy to admit it and apologize to anyone who feels offended by anything I've said and mistakenly believed to be factual.

Rest assured, it makes NO difference to me who pays what in a Resale transaction. I only try to present it to both parties as simply and fairly as is humanly possible. If a seller tells me that he wants reinbursement for the dues, then that is what I tell the buyer.

Tom

Tom, there's not truly any right or wrong as this is a resale situation where everything is negotiable, BUT. I might have misunderstood you so let me be clear. Dues are either calendar year or use year, there's no in between. If they're use year, the dues paid in Jan are for the points whenever you get them. If they're calendar year, the dues billed in Dec and due in Jan, are for Jan, Feb, etc which would cover part of the previous use year and part of the upcoming one. DVD further reinforces this by only charging dues EITHER from when you buy or when your points start, whichever is later (the current promotion as an exception where there are no points this year regardless). And they specifically state they are NOT for the use year. Here's an example. Say you sell an August use year now with all points coming in August and no banked or current points. The NEUTRAL dues situation is very simple, 4/12 of the years dues. To charge the buyer the full year or suggest they should pay that, is simply overcharging them. To be honest, you are not the only broker that looks at it as the "you get the points, you pay the dues" (unless I misread you), but it is technically incorrect. Or put another way, you can't say it's for a calendar year and still say one owes the entire dues in the above example, there's no in between.

 

[T.E. Yeary]

I GIVE UP!

Tonight I'm going to tell my wife that I'm the one with the headache!!!

Tom

 

[RobDoc]

Actually Dean, I think that quote supports Tom's argument. If dues are NEVER assessed on Use Year, then the dues that are paid in January 2005 really are for those points that are disbursed in 2005 regardless of Use Year.

I think the key point here is that the annual fees have nothing to do with Use Year (I think everyone is in agreement on that issue) and also has nothing to do with points (lots of dissension/misunderstanding on that issue). The fees are based soley on ownership percentage of a resort (points, as explained in the POS, have no intrinsic value by themselves and are simply a means of expression of ownership). We each own a percentage of a specific "unit" at a DVC resort. The annual fees are the assessed needs of the budget - based on the calendar year- to run the resort for that period of time. Points are the basis which allows us to spend time at the resort, but we own the percentage of the resort for the entire year, regardless how many points we own and regardless IF we even go there during the year. We, as owners, will need to pay the expenses whether we get any points at all. It is the cost of ownership.

The issue, as I see it, is for the seller and buyer to have a common ground when negotiating the purchase of the contract. Nothing more and nothing less. IMO, the amounts involved with the annual fees are small enough in most cases that it should not be a barrier- for either side - to come to an agreement. I'd sure hate to miss out on an otherwise good deal because of a few dollars (or even a few hundred).

As for the suggestion made recently that prorating dues by DVC is an "incentive", I find it very un-Disneylike to not promote that "incentive" in their informational materials and therefore question it's actual intent as an incentive. While it could actually be an incentive by DVC, I believe it is because the buyer isn't expected to pay taxes and maintenance for the days/weeks/months they didn't own anything at the resort that year - thus the repeated insistence in the DVC documents that the fees are annual and not based on Use Year. The budget itself is based on the calendar year and runs January 1- December 31.

Perhaps sellers could use that same thinking to their advantage and actually advertise that annual fees are included in their listed price. It would seem to me that it couldn't hurt to emulate Disney's policies when reselling the same product.

The answer really lies in the dues for DVC in 2042 (assuming that is the last year we can USE our non-SSR points). If Tom is right, there will be no dues on January 2042 because everyone is paid up until their points expire. If you and Bill are right, we will be charged a pro-rated amount for the number of months left on our Use Year in 2042.

All DVC resorts except SSR end on January 31, 2042. Are you suggesting that those with a December, 2005 Use Year will only have 61 days to use the points on which they paid a full year's fees?

I don't expect that there will any dues owed for 2042 - but there will be 31 days to use the resorts, so DVC could well have some means to assess those who use the resort during that month. I guess we'll just have to wait to see what happens there.

Interesting discussion. The most important aspect , IMO, is for everyone, sellers and buyers alike, to be educated how the program works and base their purchase/sale decisions on those factors rather than assuming any position to be immovable.

 

[JimC]

...The answer really lies in the dues for DVC in 2042 (assuming that is the last year we can USE our non-SSR points). If Tom is right, there will be no dues on January 2042 because everyone is paid up until their points expire. If you and Bill are right, we will be charged a pro-rated amount for the number of months left on our Use Year in 2042.

And the only people who will pay that one month of dues are those DVC1 owners with January reservations or DVC2 (SSR currently) owners who also own a DVC1 resort.

Now if DVC reimburses members in good standing any unused reserve funds at the end of the contract that might also encourage payment.