New $500 Resale DVC Transfer Fee

[mkatsy]

The business of timeshare development is selling new timeshares.

And goodwill is intangible, that’s part of the reason that DVC resale has held its value. Nobody likes sneaky. There are professional ways to deal with cost increases to your customers, and burying them in an online Q & A isn’t it.

 

[eticketplease]

Except that Disney was not a signatory; they are a third party. The sales contract only states the agreement between the buyer and the seller. There is a larger philosophical issue here that is interesting, but maybe not important for the thread.

Yes, I was not including Disney as a party since they are not the owner of the contract. I guess I should’ve been more specific when referring to the parties.

That is why I believe as long as the contract is signed by the buyer and seller by 12/31/25 to agree to the sale that the fee will not be charged even if ROFR status is not determined until after January 1, 2026

 

[Brian Noble]

That reminds me: I forgot to touch on the larger philosophical issue.

No contract can ever cover all contingencies. That's because the contract has a finite number of words, but there are potentially an infinite number of possibilities that might impact the transaction. That number is probably countably infinite, because you can describe each particular situation with words, and the strings-of-words can be totally ordered. But still.

I suppose you could argue that the actual possible set of contingencies is not infinite. But I sitll think it is unlikely you could generate a contract that anticipated all possible contingencies.

 

[Brian Noble]

That is why I believe as long as the contract is signed by the buyer and seller by 12/31/25 to agree to the sale that the fee will not be charged even if ROFR status is not determined until after January 1, 2026

But that contract cannot bind Disney to (not) do something, because they are not a party to it. Someone is going to pay Disney $500, or they will not process the transfer, and the presence of this contract between buyer and seller won't compel them to do so. Presumably, the contract is mute on the question of additional fees, and if so, the parties need to negotiate it.

 

[Add-On-Itis]

Also a note on Marriott: While they do charge a large amount, that is not just to transfer resale points but also to "wash" them, so it isn't really the same thing.

At this rate. I wouldn't be surprise if Disney offer a PRICE to wash resale points. What is your guess per point to wash the point? $20-120

 

[Brian Noble]

First, I think it will not happen, because it is not already an option. Second, I assume it will be high enough that it is not worth doing in most cases. The restrictions are not (just) about devaluing resale, because they follow the blue vs. white card distinction. That is the important distinction, and you are in or you are out. But, with restrictions the definition of "in" has changed---it is now per-account and per-point. I don't think Disney wants to create a less expensive way for points to be in that doesn't involve buying new points.

So, if anything, I think they will follow Diamond's model, where you would need to buy new developer points to requalify dirty resale points. Diamond required a 1-to-1 purchase. Disney would probably require more.

 

[melissa70]

Riviera is selling just fine and it’s almost sold out.

We are on year six right now which will finish I believe in March but it could’ve been January 2019 that they started I can’t remember.

Riviera has about 650,000 less points than AKL which took 7 years to sell out without restrictions and less upfront costs (not looking at inflation here)

Riviera most likely would have sold out by now if not for the pandemic.

It has the best incentives so I thought maybe they were having trouble moving it. I felt The rep I was working with was seeming to push Riviera

 

[eticketplease]

But that contract cannot bind Disney to (not) do something, because they are not a party to it. Someone is going to pay Disney $500, or they will not process the transfer, and the presence of this contract between buyer and seller won't compel them to do so. Presumably, the contract is mute on the question of additional fees, and if so, the parties need to negotiate it.

I had originally replied to someone about ROFR and now being charged the fee since their assumption was no resale contracts would pass until after 1/1/26 and then would be accessed the fee.

I was stating that I don’t believe the fees will be assessed on contracts that are signed by 12/31/2025 which is why I don’t believe if the ROFR decision ends up being made after 1/1/26 that those contracts would be subjected to the new $500 fee.

Per @airjay75 screenshot it states all parties and then states buyers and sellers with no Disney/DVC/DVD reference.

If the contract is signed on 1/1/26 then certainly the fee would apply.

 

[Brian Noble]

The plain language of the FAQ suggests that they will charge it to any contract that closes on or after 1/1, not that was signed on or after that date. The "all parties must sign" is a separate sentence. But I suppose they could be nice about it for those in transition. I am not sure I would expect it.

 

[eticketplease]

It has the best incentives so I thought maybe they were having trouble moving it. I felt The rep I was working with was seeming to push Riviera

The cabins at Fort wilderness have the best incentives, but I certainly wouldn’t touch that one.

I would not mind staying there, but I will not buy a property that is limited to one type of accommodation plus the dues are just crazy

 

[eticketplease]

The plain language of the FAQ suggests that they will charge it to any contract that closes on or after 1/1, not that was signed on or after that date. The "all parties must sign" is a separate sentence. But I suppose they could be nice about it for those in transition. I am not sure I would expect it.

Yes, I guess I need to follow up on what actually is the closing process?

I just assumed it was with the contract being signed as generally the money is handed over to an escrow account at that point and the deal is done until waiting for Disney’s decision.

 

[airjay75]

It has the best incentives so I thought maybe they were having trouble moving it. I felt The rep I was working with was seeming to push Riviera

https://www.disboards.com/threads/first-riviera-rofr.3971706/post-66328828

If you want to dive into some RIV sales history, that is a post I have bookmarked that is very interesting. In 2022, when RIV was much newer and we were starting to come out of the COVID slowdown, RIV actually outsold VGF. And, when RIV first opened in 2019, it put up pretty fantastic sales figures. Had COVID never happened, RIV would already be sold out. There isn't much concrete evidence that resale restrictions have hurt RIV sales by any significant amount.

 

[Brian Noble]

You can find the evidence you are looking for, if that's all you look for. But, for me the proof in the pudding is that Disney has not reversed itself on the decision to add restrictions to new associations.

(This started out as a different statement, but I recalled that nothing pays off so much as restraint of tongue and pen.)

 

[eticketplease]

There isn't much concrete evidence that resale restrictions have hurt RIV sales by any significant amount.

Agreed. Then they continued them with the the next new associations so unfortunately they seem to be here to stay.

 

[walt34]

But that contract cannot bind Disney to (not) do something, because they are not a party to it. Someone is going to pay Disney $500, or they will not process the transfer, and the presence of this contract between buyer and seller won't compel them to do so. Presumably, the contract is mute on the question of additional fees, and if so, the parties need to negotiate it.

Interesting perspective. Is there a (legal) limit to what Disney can demand here? Could they ask for $20,000 per transaction (which would kill the resale market)? Or are there (time share law / common law) limitations? Can they change the fees at will or do they have to announce these rule changes in a way that gives contracting parties to react?

I'm not trying to cause panic with an (obviously) absurd scenario. I'm just trying to understand if there are limits in law or contract.

 

[pzw90]

Another take

DVC Community: "Curb commercial activity"
DVCM: "We're doing what YOU want. We noticed a lot of activity related to commercial renters is with them buying and selling contracts, this is to discourage and slow them down. Look, Carl here did 20 transactions in the last month, its targeted at THEM. But you don't have to worry about that fee when buying from us."

 

[jennypenny]

If the reason for the fee is really to hire more agents, that seems ridiculous since most of this kind of stuff will be automated within 5 years or so. (that's what always gets me about these types of fees -- they are for functions that are completely automated now that don't require a human to do anything)

Either this is a sign that Disney's IT is really behind the curve, or they want to churn contracts much faster, or they want to drive resale prices down far enough that they can ROFL most of them, or they are just being greedy. That last one has my vote.

We have two contracts to list but we were waiting until springtime. I'm mad that I'll net less after this fee for no reason other than greed. I'm really close to giving up on disney completely (which is so sad after 25+ years of DVC) but the constant paper cuts are killing me. We can still go if we want, but we won't be married to the mouse any longer.

 

[gvel]

At this rate. I wouldn't be surprise if Disney offer a PRICE to wash resale points. What is your guess per point to wash the point? $20-120

I would love to see something like this, but I highly doubt it will ever happen. It takes away from their approach of selling direct for the perks. IF they were to do it, it will need to be for $100+ (or the current spread between direct and resale) per point to protect/justify the price difference of going direct.

 

[airjay75]

Is there a (legal) limit to what Disney can demand here?

I don't know the answer to this, but just a thought that crosses my mind. If someone wanted to make sure some limits were imposed here, the best route would probably be for DVC members who are FL residents to lobby their state legislators. I honestly think that Disney making it more difficult to sell timeshares, especially smaller interests, and profiting off the "little guy" who is just "trying to make his dreams come true" is a message that would resonate across the political spectrum, albeit for slightly different reasons. Not saying I think that is good or bad policy (and it could have unintended consequences even if accomplished), but I don't think it would be a terribly difficult sell to state politicians.

 

[pzw90]

If the reason for the fee is really to hire more agents, that seems ridiculous since most of this kind of stuff will be automated within 5 years or so. (that's what always gets me about these types of fees -- they are for functions that are completely automated now that don't require a human to do anything)

Hire them now, fire them when their roles get automated and by that point people will be used to the fees, keep the fees.
Just like any tax or fee becomes the norm, (baggage fees - fuel costs are high so lets charge per bag, people get used to baggage fees, fuel costs go back down fees stay)