New $500 Resale DVC Transfer Fee

[walt34]

I would imagine that technically they could try to make it higher but I also don’t believe that DVD/DVCM would do something so outrageous that it could by challenged legally as preventing someone from selling their timeshare.

Well, a $500 fee on a 50 point $46 per point Vero contract will presumably already have an impact.

My guess is that they added it to the website language first and will roll this out officially to title companies second and to owners next week during the meetings if asked.

If there are limits on what would be a reasonable price, shouldn't there also be a reasonable process? Adding it to the FAQs while people are negotiating contracts at the current price points seems questionable to me.

This certainly is a move that makes the flipping of contracts more expensive.

I guess it will depress point prices over time, even if buyers are paying for it at first.

Again, maybe they will turn the found revenue into the marketing budget and use it to give direct owners bigger benefits!!!

And here I thought sarcasm was being frowned upon on these boards ;-)

 

[AstroBlasters]

Not to sound like a Disney apologist here, because they make a lot of really dumb choices….. but they will spend BILLIONS of dollars to expand/improve WDW & DL over the next 10 years… which IMO will make our contracts even more valuable than they are today.

 

[Patmcpsu]

You use the word “greed” like it is a moral failing.

Disney is a publicly owned company and not a family owned business. One of the core jobs of a management team is to maximize the return to the companies owners.

This is just capitalism. Grow your bottom line and earn your bonus or you will get fired and replaced be someone else who will.

There need not be any nefarious explanation. As the system grows and ages, the volume of resale transactions will also grow, and the resources required to process them become a noticeable entry on the balance sheet. Someone decided that it was reasonable to recover those costs directly from those who are incurring them. $500 is not out of line given what other timeshare developers already charge for demonstrably poorer service in transferring ownership.

I think that these two statements are incompatible with each other. Either this $500 fee is a one-time cost to replace the recurring cost (annual dues), or it's going straight into Mickey's pocket. I think it's the former, because the latter doesn't seem proper for a time share.

The timing is also interesting. If this came up last night, and the new fee kicks in in 30 days. I wouldn't be surprised to see anything sent to ROFR from now on not getting decided until 12/31 so all closings happen 1/1 and after

And as far as the timing being "interesting" I would say it's because annual dues just got proposed. Considering that dues are going up by a decent amount, the offset didn't get captured. Or the offset isn't enough to move the needle, but if that's the case, the justification for the change loses credibility and you have to wonder if Disney is simply toying with the resale market.

 

[IDSkinner]

Great thread and input from everyone. Thank you!

While I have no issue, not that it matters, with them charging a fee for the processing of the contract, I do have an issue with the 30-day notice. I have a 175-point contract that went to ROFR on November 17th, and I will likely have mine pushed to close to after January 1, so the $500 fee is too short of a notice in my opinion when the deposit and process was well underway prior to this announcement. A 90-day notice would've been more reasonable and may have caused me to offer a different price and the same goes for the seller at the time.

 

[Sandisw]

Well, a $500 fee on a 50 point $46 per point Vero contract will presumably already have an impact.

If there are limits on what would be a reasonable price, shouldn't there also be a reasonable process? Adding it to the FAQs while people are negotiating contracts at the current price points seems questionable to me.

I guess it will depress point prices over time, even if buyers are paying for it at first.

And here I thought sarcasm was being frowned upon on these boards ;-)

When I say reasonable price, I am talking in relation the the work it’s being billed as.

$500 doesn’t seem out of line with the range of costs out there.

Look at what title companies charge for closing. Is the work they do so much more?

As I posted, it may have been rolled out there first because it answers questions for an owner who might be wanting to sell.

But, it’s why I think owners should always be monitoring the documents regularly because that is where changes show up.

Now, we don’t have confirmation yet if they are going to make any exceptions to the fee for contracts in process before that was updated.

Next week will provide more answers as I will be sure to ask about it if no one else does, or if we do t have more before then.

 

[Disfamwa]

I can definitely understand the frustration but dues cover the operating costs for the program.

DVCM does get a set fee to manage the program but while MA is under the umbrella, the task of transferring the deeds it different.

At one point, years ago, DVD didn’t even charge closing costs to buy direct…and now they do when selling contracts.

With resale, the title company gets the money via closing costs to handle it…so I can see why they decided to charge given the volume of resales they handle.

It’s definitely going to change the math.

I’m sure this wasn’t their goal, but I hope this eats into the profit of large stripping and flipping operations.

I think for those of us that the use the program as intended, this feels annoying, but it makes sense to put cost of the labor directly on the parties using the labor and not all of membership.

 

[Sandisw]

Great thread and input from everyone. Thank you!

While I have no issue, not that it matters, with them charging a fee for the processing of the contract, I do have an issue with the 30-day notice. I have a 175-point contract that went to ROFR on November 17th, and I will likely have mine pushed to close to after January 1, so the $500 fee is too short of a notice in my opinion when the deposit and process was well underway prior to this announcement. A 90-day notice would've been more reasonable and may have caused me to offer a different price and the same goes for the seller at the time.

I think that’s one of the questions that will be answered soon…as title companies and brokers will need to know how to advise sellers and buyers.

 

[eticketplease]

Great thread and input from everyone. Thank you!

While I have no issue, not that it matters, with them charging a fee for the processing of the contract, I do have an issue with the 30-day notice. I have a 175-point contract that went to ROFR on November 17th, and I will likely have mine pushed to close to after January 1, so the $500 fee is too short of a notice in my opinion when the deposit and process was well underway prior to this announcement. A 90-day notice would've been more reasonable and may have caused me to offer a different price and the same goes for the seller at the time.

As I stated earlier I don't believe this will be an issue as you already had yours submitted to rofr.
I believe this will play out like when they changed the restrictions so that you couldn't use your resale points at future resorts starting with RIV.
As long as the contracts were signed and submitted to Disney for ROFR by that day (Jan ?? 2019) they would be good at all resorts assuming it past.
So if that holds true if they are submitted by 12/31/25 it should not occur the new fee.

 

[jennypenny]

You use the word “greed” like it is a moral failing.

Disney is a publicly owned company and not a family owned business. One of the core jobs of a management team is to maximize the return to the companies owners.

This is just capitalism. Grow your bottom line and earn your bonus or you will get fired and replaced be someone else who will.

Greed is a moral failing. And I'd argue this falls under that category and not 'capitalism'.

This isn't like disney is raising gate prices because they're making improvements or incurring higher wage pressure from employees. This is taking a transaction with an almost negligible cost that they've been doing for 30 years -- one that will get even cheaper with increased automation -- and tacking on a significant fee.

 

[eticketplease]

Greed is a moral failing. And I'd argue this falls under that category and not 'capitalism'.

This isn't like disney is raising gate prices because they're making improvements or incurring higher wage pressure from employees. This is taking a transaction with an almost negligible cost that they've been doing for 30 years -- one that will get even cheaper with increased automation -- and tacking on a significant fee.

It was quoted earlier that there over 4,000 contracts sold last year by just one company.

Disney has certainly had a cost of creating new memberships or adding the contracts to an existing owner.
We have no way of knowing how much it costs to perform these tasks but Disney is certainly not greedy in trying to recoup some of these costs that they have not passed along previously.

 

[walt34]

When I say reasonable price, I am talking in relation the the work it’s being billed as.

$500 doesn’t seem out of line with the range of costs out there.

Look at what title companies charge for closing. Is the work they do so much more?

As I posted, it may have been rolled out there first because it answers questions for an owner who might be wanting to sell.

But, it’s why I think owners should always be monitoring the documents regularly because that is where changes show up.

Now, we don’t have confirmation yet if they are going to make any exceptions to the fee for contracts in process before that was updated.

Next week will provide more answers as I will be sure to ask about it if no one else does, or if we do t have more before then.

I don't know whether the pricing is reasonable. It sounds to me like it's more than what would be necessary to cover costs (is it more than an hour of administrative work?), so Disney will probably be earning some money with this. This wouldn't be problematic by itself (they are a business, after all), but because they are imposing this on third parties unilaterally, it seems questionable. I'd feel better about this if this fee were mentioned in the existing contracts.

Even if we agree with the fee being necessary, I certainly disagree with the way they are rolling this out. From my perspective, they should have announced this with several months' notice. Then the market would have had time to adjust and price this in. It's hard to see a reason why Disney would have had to roll this out with less than a month until it goes live.

 

[Sandisw]

I’m sure this wasn’t their goal, but I hope this eats into the profit of large stripping and flipping operations.

I think for those of us that the use the program as intended, this feels annoying, but it makes sense to put cost of the labor directly on the parties using the labor and not all of membership.

I would be surprised if this wasn’t one of the goals.

One of the hard parts of wanting to see things change to curb certain practices is that how DVC chooses to handle it may not be the way others had hoped it would be handled.

They obviously want to capture revenue from processing the transfer. And I can’t find anything that would make that something they can’t charge for since it’s work they are doing.

Now, with them charging a fee come 2026, I think buyers and sellers have a stronger position to expect that transfer process and access to the points to come a lot faster.

Years ago, what I was told that there are CMs at MA who were dedicated to processing direct sales and those who did resale transfer.

No idea if this is still the case but it definitely supported why direct buys had points and memberships created so fast.

Plus, the process to transfer from one owner to another does have a few extra steps buying direct does not.

 

[Sandisw]

I don't know whether the pricing is reasonable. It sounds to me like it's more than what would be necessary to cover costs (is it more than an hour of administrative work?), so Disney will probably be earning some money with this. This wouldn't be problematic by itself (they are a business, after all), but because they are imposing this on third parties unilaterally, it seems questionable. I'd feel better about this if this fee were mentioned in the existing contracts.

Even if we agree with the fee being necessary, I certainly disagree with the way they are rolling this out. From my perspective, they should have announced this with several months' notice. Then the market would have had time to adjust and price this in. It's hard to see a reason why Disney would have had to roll this out with less than a month until it goes live.

I can’t answer why it wasn’t rolled out sooner but we know last year the whole change to enforcing the rules to pay with gift cards in autopay was rolled out at beginning of December.

If I had to guess…and it’s just that…it’s because this is the time of year that they have to file amendments to the POS for budgets and when they typically update documents for rules and such.

Maybe documents related to charging the fee needed to also be filed with the state?

I do get that short notice isn’t a good look or even a nice way to do it for those who may be closing after Jan 1st and now are stuck with an added fee…whether it’s buyer or seller.

But, as I mentioned, I’ll get more info next week at one of the meetings if it’s not brought up by a owner else or if we don’t have clarification by then.

 

[AstroBlasters]

Greed is a moral failing. And I'd argue this falls under that category and not 'capitalism'.

This isn't like disney is raising gate prices because they're making improvements or incurring higher wage pressure from employees. This is taking a transaction with an almost negligible cost that they've been doing for 30 years -- one that will get even cheaper with increased automation -- and tacking on a significant fee.

Maximizing return to shareholders does not involve only raising costs to pay employees more or put money back into the business….

 

[juliebee]

Is this new fee collection something that Disney will have to itemize, like the dues spending itemization? I'd be very interested how they account for this. I doubt they pay their transfer agents $50/hr, but if they did each fee would cover 10 hours of work transferring a single contract. That seems... excessive. Are they hiring? I'd love a decent paying job with no stress like those agents would have.

 

[walt34]

I can’t answer why it wasn’t rolled out sooner but we know last year the whole change to enforcing the rules to pay with gift cards in autopay was rolled out at beginning of December.

If I had to guess…and it’s just that…it’s because this is the time of year that they have to file amendments to the POS for budgets and when they typically update documents for rules and such.

Maybe documents related to charging the fee needed to also be filed with the state?

I do get that short notice isn’t a good look or even a nice way to do it for those who may be closing after Jan 1st and now are stuck with an added fee…whether it’s buyer or seller.

But, as I mentioned, I’ll get more info next week at one of the meetings if it’s not brought up by a owner else or if we don’t have clarification by then.

It would be great if you could ask! Thanks for that!

They could easily fix, or at least improve, the short-term problem (e.g. waive the fee for those whose contracts were sent to Disney for ROFR before Jan 1).

Assuming that DVC resale markets are somewhat efficient and that current prices reflect what buyers are willing to pay, this change will nonetheless mean that every DVC owner who ever sells a contract will lose $500 per contract in the long term - regardless of who has to pay the fee - as prices will probably reflect this change.

 

[Steelers0854]

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.

There is now no incentive for them to kill the resale market. They are now printing money through it. So they win all the way around. Now that the fee exists they simply increase it to a point where they see no appreciable gain in direct sales or resales. They can always lower it to tip the market back into alignment.

I think we sometimes forget that they are in this to make money. While I don’t like being fleeced, would I rather have this fee or less perks or pay more per point on direct sales? I’ll take the fee. This will just be a bargaining chip in resale closes as to who pays for it. If the market is hot it will be the buyer. If it’s cold it will be the seller. Atleast there is still a market to get out of the DVC contract if you need or want to, you just get a bit less now.

Maybe we will see them tweak this. I for one would like to see a sliding scale based on the size of the contract but I doubt that would happen because it “costs” them the same to process a 50 point contract vs a 500 point contract. I just bought direct last year and did 3 50 point contracts at the Poly. I don’t ever expect to sell them, but I’m certainly not very upset because of the new fee. And to be fair I’m not sure I would have done it any different, maybe a 100 point and a 50 point?

At the end of the day changes will happen. But we own because we intend to own for the long haul. I’m happy there is a market to limit our losses if we ever do decide to sell, now it will just be a bit less.

 

[MagicDVC]

I could see resale pricing adjust based on this fee. I'd expect the buyer to pay this fee and the seller to pay the estoppel. If I was paying this fee, I definitely wouldn't settle for them taking 2-3 weeks from closing to load the contract and points.

 

[mort1331]

Just because a company didnt charge in the past, doesnt mean they did not incure costs on said service or item. We at our company for 50 years didnt charge for certain papers that take us seconds to produce, but are valuable to our customers. We now do charge per page, no extra work, but it does now put a value on said paper. Our customers have no issue with it. I feel the same here. Does anyone think the agents that can do the paperwork for your resale needs the amount of time, after learning the steps, that is equal to the commission? What do you value your time and the resources?

 

[mkatsy]

Just because a company didnt charge in the past, doesnt mean they did not incure costs on said service or item. We at our company for 50 years didnt charge for certain papers that take us seconds to produce, but are valuable to our customers. We now do charge per page, no extra work, but it does now put a value on said paper. Our customers have no issue with it. I feel the same here. Does anyone think the agents that can do the paperwork for your resale needs the amount of time, after learning the steps, that is equal to the commission? What do you value your time and the resources?

I think a fair comparison might be to check the Orange County Comptroller and see what they charge to record a $10 gratuitous transfer. That workload is probably closer to a DVC transfer than a title company that has to coordinate and communicate with multiple parties.