New $500 Resale DVC Transfer Fee

[Jlo85]

Out of curiosity, is there anything preventing them from charging $5000, or $50,000? What are the chances that this gets challenged in some way?

This fee immediately diminishes the value of existing DVC contracts, right? I have to question the legality of adding a fee post-facto.

 

[disneylandtour]

This fee immediately diminishes the value of existing DVC contracts, right? I have to question the legality of adding a fee post-facto.

I think I could get more behind this fee if I knew for certain it would take some upward pressure off general MFs for existing members. If it's just another money grab, then, yeah, it sucks. If it's a way to prevent current members from paying for the costs associated with contract transfer (and hey, maybe this should be $100, not $500), I'm slightly more sympathetic. But the the amount ($500) makes it feel more like a money grab.

 

[eticketplease]

I’d only be surprised if this evolution doesn’t slowly trim how resale points still qualify for perks.

They have been slowly removing the dvd rentals….

 

[Brian Noble]

The documents are written such that Disney has enormous discretion about what they do when it comes to many things---and some of those things can have negative consequences on the resale value of any particular contract. Adding resort restrictions, for example.

This is one of the reasons why I always give the same advice to people considering a purchase: Assume the resale value will be zero dollars when you are done using it, and only buy if it still makes sense to you. If there is some residual value, consider it found money.

 

[eticketplease]

This is a win-win for Disney. They either get $500 per contract or they get to ROFR the contract and sell the points at a higher rate. I also wondered if these fees would fund the ROFR budget and what that could mean for the future of resale contracts.

You forgot the third win.
Seller pays $500 admin Fee
Disney ROFRs contract
Disney resells points (bonus if they get to change an OKW from 42 to 57)

 

[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.

Update. Wouldn't you know it, my contract passed today, so 15 days. It looks like we should be good to go for December.

 

[juliebee]

You forgot the third win.
Seller pays $500 admin Fee
Disney ROFRs contract
Disney resells points (bonus if they get to change an OKW from 42 to 57)

you know, that is a good point. If the contract specifies that the BUYER pays the $500 fee, then at least DCVM doesn't get both the fee and the ROFRed contract because they'd be on the hook for the $500.

 

[Brian Noble]

Seller pays $500 admin Fee
Disney ROFRs contract

I don't think this is possible. The $500 is only to pay for the transfer to the buyer's account. If that transfer does not happen (because the transferee is Disney) then there won't be a transfer fee. At least, I will be very surprised if there is.

 

[eticketplease]

I don't think this is possible. The $500 is only to pay for the transfer to the buyer's account. If that transfer does not happen (because the transferee is Disney) then there won't be a transfer fee. At least, I will be very surprised if there is.

That is a good point however when Disney ROFRs a contract it honors all of the language, but I’m sure you’re right

 

[Genie+]

Among the many purposes this fee may serve, it could also bolster the value proposition of point washing by helping the math in DVD’s favor. If and when that ever comes lol.

We’re thinking of adding-on. The choice is whether to simply add 100pts resale (making us 50/50 direct/resale), or selling our 50pt resale then adding 150pts direct during decent incentives (making us 100% direct). Either way this fee would happen. I’m guessing sellers will absorb more of that cost than buyers? Hard to say. Guess we’ll see how much resale prices dip over this.

 

[Genie+]

The resale market should split this fee 4 ways:

The seller, the buyer, the broker and DVD each need to kick in $125

 

[drusba]

Is this legal? I have my doubts.

As to condominiums, which are all the Florida DVC Resorts except the Cabins of Ft. Wilderness, Fl Stat. 718.112(2)(i) provides, as to these types of transfer fees for resales:

"Transfer Fees. No charge shall be made by the association or any body thereof [which would include DVCM] in connection with the sale, mortgage, lease, sublease, or other transfer of a unit unless the association is required to approve such transfer and a fee for such approval is provided for in the declaration, articles, or bylaws. Any such fee may be preset, but in no event may such fee exceed $100 per applicant other than husband/wife or parent/dependent child, which are considered one applicant."

The declarations for DVC's timeshare condominiums, e.g., BWV §13, specifically provide that the association's approval is not required for a resale, and I have not found any provision in the declarations, articles of incorporation, or bylaws that provide for a transfer fee relating to resales, which would indicate that the fee to be charged by DVCM is not allowed by the condominium statute

Possibly, DVC's position is that this is covered by the timeshare statute, §721, and the condo statute should be ignored on this issue if there is a conflict between the two statutes. However, the timeshare statute does not appear to actually mention whether the timeshare entity, the association or a resort manager can charge or not charge any transfer fee, in which case the condominium statute should control the issue.

The timeshare statute does have a provision that states the managing entity is required, if requested by those involved in the sale, to provide:

"A certificate, signed by an officer or agent of the managing entity, to the person requesting the certificate, that states the amount of any assessment, transfer fee, or other moneys currently owed to the managing entity, and of any assessment, transfer fee, or other moneys approved by the managing entity that will be due within the next 90 days, with respect to the designated consumer resale timeshare interest, as well as any information contained in the books and records of the timeshare plan regarding the legal description and use plan related to the designated consumer resale timeshare interest....The managing entity may charge a fee not to exceed $150 for preparation and delivery of the certificate."

That just points out that if there is a transfer fee, it has to be listed in the certificate, and generally a transfer fee could apply to personal interest timeshares or even real property timeshares that are not condominiums.

 

[Steelers0854]

$500 per transfer is not "printing money." One of the largest brokers handled 4K contracts in a year. Even if DVC processed 10K contracts in a year, that's $5M of revenue. For the entire year.

That's peanuts.

For reference, they are averaging 159,000 points per month just at WDW. This is ignoring VDH and Aulani. Figure an average net price of about $215/pp, for a revenue stream of $34 billion-with-a-B, plus change. (Mea culpa: it's million-with-an-M. I don't normally consider myself innumerate, but apparently I am. Still compared to the 400K/month for transfer paperwork....)

Every. Single. Month.

Seems like the exact definition to me. Do nothing, get $5 million. Plus you have the direct purchases that will come from this, even more money. You would be hard pressed to find any business that would turn down free revenue for literally doing nothing different, even Disney, money is money.

 

[Steelers0854]

Is this legal? I have my doubts.

As to condominiums, which are all the Florida DVC Resorts except the Cabins of Ft. Wilderness, Fl Stat. 718.112(2)(i) provides, as to these types of transfer fees for resales:

"Transfer Fees. No charge shall be made by the association or any body thereof [which would include DVCM] in connection with the sale, mortgage, lease, sublease, or other transfer of a unit unless the association is required to approve such transfer and a fee for such approval is provided for in the declaration, articles, or bylaws. Any such fee may be preset, but in no event may such fee exceed $100 per applicant other than husband/wife or parent/dependent child, which are considered one applicant."

The declarations for DVC's timeshare condominiums, e.g., BWV §13, specifically provide that the association's approval is not required for a resale, and I have not found any provision in the declarations, articles of incorporation, or bylaws that provide for a transfer fee relating to resales, which would indicate that the fee to be charged by DVCM is not allowed by the condominium statute

Possibly, DVC's position is that this is covered by the timeshare statute, §721, and the condo statute should be ignored on this issue if there is a conflict between the two statutes. However, the timeshare statute does not appear to actually mention whether the timeshare entity, the association or a resort manager can charge or not charge any transfer fee, in which case the condominium statute should control the issue.

The timeshare statute does have a provision that states the managing entity is required, if requested by those involved in the sale, to provide:

"A certificate, signed by an officer or agent of the managing entity, to the person requesting the certificate, that states the amount of any assessment, transfer fee, or other moneys currently owed to the managing entity, and of any assessment, transfer fee, or other moneys approved by the managing entity that will be due within the next 90 days, with respect to the designated consumer resale timeshare interest, as well as any information contained in the books and records of the timeshare plan regarding the legal description and use plan related to the designated consumer resale timeshare interest....The managing entity may charge a fee not to exceed $150 for preparation and delivery of the certificate."

That just points out that if there is a transfer fee, it has to be listed in the certificate, and generally a transfer fee could apply to personal interest timeshares or even real property timeshares that are not condominiums.

It’s not a transfer fee, they specifically call it a Contract Administration Fee. In no world would their lawyers have not made sure this thing wasn’t bullet proof before implementing it.

 

[Cyberc1978]

Is this legal? I have my doubts.

As to condominiums, which are all the Florida DVC Resorts except the Cabins of Ft. Wilderness, Fl Stat. 718.112(2)(i) provides, as to these types of transfer fees for resales:

"Transfer Fees. No charge shall be made by the association or any body thereof [which would include DVCM] in connection with the sale, mortgage, lease, sublease, or other transfer of a unit unless the association is required to approve such transfer and a fee for such approval is provided for in the declaration, articles, or bylaws. Any such fee may be preset, but in no event may such fee exceed $100 per applicant other than husband/wife or parent/dependent child, which are considered one applicant."

The declarations for DVC's timeshare condominiums, e.g., BWV §13, specifically provide that the association's approval is not required for a resale, and I have not found any provision in the declarations, articles of incorporation, or bylaws that provide for a transfer fee relating to resales, which would indicate that the fee to be charged by DVCM is not allowed by the condominium statute

Possibly, DVC's position is that this is covered by the timeshare statute, §721, and the condo statute should be ignored on this issue if there is a conflict between the two statutes. However, the timeshare statute does not appear to actually mention whether the timeshare entity, the association or a resort manager can charge or not charge any transfer fee, in which case the condominium statute should control the issue.

The timeshare statute does have a provision that states the managing entity is required, if requested by those involved in the sale, to provide:

"A certificate, signed by an officer or agent of the managing entity, to the person requesting the certificate, that states the amount of any assessment, transfer fee, or other moneys currently owed to the managing entity, and of any assessment, transfer fee, or other moneys approved by the managing entity that will be due within the next 90 days, with respect to the designated consumer resale timeshare interest, as well as any information contained in the books and records of the timeshare plan regarding the legal description and use plan related to the designated consumer resale timeshare interest....The managing entity may charge a fee not to exceed $150 for preparation and delivery of the certificate."

That just points out that if there is a transfer fee, it has to be listed in the certificate, and generally a transfer fee could apply to personal interest timeshares or even real property timeshares that are not condominiums.

Thanks.

I wonder if DVD have considered this - with all their lawyers I assume they have.

For the last section does it mean that the $150 sellers pay in estoppel fees are okay? But any other fee is not?

 

[Cyberc1978]

It’s not a transfer fee, they specifically call it a Contract Administration Fee. In no world would their lawyers have not made sure this thing wasn’t bullet proof before implementing it.

If you don’t pay the fee thy won’t transfer the contract from seller to buyer.

Just because you call something a different name doesn’t change what it is.