New $500 Resale DVC Transfer Fee

[Sandisw]

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.

That’s a good point and now it makes me wonder if the $150 estoppel fee they charge will be inclusive of this and not in addition to it?

I agree that there is no way that to didn’t get vetted as to something that it allowed.

 

[drusba]

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.

The statute provides that "No charge shall be made by the association or any body thereof in connection with the sale" of the condominium interest. And that means what it says. If the charge is identified as one being made "in connection with the sale," which DVCM's charge is, it is prohibited regardless of what clever rename DVCM or its lawyer tries to give it.

 

[gvel]

The statute provides that "No charge shall be made by the association or any body thereof in connection with the sale" of the condominium interest. And that means what it says. If the charge is identified as one being made "in connection with the sale," which DVCM's charge is, it is prohibited regardless of what clever rename DVCM or its lawyer tries to give it.

I hope you're right but somehow doubt Disney lawyers would mess this one up so badly. If this is the case someone in legal is surely getting fired.

 

[TheDailyMoo]

I don't know this just feels short sighted by Disney brass yet again. Sure this'll net them revenue but everything lately just keeps leaving sour tastes in more and more customer's mouths. Eventually Disney's customers will have no feeling left on their tongues! But I'm sure this'll stick just like how Verizon and other carriers charge an upgrade/activation fee when you get a new phone. There is absolutely nothing extra of substance for them to do to swap the service from your old phone to your new phone yet...here we are.

And I think what everything boils down to is...charge us...go ahead....raise prices fine. Just give us service and maintenance that is commensurate with said money grabs.

 

[Carouselofplanning]

I hope you're right but somehow doubt Disney lawyers would mess this one up so badly. If this is the case someone in legal is surely getting fired.

I step away from this board for one day and all hell breaks loose. Remember the simpler times when we were just complaining about the new annual meeting format? Those were the days!

 

[AstroBlasters]

I don't know this just feels short sighted by Disney brass yet again. Sure this'll net them revenue but everything lately just keeps leaving sour tastes in more and more customer's mouths. Eventually Disney's customers will have no feeling left on their tongues! But I'm sure this'll stick just like how Verizon and other carriers charge an upgrade/activation fee when you get a new phone. There is absolutely nothing extra of substance for them to do to swap the service from your old phone to your new phone yet...here we are.

And I think what everything boils down to is...charge us...go ahead....raise prices fine. Just give us service and maintenance that is commensurate with said money grabs.

It won’t impact people who are buying direct or who aren’t selling their points…. which in any given year is the overwhelming majority of the membership.

If you are thinking about buying or selling resale and have not pulled the trigger yet…. yeah…. no fun…

 

[Happily-Ever-After]

Gosh, Disney... So if you sell a 25 AK contract for $125, you’ll gross $3,125. You’ll pay $313 in commission, $500 for contract administration, and $150 for Estoppel. 30% gone. There is no way their costs are $500 per contract for administration. Another money grab and another way to stick it to resale.

 

[Genie+]

I step away from this board for one day and all hell breaks loose. Remember the simpler times when we were just complaining about the new annual meeting format? Those were the days!

I too remember the simpler times, like when the Skyliner opened Fall of 2019.

Endless threads discussing a wide array of doom predictions. Then Spring 2020 happened. We all forgot how bad skyliner was supposed to turn out!

 

[Sandisw]

The statute provides that "No charge shall be made by the association or any body thereof in connection with the sale" of the condominium interest. And that means what it says. If the charge is identified as one being made "in connection with the sale," which DVCM's charge is, it is prohibited regardless of what clever rename DVCM or its lawyer tries to give it.

Since DVCMC is the one handling this, it’s not really the condo association charging the fee is it?

Could that make a difference? We get charged a fee for estoppel when selling? Wouldn’t this be similar? Paperwork?

 

[DanCali]

This is huge. Specially for contracts under 100 points. I think this will effectively kill the market for VB and HHI. They are just trying to find creative ways to narrow the gap between resale and direct.

Seems like you're assuming that nothing else will change when you say that. Most likely this will further decimate resale prices just like the restrictions are doing. If that happens, it's more profit for DVC from the "junk fee" and more profit for DVC from buying lower at ROFR and expanding margins.

Seems like another thing they picked up from Marriott... why couldn't they adopt the resale contract washing program instead?

By the way MVC charges an initiation fee of $3 per MVC resale point (min $3000), and a $300 education fee for first time Marriott Destination Club Points Owners. In that system, owning 3000 points is kind of a bare minimum to be able to function, and that resale "initiation/junk fee" can be as high as the resale price (which is also around $3/pt). About half of what the resale buyer pays if a fee that goes to MVC and it's something a buyer never gets back even if they sell a month later.

Back in 2010 when the Marriott points system launched, the initiation fee was $1 and resale prices were $7-$8 (retail was ~$14). As the "junk fee" went to $2 and then to $3 (and maintenance fees went up) resale prices dropped to $2-$3 (retail is now ~$18/pt). So resale prices went from 50% vs retail to less than 20%... I don't think DVC will fall that much, but this can't possibly help resale prices.

 

[airjay75]

That’s a good point and now it makes me wonder if the $150 estoppel fee they charge will be inclusive of this and not in addition to it?

I agree that there is no way that to didn’t get vetted as to something that it allowed.

https://disneyvacationclub.disney.go.com/faq/reselling/resale-process

I am increasingly thinking that this new $500 fee is replacing the current $150 estoppel fee. This is another FAQ on the DVC website that is a bit more comprehensive answer about the resale process. If the $150 fee remains in addition to the $500 fee and they did not include that in this FAQ, that is some pretty sloppy work by their lawyers. And I say this as a lawyer who routinely assists with drafting these sorts of things (albeit in a much different context).

I'll repeat something I said earlier - if we're only talking a $500 fee (not a combined $650) and we continue to see these quick turnarounds on contract transfers, this could turn out to be something more akin to a nothing-burger than something that meaningfully impacts the resale market. That said, if that is what we're looking at, this was also a great example of a very poor corporate communication rollout IMO. Could easily been announced as a, yes, we're raising the costs to transfer your contract, but we're planning to provide much better service going forward to ensure you have the best experience possible. Maybe that's what we'll hear in the coming weeks. And, I suppose any hostility will be largely forgotten over time.

 

[808blessing]

If there is a legal issue with this implementation, is this what a class action suit is done to address it? Still learning. Iʻm sure there are some attorneys that are willing to pick it up.

 

[gvel]

Seems like you're assuming that nothing else will change when you say that. Most likely this will further decimate resale prices just like the restrictions are doing. If that happens, it's more profit for DVC from the "junk fee" and more profit for DVC from buying lower at ROFR and expanding margins.

Seems like another thing they picked up from Marriott... why couldn't they adopt the resale contract washing program instead?

By the way MVC charges an initiation fee of $3 per MVC resale point (min $3000), and a $300 education fee for first time Marriott Destination Club Points Owners. In that system, owning 3000 points is kind of a bare minimum to be able to function, so that resale initiation fee can be as high as the resale price (which is also around $3/pt) and it's something a buyer never gets back even if they sell a month later.

Back in 2010 when the Marriott points system launched, the initiation fee was $1 and resale prices were $7-$8 (retail was ~$14). As the "junk fee" went to $2 and then to $3 (and maintenance fees went up) resale prices dropped to $2-$3 (retail is now ~$18/pt). So resale prices went from 50% vs retail to less than 20%... I don't think DVC will fall that much, but this can't possibly help resale prices.

DVC is not MVC. Also, this fee is even worse for VB or HHI. The direct market is technically dead for both and in resale some loaded VB contracts in the $40s per point struggle to sell without the fee. Assumin the price shoots down. Why would they even ROFR VB and HHI? I know there was a VB ROFR a few months ago, but this was more of a statement to try to regulate the price floor than a financial strategy i.e. when they ROFR Riviera for $110 and reselling in 30 days rdirect for $235.

You add on this $500 resale fee and sure the price will technically go down specially for HHI and VB given that they will become even less attractive. But given their high dues this might create a scenario in which the contracts for these properties might need to be closer to $0 specially as we get cloeer and closer to 2042. I'm not sure this is something Disney will want for the DVC branding.

 

[mkatsy]

I hope you're right but somehow doubt Disney lawyers would mess this one up so badly. If this is the case someone in legal is surely getting fired.

Which Disney attorney would that be the genius that cooked up the Disney + arbitration idea? Or would it be the rockstar that committed Discovery abuse (plaintiff requested sanctions) by introducing new evidence during a deposition - They just push the envelope until someone pushes back, it doesn’t make them right.

 

[airjay75]

If there is a legal issue with this implementation, is this what a class action suit is done to address it? Still learning. Iʻm sure there are some attorneys that are willing to pick it up.

Doubtful. There aren't even any damages yet that could be asserted. Maybe in 10 years after millions of money has been paid, some money-hungry, creative lawyer will be interesting in taking this up and former DVC owners will get a postcard in the mail informing them of the $25 Disney Gift Card they can get if they want to stay part of the class and the settlement that has been approved.

I said it in an earlier post, but if someone actually wanted to do something about this and they lived in Florida, I think a more effective path would be lobbying your FL legislator. Bashing a corporation like Disney is a bi-partisan affair, and wouldn't be surprised if some politically motivated state legislator were interested in going after Disney and how it's hurting the "little guy" just trying to make their "dreams come true." If there is something Disney isn't interested in, it's negative attention from politicians. (I'm not saying I support this course of action, just saying I think it would be potentially more effective than a lawsuit.)

 

[juliebee]

They can use the revenue for whatever they want including this.

I am secretly hoping that maybe it will help them increase perks for those eligible for membership extras.

that sounds like a reverse Robin Hood. The resale buyers fund the direct benefits? Sorry, but that sounds ugly.

 

[davidhr]

It won’t impact people who are buying direct or who aren’t selling their points…. which in any given year is the overwhelming majority of the membership.

Not only it won’t impact them. They won’t even know about it and live happily ever after!

 

[Sandisw]

that sounds like a reverse Robin Hood. The resale buyers fund the direct benefits? Sorry, but that sounds ugly.

My point was that whatever profit is made by DVD is theirs to do with what they want.

They don’t have to explain to anyone what they will do with it. Which is what someone was wondering.

This sounds to me like it’s simply a fee to complete the paperwork aspect of it.

Not enough details yet

 

[DanCali]

DVC is not MVC. Also, this fee is even worse for VB or HHI. The direct market is technically dead for both and in resale some loaded VB contracts in the $40s per point struggle to sell without the fee. Assumin the price shoots down. Why would they even ROFR VB and HHI? I know there was a VB ROFR a few months ago, but this was more of a statement to try to regulate the price floor than a financial strategy i.e. when they ROFR Riviera for $110 and reselling in 30 days rdirect for $235.

You add on this $500 resale fee and sure the price will technically go down specially for HHI and VB given that they will become even less attractive. But given their high dues this might create a scenario in which the contracts for these properties might need to be closer to $0 specially as we get cloeer and closer to 2042. I'm not sure this is something Disney will want for the DVC branding.

DVC is not MVC but lessons can be learned and economics can be similar in both directions.

Resale prices probably have little to do with branding since most people don't even know about resale. But it does have to do with strategy and profitability... I just had a MVC presentation (for a $300 "bribe") and pointed out to the guy that it's a nice gig buying resale for $2-$3 at ROFR and selling for $18. His answer was "that's the business model" (while I'm scratching my head thinking why would I want to be on the other side of that transaction and buy direct, especially where their resale points product has zero restrictions after you pay the "junk fee"? ).

In theory that fee can be $500 or $5000 - I don't know of anything that stops that. And if that fee is used to decimate resale prices, those of us who know resale may prefer to buy 5 restricted resale resorts at $50/pt instead of 1 retail resort at $250/pt. The average buyer would still likely buy direct and learn about resale values when they eventually try to sell...

 

[Sandisw]

Doubtful. There aren't even any damages yet that could be asserted. Maybe in 10 years after millions of money has been paid, some money-hungry, creative lawyer will be interesting in taking this up and former DVC owners will get a postcard in the mail informing them of the $25 Disney Gift Card they can get if they want to stay part of the class and the settlement that has been approved.

I said it in an earlier post, but if someone actually wanted to do something about this and they lived in Florida, I think a more effective path would be lobbying your FL legislator. Bashing a corporation like Disney is a bi-partisan affair, and wouldn't be surprised if some politically motivated state legislator were interested in going after Disney and how it's hurting the "little guy" just trying to make their "dreams come true." If there is something Disney isn't interested in, it's negative attention from politicians. (I'm not saying I support this course of action, just saying I think it would be potentially more effective than a lawsuit.)

What I have learned is that if this was a questionable move legally and DVCMC know it’s pushed limits, it wouldn’t even take it…and let’s not go down the political nature please.

It just takes owners to ask them to explain things in more detail with even a mention of a potential conflict against the law.

I trust @drusba and if she sees it as a potential conflict, then it may be worth digging deeper.

My guess is that brokers and title companies, who will also be involved in this, might get more info to help clarify what this fee is for.

ETA: In reading the statute, I see it as the condo association itself charging a fee if they have to approve the sale, or lease of a unit. Meaning, if you need association approval to sell, they can’t charge a fee for that unless the bylaws have it.

This to me doesn’ sound like that. It is simply a a fee to complete the paperwork of the actual transfer once the contract sells.

But, it certainly is an interesting piece to it.