New $500 Resale DVC Transfer Fee

[ChipTheRescueRanger]

I will happily pay the $500 if it means the previous owners rights are passed across in the admin of the account change over.

So Blue cards for all resale buyers if buying a previous direct contract. No resort restrictions.

 

[Sandisw]

Don't want to derail this thread, but those meetings took place right after the new personal use checkbox and we all had many questions about that.

There was only one meeting that happened. It was in June. The September one was canceled because the FL law changed in July back to once a year.

Didn’t sound like the June meetings were well attended either and there were mo reports from the usall sources.

 

[eticketplease]

I will happily pay the $500 if it means the previous owners rights are passed across in the admin of the account change over.

So Blue cards for all resale buyers if buying a previous direct contract. No resort restrictions.

This assumes you’re buying a contract from somebody who bought it directly from Disney. Remember there are plenty of contracts that change hands multiple times long after Disney sold the original one so in that case, the previous owners would not have blue card rights most likely.

 

[Sandisw]

I don't have a strong opinion about the legality of this fee. I can see the argument that it's been done by others for decades and the statute forbids the association to impose a fee and this is a different company.
However, let's reason by absurd. If a $500 fee is legal, why not $1,000? And why not $10,000? A 10k fee would effectively kill the resale market once and for all. It would be an immense win for all timeshare companies. If they can impose any fee they like, then why not 10k? Is it just optics?
Is there a law that allows to impose a fee to recoup the expenses of setting up the membership for a resale buyer? Where is it? Does the process need to be audited to guarantee fairness like the budgets?

And the most important question: why doesn't the DVC management company handles new memberships? Like it has been said, resale buyers are not DVD clients, why is the process of setting them up is handled by DVD instead the DVCMC? I think this could easily be handled by MS CM, within the normal budget.

From what i as told is DVCMC does both. They do the work for DVD and do the work of management of the timeshare for owners.

So, they get their revenue from both and why MA does the administrative work for new memberships, etc for both direct and resale.

Basically, it’s two different “clients”.

However, it does bring up a good question.

Does the contract our condo associations have with DVCMC to manage the program include this as one of their responsibilities required of them as part of the 12% fee?

I don’t believe it does but i dont know for sure.

 

[Sprinkles&Sprints]

I’m late to reading all of this, but I’m in the process of selling one of my contracts with a delayed close after Jan 1 (it already passed ROFR). Will keep everyone posted who - if anyone - is stuck paying the $500.

 

[Sandisw]

I’m late to reading all of this, but I’m in the process of selling one of my contracts with a delayed close after Jan 1 (it already passes ROFR). Will keep everyone posted who - if anyone - is stuck paying the $500.

Hopefully; we have that answer next week since I plan to ask about the fee at the meeting if no one else does first!

 

[Jlo85]

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.

I am skeptical that DVC even runs things by legal before it implements changes. The Aulani subsidized dues scandal and Old Key West extension debacle suggest to me that DVC corporate just throws paint at the wall, hoping it sticks.

 

[Carouselofplanning]

From what i as told is DVCMC does both. They do the work for DVD and do the work of management of the timeshare for owners.

So, they get their revenue from both and why MA does the administrative work for new memberships, etc for both direct and resale.

Basically, it’s two different “clients”.

However, it does bring up a good question.

Does the contract our condo associations have with DVCMC to manage the program include this as one of their responsibilities required of them as part of the 12% fee?

I don’t believe it does but i dont know for sure.

Look the fee is most likely yet another measure designed to discourage resale. It’s a priority for them. It’s viewed as a direct competitor to DVD not as a customer base. They. Do. Not. Want. People. Buying. Resale. They can’t forbid it, but they don’t stop taking away its attractiveness where they can. This indirectly also hurts direct buyers but they, by and large, might not realize it yet. You want to sell? Here’s a fee. You want to add a few more points via resale to supplement your portfolio? Here’s a fee.

There is a tipping point where this treatment as a whole damages the core product and will start to limit their ability to increase pricing. That’s probably why the countermeasures happen gradually but persistently so the market acclimates to the product restriction with as minimal impact to pricing (and really, direct sales volume) as possible.

Kudos to the owners who know the law of this stuff and push back when appropriate. I have no idea whether this latest move is within their rights or not but someone raised a good point that is unsettling for direct and resale owners alike - what’s to stop them from making this fee $1000 or $10000? Imagine needing to sell due to life circumstances but Disney put in a price control that completely chills the resale market? I’m not so sure they understand people will eventually start looking at them like the snake oil salesman in the rest of the timeshare industry. Or if they do realize this, they simply don’t care.

They created their own problem with all of this. Timeshare now pays for hotel development. They don’t develop non DVC hotels anymore. This has the unintended side effect of having an incredible amount of inventory at their own resorts that they don’t control. So now they need to target “commercial renters” (the definition of which remains undefined). And, don’t hurt my direct sales volume, so we need to target resale as well with endless fees and restrictions. I don’t think DVC when it was founded was intended to be an endless supply of new hotel rooms.
That’s yet another piece to the value puzzle: supply. Disney hotel rooms (including DVC contracts) are valuable due to their limited supply. Keep adding supply - what happens? Demand eventually goes down. It’s basic economics. The idea that Disney World can sell an unlimited supply of hotel rooms and contracts is absolutely foolish.

Yet here we are with the unique set of problems this approach has created.

This is a side issue but I do think once Lakeshore is done they should take a very long pause on new development. Something tells me though they are getting ready to rip into a crescent lake resort next to add inventory.

Morning rant over.

 

[Carouselofplanning]

I am skeptical that DVC even runs things by legal before it implements changes. The Aulani subsidized dues scandal and Old Key West extension debacle suggest to me that DVC corporate just throws paint at the wall, hoping it sticks.

To be fair to lawyers they generally stink at math. That was a math mistake. Likely an accounting screw up.

 

[airjay75]

As a lawyer who has worked at a law firm in private practice, for the federal government, and in-house for a large corporation, I'll just say this.

Incompetence, negligence, and mistakes exist at all levels of every organization. With lawyers, with non-lawyers, in consultation with lawyers, without consulting lawyers, ignoring lawyers, not even knowing were there lawyers to consult. At the lowest levels and at the highest levels. No organization or profession is immune to these things. Expect the worst (hope for the best ) and you'll never be disappointed.

Of course, none of that means this $500 fee or any other action taken by Disney is anything other than legal and proper. From what I've read from others on this thread, seems like there are some conflicts among some of the statutes, and the fact that other timeshares do this (and have yet to be challenged) suggests they are probably within their legal rights to do this. But, that doesn't mean it is an air-tight legal argument either that the right person or groups of persons could not challenge. There are plenty of things that happen in industry where the legal rationale is debatable, but the fact that competitors do it give other companies comfort to follow suit and do the same thing. Sometimes those practices come tumbling down and sometimes they don't.

 

[mkatsy]

Look the fee is most likely yet another measure designed to discourage resale. It’s a priority for them. It’s viewed as a direct competitor to DVD not as a customer base. They. Do. Not. Want. People. Buying. Resale. They can’t forbid it, but they don’t stop taking away its attractiveness where they can. This indirectly also hurts direct buyers but they, by and large, might not realize it yet. You want to sell? Here’s a fee. You want to add a few more points via resale to supplement your portfolio? Here’s a fee.

There is a tipping point where this treatment as a whole damages the core product and will start to limit their ability to increase pricing. That’s probably why the countermeasures happen gradually but persistently so the market acclimates to the product restriction with as minimal impact to pricing (and really, direct sales volume) as possible.

Kudos to the owners who know the law of this stuff and push back when appropriate. I have no idea whether this latest move is within their rights or not but someone raised a good point that is unsettling for direct and resale owners alike - what’s to stop them from making this fee $1000 or $10000? Imagine needing to sell due to life circumstances but Disney put in a price control that completely chills the resale market? I’m not so sure they understand people will eventually start looking at them like the snake oil salesman in the rest of the timeshare industry. Or if they do realize this, they simply don’t care.

They created their own problem with all of this. Timeshare now pays for hotel development. They don’t develop non DVC hotels anymore. This has the unintended side effect of having an incredible amount of inventory at their own resorts that they don’t control. So now they need to target “commercial renters” (the definition of which remains undefined). And, don’t hurt my direct sales volume, so we need to target resale as well with endless fees and restrictions. I don’t think DVC when it was founded was intended to be an endless supply of new hotel rooms.
That’s yet another piece to the value puzzle: supply. Disney hotel rooms (including DVC contracts) are valuable due to their limited supply. Keep adding supply - what happens? Demand eventually goes down. It’s basic economics. The idea that Disney World can sell an unlimited supply of hotel rooms and contracts is absolutely foolish.

Yet here we are with the unique set of problems this approach has created.

This is a side issue but I do think once Lakeshore is done they should take a very long pause on new development. Something tells me though they are getting ready to rip into a crescent lake resort next to add inventory.

Morning rant over.

Yes, all this ^^^ I have no problem reimbursing them for their administrative expenses to transfer the contracts. But let’s be honest, that’s probably $50 at best. The rest is slush … unearned income … a privilege tax to use a product that you have already purchased.

 

[intamin]

I will happily pay the $500 if it means the previous owners rights are passed across in the admin of the account change over.

So Blue cards for all resale buyers if buying a previous direct contract. No resort restrictions.

Yeahhhh that's never going to happen.

 

[Sandisw]

Just to add to my previous comment…the budget documents describes that services provided for our 12# to be in accordance to the property management contract.

Therefore, specific duties our 12% fee covers would be there.

I response to motivation and whether it’s appropriate or not?

Everyone can decide that themselves. But yes, DVD is a developer wanting to sell timeshares so making what you get from there different makes sense.

It’s been 13 years since they began it. If this fee is what I expect it will be, then if they have decided that absorbing the cost to handle it from other revenue is no longer desired, then it is what it is

As long as they are allowed to charge it as part of the process after an ownership interests has changed hands.

 

[Sandisw]

As a lawyer who has worked at a law firm in private practice, for the federal government, and in-house for a large corporation, I'll just say this.

Incompetence, negligence, and mistakes exist at all levels of every organization. With lawyers, with non-lawyers, in consultation with lawyers, without consulting lawyers, ignoring lawyers, not even knowing were there lawyers to consult. At the lowest levels and at the highest levels. No organization or profession is immune to these things. Expect the worst (hope for the best ) and you'll never be disappointed.

Of course, none of that means this $500 fee or any other action taken by Disney is anything other than legal and proper. From what I've read from others on this thread, seems like there are some conflicts among some of the statutes, and the fact that other timeshares do this (and have yet to be challenged) suggests they are probably within their legal rights to do this. But, that doesn't mean it is an air-tight legal argument either that the right person or groups of persons could not challenge. There are plenty of things that happen in industry where the legal rationale is debatable, but the fact that competitors do it give other companies comfort to follow suit and do the same thing. Sometimes those practices come tumbling down and sometimes they don't.

I think the hard part with DVC, at least IMO, is that everything is intertwined, with the same people wearing different hats.

Board members of the associations are also executives with DVCMC LLC.

They wear different hats. And, when I evaluate actions I try to see what hat is being worn

If this fee was being charged by DVMC on behalf of the association, then it seems the statute might kick in.

If it’s just DVCMC LLC for work they are doing that is outside of its duties for the association then it might not apply.

We shall see what info we get next week, if not before

In the end, they are a business and the decisions they make have consequences that might turn out to drive people away from their product.

 

[mkatsy]

I think the hard part with DVC, at least IMO, is that everything is intertwined, with the same people wearing different hats.

Board members of the associations are also executives with DVCMC LLC.

They wear different hats. And, when I evaluate actions I try to see what hat is being worn

If this fee was being charged by DVMC on behalf of the association, then it seems the statute might kick in.

If it’s just DVCMC LLC for work they are doing that is outside of its duties for the association then it might not apply.

We shall see what info we get next week, if not before

In the end, they are a business and the decisions they make have consequences that might turn out to drive people away from their product.

But if it’s a reimbursement for work incurred on our behalf, there should be matching payroll expenses. That’s easy to understand. Where the rest of the money is going (assuming they don’t pay their clerks $1000 an hour) is where it gets muddy.

 

[zavandor]

I think the hard part with DVC, at least IMO, is that everything is intertwined, with the same people wearing different hats.

Board members of the associations are also executives with DVCMC LLC.

They wear different hats. And, when I evaluate actions I try to see what hat is being worn

If this fee was being charged by DVMC on behalf of the association, then it seems the statute might kick in.

If it’s just DVCMC LLC for work they are doing that is outside of its duties for the association then it might not apply.

We shall see what info we get next week, if not before

In the end, they are a business and the decisions they make have consequences that might turn out to drive people away from their product.

I think Members Accounting CM deal with all sort of queries from members, i.e. for the association. And they are the same people who set up the accounts. It means that DVD is going to say: this portion of the day they work for the association and are paid by the 12%, this other portion of the day they set up an account and are paid by DVD which needs to be reimbursed with the $500 fee. But we don't know what that portion is, depending on how many resale contracts are sold they may work for the association or they may not. It's a bit murky.
And anyway, I do not understand why the association cannot deal with setting up accounts for resale purchasers instead of DVD. Since DVD now wants a fee to to that (with the same people that work for the association), then in the interest of members, the DVCMC should take the decision of doing it themselves.

 

[Cyberc1978]

. From what I've read from others on this thread, seems like there are some conflicts among some of the statutes, and the fact that other timeshares do this (and have yet to be challenged) suggests they are probably within their legal rights to do this. But, that doesn't mean it is an air-tight legal argument either that the right person or groups of persons could not challenge. There are plenty of things that happen in industry where the legal rationale is debatable, but the fact that competitors do it give other companies comfort to follow suit and do the same thing. Sometimes those practices come tumbling down and sometimes they don't.

could be other timeshares are not condominiums as DVC are. If so that alone could answer the questions why others do it but DVC can’t.

 

[Sandisw]

But if it’s a reimbursement for work incurred on our behalf, there should be matching payroll expenses. That’s easy to understand. Where the rest of the money is going (assuming they don’t pay their clerks $1000 an hour) is where it gets muddy.

DVCMC LLC is simply the company that the association hires to provide management for the program. Nothing more, nothing less.

How they structure their business isn't up to us, no more than it would be for parks & resorts, etc. The only thing we have a say in is sharing our opinions about the rules and regulations they set up, as well as asking for them to verify that the decisions they are making are not in violation of the contract and/or lw.

Beyond that? Nope. It's a straight 12% and they do not have to account for how they spend it. As long as the work that this fee is going to be covering is not included in the agreement with have with them, then it moves to whether or not they can charge a few as part of the closing process after an ownership interest changes hands.

As I said, DVCMC LLC works to manage the DVC program at each resort as well as does work for DVD, the developer, along with other tasks...like servicing loans, etc. Not all of that work is related to what we are paying them for.

 

[mkatsy]

DVCMC LLC is simply the company that the association hires to provide management for the program. Nothing more, nothing less.

How they structure their business isn't up to us, no more than it would be for parks & resorts, etc. The only thing we have a say in is sharing our opinions about the rules and regulations they set up, as well as asking for them to verify that the decisions they are making are not in violation of the contract and/or lw.

Beyond that? Nope. It's a straight 12% and they do not have to account for how they spend it. As long as the work that this fee is going to be covering is not included in the agreement with have with them, then it moves to whether or not they can charge a few as part of the closing process after an ownership interest changes hands.

As I said, DVCMC LLC works to manage the DVC program at each resort as well as does work for DVD, the developer, along with other tasks...like servicing loans, etc. Not all of that work is related to what we are paying them for.

I probably wasn’t clear. I’m not talking about the 12% flat rate we pay. I’m talking about the new $500 fee for 1/2 hour (at best) of work to change the name on an account. It feels incestuous that the people we pay to represent our interests, agreed to a grossly inflated fee, that the other entity they represent benefits from. They dismissed our fiduciary interest to favor the fiduciary interest of their other client.

 

[Sandisw]

I think Members Accounting CM deal with all sort of queries from members, i.e. for the association. And they are the same people who set up the accounts. It means that DVD is going to say: this portion of the day they work for the association and are paid by the 12%, this other portion of the day they set up an account and are paid by DVD which needs to be reimbursed with the $500 fee. But we don't know what that portion is, depending on how many resale contracts are sold they may work for the association or they may not. It's a bit murky.
And anyway, I do not understand why the association cannot deal with setting up accounts for resale purchasers instead of DVD. Since DVD now wants a fee to to that (with the same people that work for the association), then in the interest of members, the DVCMC should take the decision of doing it themselves.

My understanding is that it has always been that way. If you have sections of the division that handle work for different tasks, some that are related to the program, like dues, and such, and others are not, like the servicing of loans, etc., then they can decide how to cover those. Similar to how a share resort functions....each gets charged their share....

It is why MS CM's can handle booking of special events for things like MM becaues they are funded by both dues and DVD.

Bas on what I have gathered, DVCMC LLC gets their earnings from different sources.

They earn the 12% of the operating budget for each association, they earn money from rentals from their points, they earn money from DVD to handle their adminstrative tasks, and they get money from breakage. Its possible they get funding from others as well.

As I have mentioned, DVCMC does not have to account for how they spend our 12%....they just have to provide us with the service that is contracted for.

I am in the process of trying to find my hard copy of the property management agreement, just to see what it says. But, if there is nothing in there that says that we are paying them already for whatever they are charging for....and we are still waiting to get more information on exactly what it is.

Could they simply continue to do it like always? Yes, but it means the cost comes out of their earnings and why would they do that? Why would they take on the extra costs for something they are not contracted to do....assuming I am correct in that the property management agreement does not already list this as a responsbility for them.

All of this is assuming that the statute that was brought up does not apply....which, as I said, I am leaning toward it not because its not the association instituting a fee....and its not really much different than the title companies charging for their role in the process, other than its DVCMC. But, that would be a legal issue for others to figure out.

Let's be honest....DVCMC isn't going to increase thier costs to reduce their profit unless they are obligated to do it. Obviously, up until now, the cost to do this has been rolled into DVCMC's budget....for whatever reason, they now plan to charge for the work.