New OKW Info for Non-Extenders

[DVC92]

Responding to a complaint relating to the extension of OKW to 2057, DVD has agreed to provide a developer subsidy to all members who elect to not participate in the extension. The Executive Counsel for WDW, John McGowan stated:
"....we agree that members who elect not to extend should not be required to fund capital repairs after 2042. However, Section 721.13(3)(c)(3), F.S., provides that full funding of reserves can only be waived by a majority of the members. Consequently, as part of the OKW Extension, DVD, as developer, has already agreed with the association to provide a developer subsidy at the appropriate time (the association is obviously not yet funding capital reserves for capital replacements after 2042) to all members who elect not to participate in the OKW Extension. The purpose of the developer subsidy is to pay a portion of such member's capital reserve assessments in an amount sufficient to fully fund capital reserves and to relieve all such members of the obligations to fund capital replacements after 2042. Thus, DVD has committed to the association that neither.....nor any other members who elect not to extend will pay any reserve assessments for capital improvements made after 2042."

 

[DISNEY FIX]

In English please.

 

[rstackjd]

Responding to a complaint relating to the extension of OKW to 2057, DVD has agreed to provide a developer subsidy to all members who elect to not participate in the extension. The Executive Counsel for WDW, John McGowan stated:
"....we agree that members who elect not to extend should not be required to fund capital repairs after 2042. However, Section 721.13(3)(c)(3), F.S., provides that full funding of reserves can only be waived by a majority of the members. Consequently, as part of the OKW Extension, DVD, as developer, has already agreed with the association to provide a developer subsidy at the appropriate time (the association is obviously not yet funding capital reserves for capital replacements after 2042) to all members who elect not to participate in the OKW Extension. The purpose of the developer subsidy is to pay a portion of such member's capital reserve assessments in an amount sufficient to fully fund capital reserves and to relieve all such members of the obligations to fund capital replacements after 2042. Thus, DVD has committed to the association that neither.....nor any other members who elect not to extend will pay any reserve assessments for capital improvements made after 2042."

I AM a lawyer and I don't understand it That guy's good!

 

[vacationman]

I believe this means that because a portion of the annual maintenence fees are set aside for future upkeep/improvements, OKW owners who are not extending past 2042 will receive a rebate of some sort for the portion of their maintenance fee that are for upkeep beyond 2042. I.E., if you pay the fee today, part of what you pay goes for improvements/upkeep in subsequent years. Under this plan, owners with contracts expiring in 2042 will not be paying into a fund for maintenance/upkeep beyond that date.

 

[delmar411]

I believe this means that because a portion of the annual maintenence fees are set aside for future upkeep/improvements, OKW owners who are not extending past 2042 will receive a rebate of some sort for the portion of their maintenance fee that are for upkeep beyond 2042. I.E., if you pay the fee today, part of what you pay goes for improvements/upkeep in subsequent years. Under this plan, owners with contracts expiring in 2042 will not be paying into a fund for maintenance/upkeep beyond that date.

That's what I got from it too. LOL

 

[dvc at last !]

subscribing.....

 

[Caskbill]

They're probably going to do it similar to the way they do the Vero Beach subsidy.

Thus someone who has extended their contract will have slightly higher dues than those who have not extended. This is similar to Vero Beach in that those who purchased earlier do not pay the same dues as those who purchased later.

 

[simzac]

They're probably going to do it similar to the way they do the Vero Beach subsidy.

Thus someone who has extended their contract will have slightly higher dues than those who have not extended. This is similar to Vero Beach in that those who purchased earlier do not pay the same dues as those who purchased later.

Lower dues for those of us who did not extend. I can live with that.

 

[dianeschlicht]

Yep, I can live with that too.

 

[Buckeye Fan]

They're probably going to do it similar to the way they do the Vero Beach subsidy.

Thus someone who has extended their contract will have slightly higher dues than those who have not extended. This is similar to Vero Beach in that those who purchased earlier do not pay the same dues as those who purchased later.

I can understand owners with a 2042 date not paying the same rate as a 2057 expiration date, but I'm not sure I understand the VB subsidy. Whether you purchased when the resort opened or now, both contracts expire in 2042. Can you fill me in on what happened and why the difference? I don't know the history of VB, so maybe it's a similar situation and I just didn't know.

Thanks!

 

[RobDoc]

I can understand owners with a 2042 date not paying the same rate as a 2057 expiration date, but I'm not sure I understand the VB subsidy. Whether you purchased when the resort opened or now, both contracts expire in 2042. Can you fill me in on what happened and why the difference? I don't know the history of VB, so maybe it's a similar situation and I just didn't know.

Thanks!

Originally, the master plan for VB included development of more units and thus more owners to share the infrastructure costs. To make this situation more fair (and as an incentive to buy), early buyers were subsidized by DVD until the additional units were eventually sold. Later, DVD made the decision NOT to build out the original plan (and even sold the property to be used for that purpose), so they have continued the subsidy for those buyers. They also ended the subsidy for those who purchased after 1996 (or so) - thus the difference in annual fees for those groups. The "original" buyers with that subsidy still enjoy it, but I don't believe the subsidy stay with the contract if sold later - so resales don't benefit from the original incentive. Almost all DVC resorts have had some sort of subsidy provided for dues at some time. I believe that some (besides VB) may even have a subsidy for 2008.

The OKW extension is a very different set of circumstances and will not affect any OKW owners until we reach a point where the "Capital Reserve Fund" begins to include maintenance beyond January 31, 2042. This should come into play several years prior to that date, but still not for many years yet, IMO.

The Capital Reserve is not for any "current" operating costs (routine maintenance, housekeeping, front desk, etc.) but does cover anticipated future expenses for replacing roofs, carpeting, HVAC equipment and other long term expenditures. Basically, any of those expenses anticipated after 1/31/42 should be billed only for those who will own after that date. Those choosing NOT to extend will get relief from those costs once they begin.

 

[Buckeye Fan]

Gottcha on the OKW. That makes sense.

As for the VB, I didn't realize that! Thanks for taking the time to explain, as I couldn't understand how VB would differ from any of the other DVC resorts. What would we do without you, Doc???

 

[La2kw]

Lower dues for those of us who did not extend. I can live with that.

 

[SnowWhite2]

I'm a new DVC owner so pardon my ignorance but what happens if you did not extend your contract when 2042 rolls around? Does it just cease to exist? Does DVC purchase it back? I'm assuming the it will have no value as a contract but the points still exist somewhere. Does your contract just end and DVC sells the remaining points/years as a new contract?

 

[CarolMN]

I'm a new DVC owner so pardon my ignorance but what happens if you did not extend your contract when 2042 rolls around? Does it just cease to exist?

Your contract is over. You will no longer have any points or be a member in the DVC (unless you own other contracts that do not end on that date).

Does DVC purchase it back?

There is nothing to purchase - Your contract has no value at the end date.

I'm assuming the it will have no value as a contract but the points still exist somewhere. Does your contract just end and DVC sells the remaining points/years as a new contract?

Unless you extended your contract, Disney/DVC owns the points associated with the remaining 15 years of the lease. They could sell them (at any time) if they choose to do so.