New Timeshare Legislation

[tjkraz]

My bet is that existing owners will get a free extension at 2042 resorts they expand at:

That would be something, wouldn't it?

Not sure I buy it, though. DVD would be leaving an awful lot of money on the table. If they were going to offer free extensions, why add units to an existing resort in the first place? Let that VWL contract run-out entirely and then re-sell in '42.

(What's better than investing $25 to earn $165? How about spending $0 to earn....whatever points will cost in another 25 years.)

All of those free years given away would immediately hurt the profitability of a resort expansion.

As for special assessments, I'm inclined to think that DVD would face a legal / regulatory opposition this time around. Disney issued a mea culpa after OKW claiming "we'll do it different next time." If they resort to the same heavy-handed methods again, I think owners will be much more assertive and organized in collectively voicing their displeasure. Not just owners of the one resort being extended but EVERYONE who sees their property as an eventual target.

Not saying that any such challenge will be successful, but it will be public. It will involve the Florida Timeshare Commission and possibly the courts. And it will be newsworthy...at least locally if not nationally. (Disney would have to ask itself how much of a black eye they could withstand for a product which typically starts around $20,000. Buyers are assigning an awful lot of goodwill to Disney even now when paying those prices.)

Maybe my DVC goggles are impacting my vision but I think this would be a much bigger stink than other tempest-in-a-teapot issues like MagicBands or DDP changes which have been known to get fanboys riled-up.

Disney could be taking a two-pronged approach to the changes. First get lawmakers to approve the ability to extend and then address the finances in a later revision.

 

[YourEveryDayAdam]

That would be something, wouldn't it?

Not sure I buy it, though. DVD would be leaving an awful lot of money on the table. If they were going to offer free extensions, why add units to an existing resort in the first place? Let that VWL contract run-out entirely and then re-sell in '42.

The main reason for adding to an existing resort is that where are they going to add new DVC rooms now that DVC exists at all deluxe resorts? (except Yacht club) They could build a new standalone DVC resorts, but the general opinion of SSR and OKW isn't as high as the resorts that shares with a cash deluxe hotel.

I think Disney wants to add rooms to resorts that already have a DVC component, but the concern for buyers will be "why am I going to buy these points when the expiration date at the resort is 25 years or less? I will get nearly 50 years out of my BLT and AKV contracts, but if my contracts expired in 2035 instead of 2060 I would've been hesitant to buy...especially at the price I did buy at.

Basically DVD is out of places to build new resorts at WDW. They could get away with building BLT 2, and add more rooms to SSR, AKV, GFV, and PVB without having to worry about the expiration date of the resorts...but anything older than that and I think they will run in to the fact that new points at those resorts will have short expirations that would discourage some buyers or not allow them to charge as much as they've become accustomed.

 

[Dean]

It allows timeshares over 20 yrs old to change the length of terms of their contracts, to either terminate them (for example, to eliminate an in perpetuity timeshare that is lapidated) or to extend (for example, if you're adding new timeshare units and want to unilaterally extend current owners to a new 50 yr contract so that you have MF payers for the whole length of the new term).

And, if your contract allows for special assessments (and if you have a DVC contract, yours does), then those newly minted years will come at a mandatory price. Pay, sell or foreclose.

One point of clarification. The current contracts allow for SA for certain things only. That was my big beef with the strong arm tactic on the OKW expansion, they do not legally have the right to levy a SA for that purpose as I read it.

 

[tjkraz]

The main reason for adding to an existing resort is that where are they going to add new DVC rooms now that DVC exists at all deluxe resorts? (except Yacht club) They could build a new standalone DVC resorts, but the general opinion of SSR and OKW isn't as high as the resorts that shares with a cash deluxe hotel.

That has more to do with the location and condo-style development of SSR and OKW than the mere fact that they are standalone DVC resorts.

Disney certainly has the land, money and expertise to build another DVC property which is on-par with their Deluxe resorts. But generally speaking, they've chosen not to do so.

I think Disney wants to add rooms to resorts that already have a DVC component, but the concern for buyers will be "why am I going to buy these points when the expiration date at the resort is 25 years or less? I will get nearly 50 years out of my BLT and AKV contracts, but if my contracts expired in 2035 instead of 2060 I would've been hesitant to buy...especially at the price I did buy at.

For the most part, I agree. What I disagree with is the idea that Disney plans to give away the extension years for free.

 

[ziravan]

For the most part, I agree. What I disagree with is the idea that Disney plans to give away the extension years for free.

There's some intermediate step between this law and reality that we can't see.

This law is designed to allow for the extensions. DVC has something in mind that will allow them to make money.

I'm sure DVC has learned its lessons from OKW. The extensions will not be voluntary.

I'm sure they won't be quite as ham-handed as I suggested. But. DVC has an argument to make that extensions would be good for most owners. There has to be an angle to sell that.

Changing the law means Disney has a plan.

It does sound like extensions are coming, at least at VWL. It'll be interesting to see how.

 

[lawgator]

It allows timeshares over 20 yrs old to change the length of terms of their contracts, to either terminate them (for example, to eliminate an in perpetuity timeshare that is lapidated) or to extend (for example, if you're adding new timeshare units and want to unilaterally extend current owners to a new 50 yr contract so that you have MF payers for the whole length of the new term).

And, if your contract allows for special assessments (and if you have a DVC contract, yours does), then those newly minted years will come at a mandatory price. Pay, sell or foreclose.

Just looked up the history of the legislation. SB 932 was laid on the table 4/29/15 and HB 453 was substituted. HB 453 was ordered enrolled. The HB is applicable to timeshares over 25 years rather than 20 years, as in the SB (not that it really makes that much difference).

 

[ziravan]

Just looked up the history of the legislation. SB 932 was laid on the table 4/29/15 and HB 453 was substituted. HB 453 was ordered enrolled. The HB is applicable to timeshares over 25 years rather than 20 years, as in the SB (not that it really makes that much difference).

That actually does make a big difference. VWL won't be twenty until 2020 and BCV until 2022. Add five more years to each of those and it looks like the timeline is much more difficult to strictly apply to upcoming DVC expansions.

 

[lawgator]

ziravan, post: 53644306, member: 511897"]That actually does make a big difference. VWL won't be twenty until 2020 and BCV until 2022. Add five more years to each of those and it looks like the timeline is much more difficult to strictly apply to upcoming DVC expansions.[/QUOTE]
I didn't really think about those resorts,, but of course you are right. We have a couple of older unextended okw contracts which could be impacted sooner by this legislation depending on what DVD decides to do. We also have 4 very small okw contracts that my sister already paid to extend (with her kids in mind) way back when they offered that option to OKW owners. It will be interesting to see what happens.