OKW 2042 - 2057 deed

[LIFERBABE]

DVC Mike,

Do I sense a little sarcasm in your post? The courts are filled awaiting rulings of differing interpretations of contracts and contract law. Perhaps many of these good folks have read the POS and happen to have a differing interpretation. Even if they haven't, maybe all they are doing, in their own way, it trying to seek out answers. But with all due respect, your sarcasm is out of line.

Well guess what, I too have read the OKW POS. I appreciate the response from TJKraz and his conveyance of his interpretation. I happen to disagree with it but nonetheless still appreciate it. I can disagree with someone and still show them respect. In the end, this may not be about whether it's legal or not, but it definitely will be about whether it was the right way for DVC to do it. DVC members will vote with their $$$ when they decide what to do. From your signature, I see you don't own at OKW. Maybe a little compassion for those struggling with how they will address this. For me personally, this is a $25,000 decision. If they expand it to other resorts, my obligation will more than double. In the end what DVC is doing might be ruled legal, but the real question is was what they did the right way to do it. I imagine they'll have their answer round about February 29, 2008. Just because a company is within their rights, doesn't make the way they go about doing it right.

Gee, maybe the owners are just excercising their rights

ATCMickey

I completely agree!! All contracts were made to be litigated and if DVC wants to bring out the hammer and start pounding us over the head with it, then see how many stick around for that. Regardless of contracts, right is right and wrong is wrong. They can vote on Feb 29th, we will vote with our pockets.
Membership is magical, and I dont need a lawyer or a contract to tell me when the magic is gone.
And we as owners have every right to discuss this and talk about our options and actions.
We dont have to agree, but we are all members and my ownership is minimal in OKW, but I do empathize with those left to wonder the fate of their points and value because of DVD's proposed actions.

 

[fwm]

Apparently I am confused. I don't see how this offer affects the magic of Disney. If it does, then time to sell.
DVC will extend duration of the timeshare. If you want the benefit of the extension you opt to pay the fee. If you do not want the extension, for whatever reason, you sign the paperwork and send it back. If you pay you have an extended right for 15 extra years. If not, then the timeshare right terminates in 2042, as it would if nothing happened. Your choice

Contracts are not made to be litigated. They are made to define the rights between two parties. Disney apparently has the right to extend the term. Each owner has the right to accept or reject the benefit of the extended term.
Each point gives the same right to use at OKW now as it will until 2042. Whether market value changes, who knows. I happen to think this will enhance marketvalue in the long run.

 

[larrytau]

Well-stated, fwm. We get our pick of how long we want the contract to last, as opposed to what we have now: 2042.

While it has been fun reading all the different possibilities and financial assumptions that have been made, we are trying to forecast the "environment" of Disney thirty-five years from now. Since we can't forecast very well one year down the road, our SWAGs really are more WAGs, and probably not very good ones at that! But, it has made for some interesting reading!!

Apparently I am confused. I don't see how this offer affects the magic of Disney. If it does, then time to sell.
DVC will extend duration of the timeshare. If you want the benefit of the extension you opt to pay the fee. If you do not want the extension, for whatever reason, you sign the paperwork and send it back. If you pay you have an extended right for 15 extra years. If not, then the timeshare right terminates in 2042, as it would if nothing happened. Your choice

Contracts are not made to be litigated. They are made to define the rights between two parties. Disney apparently has the right to extend the term. Each owner has the right to accept or reject the benefit of the extended term.
Each point gives the same right to use at OKW now as it will until 2042. Whether market value changes, who knows. I happen to think this will enhance marketvalue in the long run.

 

[DVC92]

Whether or not you believe this action on the part of Disney is a good deal to accept or not is missing the point. The issue is whether or not Disney has the right to do it. OKW contracts specifically ended the Condominium in 2042 and contained no clause giving Disney the discretion to alter that. If they are allowed to unilaterally alter other portions of the contract that they haven't legally already reserved the right to do, then in the future they may take some action you object to. In effect, we have no contract and have issued a blank check to Disney.

In the very least, if this action is upheld, there should be a two-tier annual fee schedule for the different end years. If you decline the extension and deed it back to Disney, they become a co-owner in your particular interest. I don't know of any precedent for recording deeds for property that conveys 35 years down the road. As such, they need to be putting in their fair share of the annual dues now and not in 2042.

 

[fwm]

Whether or not you believe this action on the part of Disney is a good deal to accept or not is missing the point. The issue is whether or not Disney has the right to do it. OKW contracts specifically ended the Condominium in 2042 and contained no clause giving Disney the discretion to alter that. If they are allowed to unilaterally alter other portions of the contract that they haven't legally already reserved the right to do, then in the future they may take some action you object to. In effect, we have no contract and have issued a blank check to Disney.

In the very least, if this action is upheld, there should be a two-tier annual fee schedule for the different end years. If you decline the extension and deed it back to Disney, they become a co-owner in your particular interest. I don't know of any precedent for recording deeds for property that conveys 35 years down the road. As such, they need to be putting in their fair share of the annual dues now and not in 2042.

I suggest you call DVC and speak to someone in the legal department. I assume they can explain the basis for doing this. Otherwise, good luck with challenging this. It will not be inexpensive.

 

[DVC Mike]

In the end, this may not be about whether it's legal or not, but it definitely will be about whether it was the right way for DVC to do it. DVC members will vote with their $$$ when they decide what to do. From your signature, I see you don't own at OKW. Maybe a little compassion for those struggling with how they will address this. For me personally, this is a $25,000 decision. If they expand it to other resorts, my obligation will more than double. In the end what DVC is doing might be ruled legal, but the real question is was what they did the right way to do it. I imagine they'll have their answer round about February 29, 2008. Just because a company is within their rights, doesn't make the way they go about doing it right.

Gee, maybe the owners are just excercising their rights

So, you're OK with DVC extending the OKW contract -- just unhappy with the way they are doing it? What is your view of the right way to extend OKW that would have made you happy?

Again, if you don't want the extension and you want your original contract to end in 2042 as originally planned -- decline the extension and sign your rights for the extension over to Disney.

I just don't get the anger at DVC over this OKW extension...

 

[DVC Mike]

It's in Section 17.2 Expirtion of Ground Lease. I'm not going to type the entire thing but here is part:

"If DVD renews the Ground Lease or enters into another lease of the property underlying the Condominium prior to the expiration or termination of the Ground Lease, DVD may, in DVD's sole, absolute and unfettered discretion, unilaterally elect to continue the Condominium for the duration of such renewal."

It goes on to say that all owners contracts are automatically extended until the ending date of the new lease. It doesn't specifically state that there are costs associated with the extension, nor does it state that the extension will be free to owners.

In another passage regarding dues and fees the POS states that members are responsible for all costs associated with the Ground Lease. Put the two together and you've got DVD with the ability to extend the lease and pass along the cost to members.

If DVD were not offering members a way avoid the fees, then perhaps it would be worthy of a challenge. But given that DVD is offering an "out" which will require little more than a few signatures and a notarization (if that, since we still have NO idea what will actually be required), I think Disney is on solid footing here.

The only issue I would have concerns the dues in the latter years of the contract. If I were an owner at OKW, that's the question I would pose to them before agreeing to anything.

I found this same clause in the Component Site POS for BWV, VWL, BCV, and AKV, so it's not just in the SSR Component Site POS. I wonder if there is an amended OKW Component Site POS that has similar language?

This seems to give Disney the right to extend these five DVC resort contracts, with no right to opt out.

At least Disney is offering OKW owners an opt out. The only point I've heard thus far that I view as a valid complaint is the maintenance fees in the last years leading up to 2042 for those members who opt out of the extension.

 

[LakeAriel]

will they do this at all 2042 resorts? i am waiting to close on 210 vwl points, just passed rofr.

Congratulations!!!!

I think!

 

[DVC92]

I found this same clause in the Component Site POS for BWV, VWL, BCV, and AKV, so it's not just in the SSR Component Site POS. I wonder if there is an amended OKW Component Site POS that has similar language?

This seems to give Disney the right to extend these five DVC resort contracts, with no right to opt out.

At least Disney is offering OKW owners an opt out. The only point I've heard thus far that I view as a valid complaint is the maintenance fees in the last years leading up to 2042 for those members who opt out of the extension.

Having been a member of OKW since its inception, I've found no evidence of any extension language in my POS or any amendments to it in that regard. This is probably why I suspect that they are attempting to extend the OKW contracts in this manner and are offering an opt out. Otherwise, they would simply extend all OKW contracts and charge the assessment fee. If, as you say, all the other POSes have the extension clause, and it is legal, then Disney has the authority to extend to infinity and beyond the contracts and charge any fee they desire. Absent selling, which may become an impossibilty if potential buyers become aware of this practice, you and your heirs will become forever indebted to Disney for your contract will have no end.

Simply because Disney has put this clause in your contracts doesn't mean it will withstand a legal test. I know of nothing in contract law which permits open-ended terms such as this. I believe it is definitely something to be concerned about, since it is now clear that they intend to keep DVC in operation longer than they originally planned. OKW is just the trial balloon, and if they accomplish it there with this suspect procedure, it will be full steam ahead with no contractual obstacles in the other resorts.

 

[salmoneous]

This seems to give Disney the right to extend these five DVC resort contracts, with no right to opt out.

At least Disney is offering OKW owners an opt out.

I'm pretty sure that not a single person bought into DVC thinking that Disney had the right to extend our contracts and force us to pay for it. Did you?

Disney now seems to be claiming that right. That's what has some of us a bit upset. Do you think Disney should have that right? If they do have it, should they make it pretty darn clear to anyone thinking about buying into DVC.

It's a pretty extraordinary claim. Walmart can't for us to buy more stuff from them because we bought there last week. If we buy a car from Ford, we can't be forced to buy another car from them to replace it. Yet Disney seems to be claiming - and you seem happy that they are doing it! - that they can force us to pay now for more DVC years when our current years run out. That's upsetting, don't you think?

Sure *this time* Disney is offering an opt out. What's going to happen the next time?

 

[fwm]

I have the 10/99 OKW POS.
In Para 3 of the Statement Text, the duration is defined as through 1/31/42, the expiration date of the Ground Lease, ...unless the term is otherwise extended in accordance with the Condominium Documents."

17.2 of the Declaration of Condominium states that "upon the termination or expiration of the term of the Ground Lease, this Condominium shall automatically terminate..." 1 of the Declaration of Condominium also indicates that the Ground Lease ends 1/31/42. 16.1 of the Declaration of Condominium allows the Declaration to be amended in accordance with the Bylaws by affirmative majority vote of the Owners(which is stated in the Bylaws to be by the Voting representative).

Thus it appears that DVD has the right to extend the Ground Lease and the Owners have the right to accept this as an amendment. If the duration is extended, then the Ground lease does not "expire" until 2057. Therefore the Condominium does not terminate until 2057.

Whether the Special Assessment is appropriate is a different issue, but is likely acceptable given the ability to opt out.

 

[fwm]

I have the 10/99 OKW POS.
In Para 3 of the Statement Text, the duration is defined as through 1/31/42, the expiration date of the Ground Lease, ...unless the term is otherwise extended in accordance with the Condominium Documents."

17.2 of the Declaration of Condominium states that "upon the termination or expiration of the term of the Ground Lease, this Condominium shall automatically terminate..." 1 of the Declaration of Condominium also indicates that the Ground Lease ends 1/31/42. 16.1 of the Declaration of Condominium allows the Declaration to be amended in accordance with the Bylaws by affirmative majority vote of the Owners(which is stated in the Bylaws to be by the Voting representative).

Thus it appears that DVD has the right to extend the Ground Lease and the Owners have the right to accept this as an amendment. If the duration is extended, then the Ground lease does not "expire" until 2057. Therefore the Condominium does not terminate until 2057.

Whether the Special Assessment is appropriate is a different issue, but is likely acceptable given the ability to opt out.

 

[jarestel]

I'm pretty sure that not a single person bought into DVC thinking that Disney had the right to extend our contracts and force us to pay for it. Did you?

When someone is actually forced to purchase the extension, there will be a whole lot of new recruits to your position, salmoneous. But as long as the option of "opting out" exists (and it does at the moment), I'm not quite ready to grab the pitchfork and fire up the torches. [But I AM keeping them handy, just in case!]

 

[DVC Mike]

When someone is actually forced to purchase the extension, there will be a whole lot of new recruits to your position, salmoneous. But as long as the option of "opting out" exists (and it does at the moment), I'm not quite ready to grab the pitchfork and fire up the torches. [But I AM keeping them handy, just in case!]

That's why I'm not upset at DVC for the OKW extension. True, I don't own there and have no vested interest, but they may do the same with other resorts in the future.

As long as DVC gives owner's the right to "opt-out", I don't understand why there is a problem

All my Component Site POS (AKV, VWL, BWV, and BCV) are all shown as "Revised 12/2006". This leads me to believe that DVC does revise them. My guess is that the OKW POS probably has the same phrases about DVC having the right to extend the ground lease and thus the condominium.

If someone has purchased or added-on at OKW in the past 6 months, perhaps they could check their Component POS and see what it says?

 

[simzac]

When someone is actually forced to purchase the extension, there will be a whole lot of new recruits to your position, salmoneous. But as long as the option of "opting out" exists (and it does at the moment), I'm not quite ready to grab the pitchfork and fire up the torches. [But I AM keeping them handy, just in case!]

The letter I received from DVC said nothing about being forced to pay for the extension, I can opt out if I want to. Where is this thought process coming from. I just don't get this line of thinking.

 

[castleri]

The letter I received from DVC said nothing about being forced to pay for the extension, I can opt out if I want to. Where is this thought process coming from. I just don't get this line of thinking.

The same place that the one about having to pay for something you can't use for 35 years does. Didn't we all do that to begin with? I paid for a contract that was good for 45 years from the day I bought it - I can only use up to 3 years at a time by banking and borrowing so essentially paid for many years that I can't use yet. Right now I have 34 years of points that I cannot use yet. If I opt for the additional 15 years I will have 49 years of points I can't use - just a longer time frame. Since I will be 99 in 2042 I will probably not be extending my OKW contract unless someone can show me that spending the extra now will get me that money back when and if I decide to sell 15 years from now. Think I will just buy a few AKV points for the 11 month window instead.

 

[DVC92]

When someone is actually forced to purchase the extension, there will be a whole lot of new recruits to your position, salmoneous. But as long as the option of "opting out" exists (and it does at the moment), I'm not quite ready to grab the pitchfork and fire up the torches. [But I AM keeping them handy, just in case!]

With respect to OKW, Disney is only offering the opt out because they are attempting to extend the contracts in a suspect manner. It seems to me that any new contracts allows them to extend without an opt out and without any restriction on fees for the extension. Whether or not they would be so greedy remains to be seen.

Also, even if legal, I don't understand why some think this is no big deal. Assume, for the sake of discussion, that no one in OKW opts to extend the lease. In 2022, new roofs with a 20 year life expectancy are put on all buildings. No further reserves are needed for the roofs, or if they are still collected and never used by 2042, all members will split the remaining reserve funds for the roofs. Disney is not putting any money into the reserves. However, if the lease extends to 2057, Disney will use it to put new roofs on for themselves. Disney has not offered to set up a two-tier maintenance schedule.

 

[DVC92]

I have the 10/99 OKW POS.
In Para 3 of the Statement Text, the duration is defined as through 1/31/42, the expiration date of the Ground Lease, ...unless the term is otherwise extended in accordance with the Condominium Documents."

17.2 of the Declaration of Condominium states that "upon the termination or expiration of the term of the Ground Lease, this Condominium shall automatically terminate..." 1 of the Declaration of Condominium also indicates that the Ground Lease ends 1/31/42. 16.1 of the Declaration of Condominium allows the Declaration to be amended in accordance with the Bylaws by affirmative majority vote of the Owners(which is stated in the Bylaws to be by the Voting representative).

Thus it appears that DVD has the right to extend the Ground Lease and the Owners have the right to accept this as an amendment. If the duration is extended, then the Ground lease does not "expire" until 2057. Therefore the Condominium does not terminate until 2057.

Whether the Special Assessment is appropriate is a different issue, but is likely acceptable given the ability to opt out.

In your reference to paragraph 3 of the statement text, what specific section are you referencing? I have the POS from 1992 and I find no comparable language. I also have retained all amendments that have been forwarded to me since I purchased, and there is no change concerning the Ground Lease. Rather than an extension clause, my exhibit 10 of the POS states

"Since the lease of the land upon which the Condominium is formed expires on 1/31/42, your Ownership Interest will also terminate on that date (unless the Ground lease is terminated earlier in accordance with its terms or your own Ownership Interest is sooner terminated for some reason such as a sale or foreclosure)."

Again, I repeat, there is no extension clause in my POS. Disney has no right to bill me $25/pt payable by 2/29/08 or face a lien on my Ownership Interest with its accompanying forfeiture of booking rights OR execution of a deed in their name for 2042-2057 with no negotiated terms as to their maintenance obligations for property I'm maintaining for them until that time.

 

[fwm]

In your reference to paragraph 3 of the statement text, what specific section are you referencing? I have the POS from 1992 and I find no comparable language. I also have retained all amendments that have been forwarded to me since I purchased, and there is no change concerning the Ground Lease. Rather than an extension clause, my exhibit 10 of the POS states

"Since the lease of the land upon which the Condominium is formed expires on 1/31/42, your Ownership Interest will also terminate on that date (unless the Ground lease is terminated earlier in accordance with its terms or your own Ownership Interest is sooner terminated for some reason such as a sale or foreclosure)."

Again, I repeat, there is no extension clause in my POS. Disney has no right to bill me $25/pt payable by 2/29/08 or face a lien on my Ownership Interest with its accompanying forfeiture of booking rights OR execution of a deed in their name for 2042-2057 with no negotiated terms as to their maintenance obligations for property I'm maintaining for them until that time.

It is under Tab 0. The document is called Public Offering Statement Text

 

[DVC92]

It is under Tab 0. The document is called Public Offering Statement Text

I have found the POS Text and reviewed paragraph 3. No similar language is contained therein. In 1992, the completion of OKW wasn't even promised. Disney was more concerned with ensuring that the Ground Lease terminated in 2042 or sooner at their discretion, and that the property reverted back to them. They were unsure as to whether or not their timeshare concept would be successful and wanted to reserve the right of making OKW a hotel. As time went on and the club took off, they evidently altered the language of the documents for new buyers. I wonder if the current Disney execs even realize what the original documents contain. I was one of the earliest buyers.