OKW Contract Extension Quitclaim Deed

[DVC92]

I still believe the extension was illegal; however, I also believe it is a non-issue absent a court challenge which isn't worth the cost. The real issue is to ensure that OKW owners who turned down the extension are not billed for improvements to OKW which extend beyond 2042. DVC has stated to the Timeshare Bureau that such will be the case, but they have never communicated that information to the membership.

 

[Jason@dvcstore]

I here what you are saying......I believe that 99.9% of the people who bought into OKW believed that their membership would be over in 2042. I know I did. I have to leave .01 % for people that don't read contracts.

In my opinion the percentage is about 13% that don't read the entire contract. I talk to sellers of DVC for example that think their ownership ends 50 years from when they purchased. I do my best to explain that even though they bought their Boardwalk Villa points in 2001 they still expire 2042.

Jason

 

[Dean]

Can anyone provide the exact language from the POS stating that? I won't have access to my POS for 2 weeks, but my recollection is that it mentions nothing like "when the resort ceases to be a member" and does actually specify January 31, 2042 for OKW and a specific date for each of the DVC resorts.

In this situation, the board has voted to extend the land lease with Disney. I have no problem with someone refusing to sign the documents, but I also feel they will eventually get a response from DVC in the form of a lien on their membership and/or denial of service. As long as they are prepared for that event, more power to them.

Applicable issues. Under Public Offering text page one 1.a.1 also deals with the ground lease. 1.a.2 Ownership interest asserts that the Ownership Interest will expire 2042 unless extended in accordance with the Condominium Documents (I read that as ground lease extension). Next page 3. "Duration of the Vacation Ownership Plan".

Declaration of Condo has a lot of info that impacts this question including Article VI, esp 6.4 and 17.2.

There is no single area that specifically and directly deals with this issue, one has to use FL chapter 718 and the entirety of the POS and related info. My contention is that the definition of membership is an owner in the Condominium, that the definition of the Condo termination is the expiration of the ground lease and that the ground lease has been extended to 2057. Thus by default any member who has not signed away their rights would become a member until termination. The POS also gives specific situations where DVCMC may institute and collect a SA and really doesn't give much leeway on that front and I do not believe this purpose would be legally allowed as a SA under those provisions. YMMV.

 

[PBB]

Dean,

Thanks for the information.....It says a lot. This is what I mean about Disney not being up front regarding this whole matter. I had to say the word tricked but that is kind of what happened. This whole thing was a win-win for Disney. They either got the quitclaim deed they wanted or They got cash at $15 or $ 25 per point. It was not disclosed that these people may have ownership interests legally beyond 2057

Pat

 

[Dean]

Dean,

Thanks for the information.....It says a lot. This is what I mean about Disney not being up front regarding this whole matter. I had to say the word tricked but that is kind of what happened. This whole thing was a win-win for Disney. They either got the quitclaim deed they wanted or They got cash at $15 or $ 25 per point. It was not disclosed that these people may have ownership interests legally beyond 2057

Pat

My interpretation, no more. I wouldn't expect DVD to disclose my interpretation and doubt they'd admit my assertion even if they secretly agreed. As I said, I truly realize they were in a no win situation for the extension given that the ownership is tied to the ground lease. I can only imagine the discussions they must have had getting ready for the extension.

 

[RobDoc]

...This whole thing was a win-win for Disney. They either got the quitclaim deed they wanted or They got cash at $15 or $ 25 per point. ...

They also could have just allowed the ownership to expire on January 31, 2042 and no one would have had any reason to complain. They extended the lease to allow existing owners to extend - nothing more, nothing less. While I do agree that the whole thing was handled very poorly and was communicated in a very irresponsible fashion by DVC, I fail to see the interpretation suggested by some - especially when they try to include FL law in the equation rather than the actual language in the POS and signed documents. The "FL law" suggestion has been made in the past without any apparent merit or legal basis since the "law" quoted had nothing to do with DVC. If it is really felt that DVC has acted improperly, why not make a report to the FL body that regulates timeshares and let the state pursue the cause for members.

... It was not disclosed that these people may have ownership interests legally beyond 2057

How do you figure that anyone would have ownership interests beyond 2057? That is the end date of the extension offered. To my knowledge, no one has any interests beyond January 31, 2057 and those that did not extend are finished on January 31, 2042.

 

[Dean]

especially when they try to include FL law in the equation rather than the actual language in the POS and signed documents. The "FL law" suggestion has been made in the past without any apparent merit or legal basis since the "law" quoted had nothing to do with DVC.

I can't speak for others but I don't believe I have made any assertion that it is FL law to force owners to be extended. I mentioned FL statues 718 above because the POS does specifically as it pertains to this issue and because 718 and 721 govern timeshares including termination provisions and leasehold issues, 719 & 720 likely have some effect as well. To my knowledge, there is nothing in either than would support (or detract) from my points above assuming DVD has followed the requirements as set forth in those statutes (esp 718.117 & 718.401) which I would presume they have.

 

[jmkjr72]

you either want to extend or you dont want to extend and either way you have to sign something
so dvc has your decsion in ink
if you dont want to extend let disney know this and give it to them in wrighting
having it in wrighting will allow them to figure the future of the devlepoment
if you dont want to sign the deed higher an attorney to draft a letter to dvc saying you do not want to extend your lease

 

[DVC92]

The original OKW sales contract, at least in 1992, and POS specifically set forth that the termination date would be 2042, unless sooner terminated. No extension language was ever employed in those days. The Master Declaration of Covenants supported only termination. The original contract also set forth that it could not be modified or amended except by written consent of both parties. Subsequently, DVC sales contracts and the POS, for later purchasers, have been changed to permit extension. Remember, in 1992 and for a number of years, Disney had no intention to extend, quite the contrary, and went to great measures in sales and contracts to guarantee that they would shut down OKW to its members in 2042 or sooner. That was their plan early on when they were unsure of OKW's success. Legally, I believe a court challenge would be successful, at least for the early contracts, if undertaken but to what end other than to reverse the extension that has already moved forward.
As I stated above, the real issue is the proper collection of reserve funds in the future for extenders vs. non-extenders. Although Disney has communicated in writng to The Timeshare Bureau their intent to have a differentiation in the handling of reserves at the appropriate time, such information has never been elaborated on or directly announced to the members. IMHO, that's the real concern.

 

[PBB]

How do you figure that anyone would have ownership interests beyond 2057? That is the end date of the extension offered. To my knowledge, no one has any interests beyond January 31, 2057 and those that did not extend are finished on January 31, 2042.

Oops....My mistake.......I meant to say that people may have interest in DVC beyond 2042 til 2057.

 

[PBB]

you either want to extend or you dont want to extend and either way you have to sign something
so dvc has your decsion in ink
if you dont want to extend let disney know this and give it to them in wrighting
having it in wrighting will allow them to figure the future of the devlepoment
if you dont want to sign the deed higher an attorney to draft a letter to dvc saying you do not want to extend your lease

For one, I have not made up my mind whether I want to extend or not. I do need to hire an attorney to state that I am not going to sign an extension. I have already stated to the Disney person last week

 

[Chuck S]

I just don't see the big deal. It takes about 10 minutes to take care of the paperwork, whether you extend or not. The fretting over it is more time consuming than simply taking to the notary, signing it and getting it over with.

 

[Dean]

The original OKW sales contract, at least in 1992, and POS specifically set forth that the termination date would be 2042, unless sooner terminated.

But that was specifically termination of the ground lease, not the membership itself.

I just don't see the big deal. It takes about 10 minutes to take care of the paperwork, whether you extend or not. The fretting over it is more time consuming than simply taking to the notary, signing it and getting it over with.

But what would be the fun in that, LOL. To me it's more the principle of how it was done that that it was done. And in addition to realizing that they were between a rock and a hard place, I also realize that there are implications to other resorts, including the resorts I currently own.

 

[ToddyLu]

I have 2 college degrees and have read this thread about 3 times trying to understand the problem at hand. It would be really cool to see some of you on a debate team. I have enjoyed the jargon and mumbo jumbo actually. That is how you learn things...from reading responses from both sides. Thanks for the smiles.......to be continued...

 

[RobDoc]

I can't speak for others but I don't believe I have made any assertion that it is FL law to force owners to be extended. I mentioned FL statues 718 above because the POS does specifically as it pertains to this issue and because 718 and 721 govern timeshares including termination provisions and leasehold issues, 719 & 720 likely have some effect as well. To my knowledge, there is nothing in either than would support (or detract) from my points above assuming DVD has followed the requirements as set forth in those statutes (esp 718.117 & 718.401) which I would presume they have.

Earlier in this thread you stated:

...The POS states that the membership runs to when the resort ceases to be a member which at the time was 2042...

and I asked if anyone could provide the actual language from the POS where that was mentioned.

To that quoted question you then replied:

There is no single area that specifically and directly deals with this issue, one has to use FL chapter 718 and the entirety of the POS and related info.

which seems to imply that your earlier statement was invalid and that the POS does not state "the membership runs to when the resort ceases to be a member" .

Since you now state that the POS does include specific mention of FL statute -

...I mentioned FL statues 718 above because the POS does specifically as it pertains to this issue and because 718 and 721 govern timeshares including termination provisions and leasehold issues, 719 & 720 likely have some effect as well.

- I'll ask again - Can someone please provide the exact language from the POS stating this?

I will not have access to a POS for 2 more weeks and would be interested in the exact language supporting these comments.

Thanks in advance.

The original OKW sales contract, at least in 1992, and POS specifically set forth that the termination date would be 2042, unless sooner terminated.

That is also my understanding, except I also think there is some language providing DVC the option to make other changes - at least in my POS from 1993. Can you quote the language regarding the requirement from an earlier POS that both parties must agree to any modification?

 

[Dean]

and I asked if anyone could provide the actual language from the POS where that was mentioned.

I don't have the time to try to type in all the references I alluded to previously and it would be quite the long post to gather all the portions together talking about membership, ground lease and termination options. One has to read the POS and other legal documents as an aggregate I feel to formulate an opinion on this issue either way. There is not one single area that deals with this issue but you have to piece together info from various locations. I'd refer you to my post #23 above, esp the last paragraph for my interpretation, yours may be different.

 

[RobDoc]

I don't have the time to try to type in all the references I alluded to previously and it would be quite the long post to gather all the portions together talking about membership, ground lease and termination options. ...

All I asked for was the specific reference you mentioned from the POS. Certainly that shouldn't be anything too taxing - unless it does not exist. In that original post, there was no qualification that included FL statute, only the POS.

The POS states that the membership runs to when the resort ceases to be a member which at the time was 2042...

I am away for 2 weeks without a copy of a POS. My request was simply asking for the information from the POS you were using to support your comments. No problem if you are unable or unwilling to provide that as a reference.

I have looked up FL 718 and FL 721 and fail see anything pertinent to the current discussion and I know we have had this discussion in the past - with similar results. Regardless, you posted that the POS stated specific information and I was just interested in seeing that provided as a quote.

I can certainly wait until I return home to look it up myself and will be happy to take the time to post what I find. I just hoped someone could corroborate the specifics on which you were basing your comments. If you can't provide them, I doubt others will be able to either.

 

[Dean]

All I asked for was the specific reference you mentioned from the POS. Certainly that shouldn't be anything too taxing - unless it does not exist. In that original post, there was no qualification that included FL statute, only the POS.

I mentioned the references earlier. There would be about 2-3 pages in total of the POS that would have some reference to the overall issue. Look at the info when you return and see what you think, you may disagree.

 

[axfather]

I think they were rather tricky, but I think the consideration was the print of Old Key West they sent out and the credit against the dues to pay for a notary.....if there is a legal fight...those items would be part of the DVC side of the case...nothing says you have to accept the consideration though....which real estate law says can be a mere peppercorn.

 

[DVC92]

That is also my understanding, except I also think there is some language providing DVC the option to make other changes - at least in my POS from 1993. Can you quote the language regarding the requirement from an earlier POS that both parties must agree to any modification?

Here are some sections of the original POS and contract as well as Florida Timeshare law regarding terms of the contract:

1) Section 17.2 of Article XVII in my POS reads as follows:

Termination or Expiration of Ground Lease

Upon termination or expiration of the terms of the Ground Lease, this Condominium shall automatically terminate and all Owners' interests therein and all mortgagee liens thereon shall terminate.


2) In addition to section 17.2 of the Declaration of Condominium, Article XI, section 3 of the Master Declaration of Covenants states:

Termination

These Covenants, Conditions and Restrictions shall run with and bind the land for a term commencing from the date this instrument is recorded and continuing until January 31, 2042, after which time they shall automatically terminate.

3) 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)."

4) The following is from the Florida law concerning timeshares:

721.06 Contracts for purchase of timeshare interests.--
(1) Each seller shall utilize and furnish each purchaser a fully completed and executed copy of a contract pertaining to the sale, which contract shall include the following information:
(f) A brief description of the nature and duration of the timeshare interest being sold, including whether any interest in real property or personal property is being conveyed and the specific number of years constituting the term of the timeshare plan.

5) My actual contract/Purchase Agreement:

a) Item #2 (Ownership Interest Purchased) states that my ownership interest is subject to the Ground Lease (the original contract failed to include the language "and any amendments thereto" which was placed in later contracts);

b) The last paragraph in item #4 (The Disney Vacation Club) states, "The term of the DVC ownership plan is concurrent with the term of the Ground Lease underlying the Condominium and will continue until January 31, 2042 which is the expiration date of the Ground Lease or unless the Ground Lease is sooner terminated in accordance with its own terms."; and

c) Section 15 of the Contract clearly sets forth that it cannot be modified or amended except by a writing signed by both PURCHASER and DVD, and that all provisions shall survive the closing.