OKW Extension Papers & Lockout Mentioned

[CastAStone]

Enforcing dues could be an issue. What happens when people borrow the last year of points to use in 2041 and then just stop paying? It might not even be the original intent but I could see someone who borrowed and has no points left wondering why they're still paying dues.

If it were me I would make them prepay the dues to borrow the points.

2041 will be the last year owners get points btw so it would be borrowing them to use in 2040.

 

[Sandisw]

Does anyone know if people who paid the extension fee have to sign a new deed?

 

[NY Pirate Princess]

Wouldn't they have to sign a deed or amendment? I hope no one paid without legal written notice of extension.

 

[hockeydad21]

Enforcing dues could be an issue. What happens when people borrow the last year of points to use in 2041 and then just stop paying? It might not even be the original intent but I could see someone who borrowed and has no points left wondering why they're still paying dues.

I haven't really put much thought into any of this, but wouldn't DVC send your bill to a debt collections agency if you fail to pay? Sure, you can skip out on paying your bill, but then you're gonna get hit by collections with interest, and your credit will go in the tank until you settle up.

Lesson of the day - pay yo bills!

 

[CarolynFH]

Does anyone know if people who paid the extension fee have to sign a new deed?

New deeds were filed - but not until 2019 - https://dvcnews.com/wdw-resorts/old-key-west/4566-old-key-west-extension-deeds-filed

Here’s more contemporaneous reporting on the extension. Note that the DVC VP at the time was Jim Lewis, who was later fired for intentionally understating Aulani dues in order to boost sales. The state of Hawaii caught him, and I’m sure it was embarrassing to the Walt Disney Company. https://dvcnews.com/wdw-resorts/old-key-west/14-additional-details-on-okw-contract-extension

 

[Sandisw]

New deeds were filed - but not until 2019 - https://dvcnews.com/wdw-resorts/old-key-west/4566-old-key-west-extension-deeds-filed

Here’s more contemporaneous reporting on the extension. Note that the DVC VP at the time was Jim Lewis, who was later fired for intentionally understating Aulani dues in order to boost sales. The state of Hawaii caught him, and I’m sure it was embarrassing to the Walt Disney Company. https://dvcnews.com/wdw-resorts/old-key-west/14-additional-details-on-okw-contract-extension

Thank you. It certain sums up the situation. I wonder if any of those who owned then decided they wanted to extend now, and never quit claimed the deed, would they be able to push DVD to allow it based that specific language?

 

[CarolynFH]

Thank you. It certain sums up the situation. I wonder if any of those who owned then decided they wanted to extend now, and never quit claimed the deed, would they be able to push DVD to allow it based that specific language?

Good question!

 

[Sandisw]

Good question!

So it has me amending my thinking a little bit on what DVD might be able to do in 2042 for those owners who did neither.

I don’t think they can come right out and end someone’s contract…the language made it clear that the extension applied to all owners.

However, I do think DVD might try to still assess them the $25/pt fee on those contracts and indeed lock someone out at that point.

My thinking now is because it says you owe the special assessment and the only way to satisfy it was by signing the quit claim. I think the fact that it spells out the price per point would even allow owners to still be able to pay that same amount per point.

At that point, you may have a lot fewer owners to push back on the lock out because many might be willling to just pay it to have those additional 15 years or those owners will be ready to sign the quit claim then.

 

[tom1944]

So it has me amending my thinking a little bit on what DVD might be able to do in 2042 for those owners who did neither.

I don’t think they can come right out and end someone’s contract…the language made it clear that the extension applied to all owners.

However, I do think DVD might try to still assess them the $25/pt fee on those contracts and indeed lock someone out at that point.

My thinking now is because it says you owe the special assessment and the only way to satisfy it was by signing the quit claim. I think the fact that it spells out the price per point would even allow owners to still be able to pay that same amount per point.

At that point, you may have a lot fewer owners to push back on the lock out because many might be willling to just pay it to have those additional 15 years or those owners will be ready to sign the quit claim then.

I wonder how many owners there will be by 2042. New resale purchasers are not eligible. New direct buyers are buying to 2057. Could they require any new owner that is added to the deed -be it a family member or change to a trust submit the quit claim deed? Could DVD ROFR any 2042 account that does not?

 

[Chili327]

looking at it from the long time ago perspective. At the time, it seemed like the OKW owners were being railroaded.

I think that is the big difference... looking at it now it seems like a bad idea not to sign or opt out, but at the time they definitely weren't feeling like being compliant.

 

[CarolynFH]

I think that is the big difference... looking at it now it seems like a bad idea not to sign or opt out, but at the time they definitely weren't feeling like being compliant.

I'd say they definitely didn't feel like DVC was acting legally by forcing them to pay up for an extension - and apparently enough lawyers pointed out to DVC that it was not legal to make DVC back down.

 

[Sandisw]

I think that is the big difference... looking at it now it seems like a bad idea not to sign or opt out, but at the time they definitely weren't feeling like being compliant.

Which is why I think you really have to understand the legality of it all. Some believe the what happened is owners were offered a chance to pay for an extension. It was the opposite.

The extension happened for all owners, and all owners were expected to pay for the special assessment of $25/pt.. So, the only way to satisfy the amount you owed for the extension, if you were not in the position to pay it, was to sign away your rights to it.

So, maybe the owners who did neither believed that could not be forced into which option they wanted.

Obviously when lawyers got involved, DVC backed down and stopped locking owners out of their accounts and choose instead to simply have the quit Claim signed when the contract was sold…which, at that point, the owner would not care. .

But, it would be interesting to see what DVC would say if an owner had their lawyer tell them that they now were able to pay the special assessment they owe.

 

[TheDailyMoo]

However, I do think DVD might try to still assess them the $25/pt fee on those contracts and indeed lock someone out at that point.

This seems very plausible. In 2042 that $25 pp will probably feel like chump change to both Disney and owners alike. Heck at that point one year of rental would easily cover that. It could be a nice easy way to make the problem "go away" without any major issues and save face for both sides.

 

[Bearval]

It is amusing reading through the old posts and just seeing how this ended up. I am sure getting notice about all the actions Disney could take frightened more than a few owners at the time. And here we are 15 years later, and DVC still is letting those who did nothing access their accounts and points. That tells me they knew they were on shaky ground.

I would expect by around 2030 they will start buying up as many OKW resale contracts as they can get their hands on. They will be dirt cheap, and might even encourage members to do a buyback.

What the long term play is, I am a little more uncertain about. I think they thought the extension would be easy money - and it was for those who opted in.

I wouldn't be surprised if Disney tries to "remarket" the extension again.

I imagine nobody will want to be DVC President beginning in 2038 or so... That five year timeline from 2038-2043 is going to be a terrible job for someone to navigate!

My guess is that Disney will lock out the owners of the 2042 contracts and just wait on the class action lawsuit that will follow. In the meantime they will rent out those rooms for cash stays. If Disney "loses" the lawsuit which is not a given since they will most likely argue that they received no " consideration" from the owners who didn't opt for the extension. They will at best, have to make those owners "whole" which at would be what the remaining 15 years would have been worth. They most likely will use the resale valuation of the remaining 15 years of the OKW contracts which will be quite low especially since they will not be exercising ROFR . Disney will drag this out as long as possible and if the DVC owners win they will only see 60% of the money since the lawyers will be taking 40%. In any case the value of OKW resale with 15 years left will be under $60pp.

 

[tom1944]

My guess is that Disney will lock out the owners of the 2042 contracts and just wait on the class action lawsuit that will follow. In the meantime they will rent out those rooms for cash stays. If Disney "loses" the lawsuit which is not a given since they will most likely argue that they received no " consideration" from the owners who didn't opt for the extension. They will at best, have to make those owners "whole" which at would be what the remaining 15 years would have been worth. They most likely will use the resale valuation of the remaining 15 years of the OKW contracts which will be quite low especially since they will not be exercising ROFR . Disney will drag this out as long as possible and if the DVC owners win they will only see 60% of the money since the lawyers will be taking 40%. In any case the value of OKW resale with 15 years left will be under $60pp.

And I doubt it will be a huge number of people.

 

[Sandisw]

My guess is that Disney will lock out the owners of the 2042 contracts and just wait on the class action lawsuit that will follow. In the meantime they will rent out those rooms for cash stays. If Disney "loses" the lawsuit which is not a given since they will most likely argue that they received no " consideration" from the owners who didn't opt for the extension. They will at best, have to make those owners "whole" which at would be what the remaining 15 years would have been worth. They most likely will use the resale valuation of the remaining 15 years of the OKW contracts which will be quite low especially since they will not be exercising ROFR . Disney will drag this out as long as possible and if the DVC owners win they will only see 60% of the money since the lawyers will be taking 40%. In any case the value of OKW resale with 15 years left will be under $60pp.

The interesting scenario though will be if they have to allow owners to pay the fee.

Locking out is allowed because the fee was not paid, and so if an owners takes legal action to force the fee, that might take a lot less time?

However, since they did back off back in the day, after lawyers were involved, you do have to wonder if they do have some level of doubt that what they did can even be enforced?

Let’s see what happens with the subsidy that is supposed to kick in for capital reserves…and if we end up knowing if original owners in this situation are given it or not.

 

[kanerf]

OKW is going to be a weird one. I have two contracts there, one 2042 that was not extended (to my knowledge) and one I bought direct, so I know it is 2057. So while the 2042's will supposedly disappear, those that have 2057 will still be using those points to stay there until 2057, which means they really can't demolish or substantially re-build the resort until then. Of course the could swap your ownership into some new resort at that time I suppose. Since I will be 83 in 2042, not sure I will give a hoot one way or the other.

 

[Bearval]

The interesting scenario though will be if they have to allow owners to pay the fee.

Locking out is allowed because the fee was not paid, and so if an owners takes legal action to force the fee, that might take a lot less time?

However, since they did back off back in the day, after lawyers were involved, you do have to wonder if they do have some level of doubt that what they did can even be enforced?

Let’s see what happens with the subsidy that is supposed to kick in for capital reserves…and if we end up knowing if original owners in this situation are given it or not.

Disney will fight having to allow the owners to pay the fee and they can drag this on for years, nor do I think Disney will allow them to pay the fee at this point. Disney will just not sent the owners a " MF invoice" for 2043 nor accept payment and wait and see if a lawsuit is filed. Also, class action lawyers need a "cash" settlement to get paid, which is why I believe if Disney loses the settlement it will be that Disney has to pay what the market rate is for the resale value of those " lost" 15 years. The lawyers will get their 40% from that payout.

The reason Disney backed out of the original "lockout" was that it was denying owners the ability to use their points for the time period they paid for, unless they paid for the extension or signed the quit claim deed. To lock them out after 2042 is a whole different situation.

 

[hockeydad21]

This is all so interesting. I had no idea DVC essentially extended everyone's contract at OKW unless you signed the quit/opt out contract. So the few people who just never responded at all (yes or no) to their extension request are just automatically given the 2057 extension, with the possibility of never having to pay money for the extension? Am I reading all of this right?

 

[Sandisw]

This is all so interesting. I had no idea DVC essentially extended everyone's contract at OKW unless you signed the quit/opt out contract. So the few people who just never responded at all (yes or no) to their extension request are just automatically given the 2057 extension, with the possibility of never having to pay money for the extension? Am I reading all of this right?

All owners contracts were extended 2057 and all owners were told they owe the special assessment to pay for the change the association approved.

However, if someone could satisfy what they owed by signing the quit claim deed

So, the way I see things, after doing more reading from back then is that owners probably do not have the right to get it for free.

But, I do think they still have the right to pay for it if they didn’t give away the right to the extension

Now, DVC can refuse the payment and force owners to court to enforce the contract, and allow them to still pay

I just am not sure if they would since allowing people to pay the special assessment gives them money for that.

If they lock someone out and people are willing to settle dues and the fee, it doesn’t seem they would blatantly say no, especially if the number of contracts out there that fit into this situation is small.