POLL: How do Annual Dues Apply? By Calendar Year or by Use Year?

[Caskbill]

Poll: How do Annual Dues apply? To Calendar year or to Use Year?

In another thread it is being debated as to how to properly apply dues payments, (or reimbursement of dues) in the event of selling/purchasing a resale contract.

There are two arguments:
1. Dues apply strictly on a calendar basis without regard to use year.

In this case, when figuring out how dues are actually applied to points one would take the annual dues, and divide them, or prorate them to the different Use Year points depending on how many months of each specific use year reside within the given calendar year.

Example: You pay a years' worth of dues in January 2005. This group argues that part of those dues apply to your Use Year 2004 points that cover the calendar 2005 months, and part of those dues cover your Use Year 20056 points, the parts that have months that reside within calendar year 2005.

2. Dues apply to Use Year.

Those arguing this case state dues paid within a calendar year apply strictly to the points that apply to the Use Year for that same calendar year.

Example: You pay a years' worth of dues in January 2005. This group argues that all of those dues apply to your 2005 points.


I argue that method #1 is correct. On a line chart it looks like this:

I state this case with the following observations:

When a contract is first purchased from Disney, Disney prorates the annual dues based on how many months are left in the Calendar Year. From Dictionary.Com:
v. pro·rat·ed, pro·rat·ing, pro·rates
v. tr.
To divide, distribute, or assess proportionately.

This means that if you purchased in 2004 for example, the dues on those points are divided between calendar year 2004 and calendar year 2005.

Others argue that Disney is really just giving an incentive and not making you pay the full dues on the first year's worth of points. I argue against this two ways: 1.) If it's an incentive, then why doesn't Disney highly tout this fact? Why would they use the word prorate and not actually use the word incentive? And 2.) Just how fair would an incentive be? If someone purchased 300 points with a February Use Year, and dues are $4.20/point, they get an 'incentive' of $105.00 off their purchase, but if someone else buys 300 points with a December Use Year, they get $1155.00 off their purchase? Why would Disney give buyers different incentives based on what use year they purchased? Why should the December Use Year buyer get more than a Thousand Dollars free, compared to the February Use Year buyer? There's no way anyone would consider that to be fair, and it is not like Disney.

Disney clearly states dues are prorated. They are not reduced as an 'incentive' to buy.

Disney clearly states numerous times that dues are paid on a Calendar Year basid, not on a Use Year. If someone pays dues in January 2005, and a seller has a contract with no 2004 points left, and all 2005 points, and asks for reimbursement of the dues they paid in January because "You are getting the use of all the 2005 points", then they are stating that dues apply to Use Year and not Calendar Year. They're stating they paid dues January 2005 on their 2005 points. But their 2005 'points' have a specific Use Year. This is totally opposite of what DVC describes: Dues are applied on a calendar year basis.

Others will also argue that in a fixed week contract, which is typical for many timeshares, that the dues for a given year apply for the week you receive that year. This is correct. So why wouldn't the dues you pay in 2005 apply to your 2005 use year points. The problem is it is comparing apples to oranges when compared to DVC. The difference is that when you purchase that other timeshare, the first year's dues are NOT PRORATED. You pay a full year's points right up front. Other timeshares do not have a Use Year which spans across different calendar years. Other timeshares use a calendar year to begin with.


Finally, while this can be debated, keep in mind that in a resale contract, payment or reimbursement of dues paid is totally negotiable between the buyer and the seller.

If you want to glance throught the other thread, go HERE

 

[Happy Birthday Cat]

I don't think the payment of dues has anything to do with use year. IMHO, it is strictly a calendar year thing that needs to be pro-rated when a sale takes place involving the repayment of some or all of the dues.

On the annual dues statement there is a heading for "Year" not "Use Year". It also shows the DVC budgets for a calendar year (or at least your portion based on your number of points), not any use years and that's what we are paying dues on.

HBC

 

[LIFERBABE]

It's always been my understanding that dues are paid by calendar year.

Disney pro-rates your first year dues because the points were part of Disney's inventory for the months before they were purchased. Once you own the points you pay dues from that month forward.

I don't agree that it is an incentive at all.

The current add-on incentive where DVC pays your dues even after the points are yours is an incentive. If we had to pay dues on points we didnt even own that wouldnt be fair.

 

[T.E. Yeary]

Quote:

Originally Posted by Dean

Here is a response to another broker sent from DVC Member Accounting to that broker and forwarded to me.


Quote:
No, they pay a full year of dues. 12 months from January 1 to December 31 for every year and all years thereafter. The only time they would have paid a partial year is the year they bought from us because we prorated the dues for that year from the day they purchased through 12-31. The dues were still based on calendar year which is 12 months. They are NEVER assessed based on Use Year. Just forget about their Use Year and points, that has absolutely nothing to do with dues.