Purchasing a fixed week question

[jerseyduke]

After the GF sells out, if I wanted to purchase a fixed week, I am wondering how it works.

Obviously I have to call and get on a wait list, but my question is:

1. Assuming that they can sell a fixed week for the week/type I want (they have not hit that 35% quota yet), do they have to wait to ROFR(or foreclose) a fixed week contract for that week and accomodation type, or can they combine enough points to make a new one (and then count it toward that 35% quota)

 

[disneynutz]

Unknown, they might ROFR all fixed weeks or knowing Disney they can take points and make a new fixed week contract.

Bill

 

[Dean]

After the GF sells out, if I wanted to purchase a fixed week, I am wondering how it works.

Obviously I have to call and get on a wait list, but my question is:

1. Assuming that they can sell a fixed week for the week/type I want (they have not hit that 35% quota yet), do they have to wait to ROFR(or foreclose) a fixed week contract for that week and accomodation type, or can they combine enough points to make a new one (and then count it toward that 35% quota)

Once they're sold out I think they'd have to wait until they got the week and type you wanted to be able to sell it to you. I don't think they could convert points to fixed weeks once sold out. Trying to find a specific fixed week option resale is going to be difficult, esp at VGF.

 

[MountainMouse]

Once they're sold out I think they'd have to wait until they got the week and type you wanted to be able to sell it to you. I don't think they could convert points to fixed weeks once sold out. Trying to find a specific fixed week option resale is going to be difficult, esp at VGF.

They are converting points to weeks now aren't they? So long as they don't go over the ratio why do you think they couldn't do it in the future with returned points?

 

[supersnoop]

They are converting points to weeks now aren't they? So long as they don't go over the ratio why do you think they couldn't do it in the future with returned points?

We seem to make a lot of assumptions on this board. First, we assume that DVD can split a deed into smaller chunks and sell more contracts. We also assume that, in order to merge deeds into a single, larger contract, they have to have multiple deeds from the same legal unit.

So, since fixed weeks come at a point premium, it could be difficult for DVD to find enough points in the same unit to sell a fixed week after the property sells out. I believe it would be legally feasible, but practically very difficult.

 

[MountainMouse]

We seem to make a lot of assumptions on this board. First, we assume that DVD can split a deed into smaller chunks and sell more contracts. We also assume that, in order to merge deeds into a single, larger contract, they have to have multiple deeds from the same legal unit. So, since fixed weeks come at a point premium, it could be difficult for DVD to find enough points in the same unit to sell a fixed week after the property sells out. I believe it would be legally feasible, but practically very difficult.

Agreed there are a lot of assumptions but that's part of the discussion and discussion is what these boards are for. Sometimes there are definitive answers and sometimes there are just ideas and wishes. That said, why do you think the point premium that DVD charges owners for weeks has anything to do with their ability to re-issue weeks as fixed points? I'm not saying it doesn't, I just don't see it.

 

[Dean]

They are converting points to weeks now aren't they? So long as they don't go over the ratio why do you think they couldn't do it in the future with returned points?

Do I know 100%, no, but as I read the legal parameters, I don't believe they could legally create a fixed week in the future from points not sold as such. However, even if theoretically they could, I don't see any feasible way they could for several reasons. First is that the 35% is a sales limitation, once that "unit" and the resort is sold, I don't believe they could alter that mix even if they wanted to. The second is that even if they could theoretically do so, all the points, including the 10% extra for the fixed week, would have to come from the same legal unit. One thing they could do, at least before sell out, is to take existing points and sell them as fixed instead and theoretically they could do the same with the unsold points held back substituting points acquired for ROFR, foreclosure, etc as the withheld points.

We seem to make a lot of assumptions on this board. First, we assume that DVD can split a deed into smaller chunks and sell more contracts. We also assume that, in order to merge deeds into a single, larger contract, they have to have multiple deeds from the same legal unit.

So, since fixed weeks come at a point premium, it could be difficult for DVD to find enough points in the same unit to sell a fixed week after the property sells out. I believe it would be legally feasible, but practically very difficult.

It's not an assumptions that DVC can split deeds, it's in the POS and there are reports that suggest it's specifically happened. It's also not an assumption they can't combine points into a single unspilt contract unless they are in the same legal unit, however, they could sell a larger amount of points as a split item that functions the same as long as they are the same home resort and UY. There has also been anecdotal evidence suggesting they can't combine smaller components but can sell them as a split contract. They also can't change the home resort or UY of a given unit and it's points.

 

[supersnoop]

Agreed there are a lot of assumptions but that's part of the discussion and discussion is what these boards are for. Sometimes there are definitive answers and sometimes there are just ideas and wishes. That said, why do you think the point premium that DVD charges owners for weeks has anything to do with their ability to re-issue weeks as fixed points? I'm not saying it doesn't, I just don't see it.

Did you take offense to my "assumption" comments? I was adding to the discussion, not saying it shouldn't take place.

My assumption is that VGF contacts are smaller than the average contact size at other resorts, mostly because of the price. The average contract available on the resale market is right around 160 points. I believe the smallest fixed week contract is right at, or over 200 points. If you want a larger room, a fixed week at Christmas in a two bedroom lake view would be over 600 points. I think it will be difficult for DVD to piece together enough points in the same legal unit to be able to offer fixed weeks after VGF is sold out.

 

[Dean]

Did you take offense to my "assumption" comments? I was adding to the discussion, not saying it shouldn't take place.

My assumption is that VGF contacts are smaller than the average contact size at other resorts, mostly because of the price. The average contract available on the resale market is right around 160 points. I believe the smallest fixed week contract is right at, or over 200 points. If you want a larger room, a fixed week at Christmas in a two bedroom lake view would be over 600 points. I think it will be difficult for DVD to piece together enough points in the same legal unit to be able to offer fixed weeks after VGF is sold out.

I haven't followed actual sales but there should be fixed weeks down to 125 points plus the 10% premium.

 

[wdrl]

First, some data to help put things in perspective.

The average VGF deed is smaller than the average deeds sold at either AKV or BLT. VGF is averaging 143.67 points per deed, while AKV and BLT are averaging 158.47 points and 158.25 points, respectively. These numbers reflect deeds reacquired by DVD.

The averages for AKV and BLT have been dropping. Since both resorts are considered "sold out", most deeds in recent months have been well below the historical average for either resort. In November 2014, AKV averaged 87.37 points per deed and BLT averaged 104.45.

As required, DVD must retain a minimum of 2% of each resort's total points. However, that 2% is a cumulative total that can be spread unevenly among the Units. At BLT, DVD owns 122,132 points in 223 Units. The average is 548 points per Unit, but there are 22 Units that have over 1,000 points unsold.

The smallest Fixed Week Deed available at VGF is 138 points; the largest is 1,313 points.

Through 12/05/2014, DVD has sold 244 Fixed Week Deeds containing 86,233 points. This constitutes 4.60% of the points sold so far and only 3.42% of VGF's total points.

Given the stated limited of 35% of accommodation types that could be sold as Fixed Weeks, none of the 52 Fixed Weeks have maxed out on any of the 7 different accommodation types that can be sold. In other words, there is at least one of each type available for each week if DVD decided to sell it to the public.

Now, for some opinions:

I see nothing in the Master Declaration that prevents DVD from reacquiring points originally sold as Traditional or Fixed, and then reselling them as the opposite type. DVD has already reacquired three Fixed Week deeds and there doesn't seem to be any reason why it couldn't take those Fixed Week points and sell them as traditional point deeds. Likewise, there doesn't seem to be any reason why DVD couldn't take previously sold Traditional points and repackage them as part of a Fixed Week deed.

Once VGF is sold out, it will probably be more difficult for DVD to find the number of points it requires in a single Unit to fund a Fixed Week Deed. However, it won't be impossible. As noted above, if VGF follows the pattern seen with BLT, there should be several Units at VGF that will have sufficient points to fund most Fixed Week accommodation types even after VGF is sold out.

In my opinion, the greatest impediment to buying a Fixed Week is buying a week for which the accommodation is currently available for booking. If someone wanted to buy Fixed Week #52 today, DVD would not be able to offer the buyer any accommodation type because all of them are already booked for 2014. Somehow, some way, the buyer and DVD would have to agree that the first Fixed Week booking wouldn't occur until 2015. Would a Fixed Week buyer want to delay their first usage of their timeshare until months later? Maybe, maybe not.

Sometimes, I wonder if DVD's CMs are that familiar with Fixed Weeks. During my recent visits to WDW, I've asked a fewASAs about Fixed Weeks at Aulani or VGF. Most say that I should speak to a Guide to get specifics, but some ASAs have no knowledge that Fixed Weeks are being offered at those resorts.

 

[MountainMouse]

Did you take offense to my "assumption" comments? I was adding to the discussion, not saying it shouldn't take place. My assumption is that VGF contacts are smaller than the average contact size at other resorts, mostly because of the price. The average contract available on the resale market is right around 160 points. I believe the smallest fixed week contract is right at, or over 200 points. If you want a larger room, a fixed week at Christmas in a two bedroom lake view would be over 600 points. I think it will be difficult for DVD to piece together enough points in the same legal unit to be able to offer fixed weeks after VGF is sold out.

No offense at all. I did think you were insinuating we shouldn't make so many assumptions so I was just clarifying that I thought they were needed for the discussion. No worries.

From a piecing together points standpoint I tend to think it wouldn't be that big of a problem even if it's from smaller contracts. You're right that there are generally smaller contracts resale right now, but the resale market is so new for VGF. I suspect larger contracts are being sold just not up for resale yet. As much as it costs to stay at VGF I can't think people are only buying 160 points. It may be that they are buying multiple contracts and that would drive the size down.

 

[jerseyduke]

We seem to make a lot of assumptions on this board. First, we assume that DVD can split a deed into smaller chunks and sell more contracts. We also assume that, in order to merge deeds into a single, larger contract, they have to have multiple deeds from the same legal unit.

So, since fixed weeks come at a point premium, it could be difficult for DVD to find enough points in the same unit to sell a fixed week after the property sells out. I believe it would be legally feasible, but practically very difficult.

A standard view studio during Adventure season is 125 points for the week, so 138 for the fixed week...that is far from a lot. Also remember, in the case of VGF, there is only 100 units, so down the road when they ROFR or foreclose, it really does not take a whole lot to get points in the same unit.

But aside from the practicality of it, my curiosity is if it is legally possible. I do not see why it would not be possible, but I am not a lawyer, nor did I stay at a holiday inn express last night.

 

[supersnoop]

A standard view studio during Adventure season is 125 points for the week, so 138 for the fixed week...that is far from a lot. Also remember, in the case of VGF, there is only 100 units, so down the road when they ROFR or foreclose, it really does not take a whole lot to get points in the same unit. But aside from the practicality of it, my curiosity is if it is legally possible. I do not see why it would not be possible, but I am not a lawyer, nor did I stay at a holiday inn express last night.

I think wrdl proved my theory both right and wrong in his post above. While the average contract size at VGF is much smaller than at other resorts, the 2% holdback over just 100 units should mean that Disney has plenty of points available in each unit to still offer a fixed-week contract.

 

[Dean]

[/B]
But aside from the practicality of it, my curiosity is if it is legally possible. I do not see why it would not be possible, but I am not a lawyer, nor did I stay at a holiday inn express last night.

Once sold, I do not think they could legally convert it to a fixed week off the resale market. They may or may not be able to just sell it off as points.

Maybe wdrl knows, have the fixed weeks corresponded to a unit that matches that description. In other words, does the "unit" for the fixed week have to contain the type of unit of the fixed week. I would assume so but could see it either way.

 

[wdrl]

[/B]

A standard view studio during Adventure season is 125 points for the week, so 138 for the fixed week...that is far from a lot. Also remember, in the case of VGF, there is only 100 units, so down the road when they ROFR or foreclose, it really does not take a whole lot to get points in the same unit.

Don't confuse vacation homes with Residential Units. VGF has 100 vacation homes but only 36 Residential Units. VGF's Residential Units range in size from 46,840 points (made up of two two-bedroom vacation homes) to 187,360 points (made up of eight two-bedroom vacation homes).

Even though VGF is less than half the size of BLT in terms of total points, VGF Residential Units on average are allotted far more points -- 70,022 -- than BLT, whose 223 Residential Units average only 25,711 points. Thus, its very likely that VGF, similar to BLT, will have several Residential Units with over 1 ,000 unsold points after it reaches "sold out" status.

Once sold, I do not think they could legally convert it to a fixed week off the resale market. They may or may not be able to just sell it off as points.

Maybe wdrl knows, have the fixed weeks corresponded to a unit that matches that description. In other words, does the "unit" for the fixed week have to contain the type of unit of the fixed week. I would assume so but could see it either way.

Each Fixed Week deed is funded by points drawn from a specific Residential Unit. Furthermore, each Fixed Week deed has the same language as traditional point deeds in regard to DVD's exclusive right to merge reacquired points with other points it owns in the same Unit:

"In the event DVD reacquires title to a given undivided percentage interest in a Unit, that undivided percentage interest shall merge into and be combined with any other undivided percentage interest that DVD may own in that Unit at that time; however, if an owner other than DVD acquires title to two or more undivided percentage interests in the same Unit, no such merger or combination of such interests shall occur." (emphasis added)​

Clearly, DVD has the right to take reacquired points, whether they be Fixed Week or traditional, and merge them with other points in the same Residential Unit. Then, it can resell those points as either Fixed Week or traditional.

 

[Dean]

Each Fixed Week deed is funded by points drawn from a specific Residential Unit. Furthermore, each Fixed Week deed has the same language as traditional point deeds in regard to DVD's exclusive right to merge reacquired points with other points it owns in the same Unit:

"In the event DVD reacquires title to a given undivided percentage interest in a Unit, that undivided percentage interest shall merge into and be combined with any other undivided percentage interest that DVD may own in that Unit at that time; however, if an owner other than DVD acquires title to two or more undivided percentage interests in the same Unit, no such merger or combination of such interests shall occur." (emphasis added)​

Clearly, DVD has the right to take reacquired points, whether they be Fixed Week or traditional, and merge them with other points in the same Residential Unit. Then, it can resell those points as either Fixed Week or traditional.

Agreed, but that doesn't suggest they can generate a new fixed week out of such a deed. I don't believe they could legally and from a practical standpoint, it'd be unlikely even if they could.

 

[wdrl]

Agreed, but that doesn't suggest they can generate a new fixed week out of such a deed. I don't believe they could legally and from a practical standpoint, it'd be unlikely even if they could.

What would legally prevent DVD from doing so? Once the Fixed Week points are reacquired by DVD, they are merged with all the other points DVD owns in the Unit. The points become undistinguishable from other points DVD owns in that Residential Unit. Subsequently, when DVD sells points from that Unit, it is not constrained if the points had been previously sold. Simply put, there is no legal impediment that prevents DVD from merging its reacquired real estate interests and then repackaging them however it wants, whether it be as Fixed Week deeds or traditional deeds.

 

[Dean]

What would legally prevent DVD from doing so? Once the Fixed Week points are reacquired by DVD, they are merged with all the other points DVD owns in the Unit. The points become undistinguishable from other points DVD owns in that Residential Unit. Subsequently, when DVD sells points from that Unit, it is not constrained if the points had been previously sold. Simply put, there is no legal impediment that prevents DVD from merging its reacquired real estate interests and then repackaging them however it wants, whether it be as Fixed Week deeds or traditional deeds.

The real question is what would allow them to do so. Legally and under the POS they'd have to have the right to do so, in that absence, it would not be allowed as I understand it. I haven't seen the POS for VGF but no one has posted anything that would address this issue. I'm willing to wager we'll never see it.

 

[ncurley]

I have been wondering what happens if you buy a set number of points for a fixed week (say a 1br standard view at Thanksgiving) based on the initial point chart, but then Disney changes the point chart to make your fixed week a few points more or less. (My understanding is that the total point chart value cannot change but they can reallocate to make (for example) a weekday night cheaper and the weekend more expensive for a certain room type.)

Also, what if you do not use the fixed week one year. Can you still bank and borrow as normal?

 

[Dean]

I have been wondering what happens if you buy a set number of points for a fixed week (say a 1br standard view at Thanksgiving) based on the initial point chart, but then Disney changes the point chart to make your fixed week a few points more or less. (My understanding is that the total point chart value cannot change but they can reallocate to make (for example) a weekday night cheaper and the weekend more expensive for a certain room type.) Also, what if you do not use the fixed week one year. Can you still bank and borrow as normal?

It has no effect on the fixed week owner for their fixed week or usage of their associated points outside of their home resort. The only effect is the same as everyone else for points reservations if they go to reserve something other than their fixed week.