Question about maintenance fees.

[Princess Jasmine]

DH and I are about to purchase a DVC resale. I know that one year of maintenance fees are due at closing. Am I correct that those are for the fees due in January? Also, we want to pay our future fees monthly, when would we start that?

Thanks for your help.

 

[LisaS]

It sounds like your resale agreement requires you to reimburse the seller for the fees they paid for 2007. Your 2008 dues will be due Jan 15, 2008. You will receive a bill in late Dec/early Jan for those. If you want to pay those monthly rather than in a lump sum, you will need to discuss that with someone at Member Services (maybe Member Admin?) after you close on your contract and your contract info is set up in MS's system.

Reimbursing the seller for past maintenance fees is a negotiable item by the way.

 

[Princess Jasmine]

Okay, I think I understand. The contract has a Oct UY so the seller paid fees for the points coming in Oct 2007 back in Jan. Since none of the points have been used we would be paying maintenance on all of them.

 

[LisaS]

Okay, I think I understand. The contract has a Oct UY so the seller paid fees for the points coming in Oct 2007 back in Jan. Since none of the points have been used we would be paying maintenance on all of them.

The fees are paid on a calendar year basis, not a Use Year basis. So with an Oct UY, the dues for calendar year 2007 cover 9/12ths of the 2006 points and 3/12ths of the 2007 points. If you are reimbursing all of the 2007 dues, you should be getting 3/4ths of the 2006 points as well as all of the 2007 points and beyond. If you are not getting any 2006 points but are getting all 2007 points and beyond, you shouldn't have to pay more than 3 months worth of the 2007 dues.

 

[Princess Jasmine]

Okay, now I'm really confused. I guess I better call the Timeshare Store to figure this out. We are getting no 2006 points, only the 2007 points that come in October. I was told that I would have to pay maintenance fees on all the points coming in October when we close.

 

[LisaS]

Okay, now I'm really confused. I guess I better call the Timeshare Store to figure this out. We are getting no 2006 points, only the 2007 points that come in October. I was told that I would have to pay maintenance fees on all the points coming in October when we close.

Sellers generally ask for a refund of the full year's maintenance fees, perhaps because they never thought about, or don't understand that the dues cover the calendar year, not the Use Year. Only part of the fees the seller paid in Jan 2007 were for some of the points they would receive in Oct 2007. Calendar year 2007 equates to the last 9 months of their 2006 UY (Jan - Sep), and the first 3 months of their 2007 UY (Oct-Dec).

Disney does this when people buy in directly from them. For example, I also have an Oct UY. I purchased points at AKV. My first AKV points will be my Oct '07 points. I will owe only 3 months worth of dues for 2007, for Oct, Nov and Dec of 2007. The dues I will pay in Jan 2008 will be for the last 9 months of my 2007 UY and the first 3 months of my 2008 UY.

Your seller may or may not be open to negotiating on the dues. Talk to your broker at TTS and see what you can do. It doesn't hurt to ask!

 

[salmoneous]

Only part of the fees the seller paid in Jan 2007 were for some of the points they would receive in Oct 2007. Calendar year 2007 equates to the last 9 months of their 2006 UY (Jan - Sep), and the first 3 months of their 2007 UY (Oct-Dec).

Although I've seen this analysis a few times, I can't agree.

Yes, in 2007 you will pay one year of dues. And you will receive one year of points. The dues match up with the year of points. Yes, 9 months of the year are in "use year 2006" and that's the time you have to use your 2006 use year points. But you shouldn't match up dues with time-to-use-point. You should match up dues with points. Think about how the last year of the contract will work.

But it doesn't really matter how you match up use years with points. It's just how you pare the two up in your head. Whether you look at it the way Lisa described, or the way I look at it makes no practical difference. Your dues will still be due in January, and you'll still get points once a year, and you'll still have a year from when you get them to use the points.

The way the TSS sets up a standard contract is exactly how it was presented to you. They expect you to pay the maintenance fees for the year in which you get points. But, as Lisa said, it doesn't hurt to ask the seller to pay. Just as it doesn't hurt to ask for the seller to pay the closing costs or lower their price.

 

[LisaS]

Although I've seen this analysis a few times, I can't agree.

Yes, in 2007 you will pay one year of dues. And you will receive one year of points. The dues match up with the year of points. Yes, 9 months of the year are in "use year 2006" and that's the time you have to use your 2006 use year points. But you shouldn't match up dues with time-to-use-point. You should match up dues with points. Think about how the last year of the contract will work.

But it doesn't really matter how you match up use years with points. It's just how you pare the two up in your head. Whether you look at it the way Lisa described, or the way I look at it makes no practical difference. Your dues will still be due in January, and you'll still get points once a year, and you'll still have a year from when you get them to use the points.

The way the TSS sets up a standard contract is exactly how it was presented to you. They expect you to pay the maintenance fees for the year in which you get points. But, as Lisa said, it doesn't hurt to ask the seller to pay. Just as it doesn't hurt to ask for the seller to pay the closing costs or lower their price.

But it is also the way Disney does it -- you pay pro-rated dues the first year. I purchased AKV in early February. My first points will be Oct '07 points. I will owe 3 months worth of dues, not a full year and not even pro-rated from the purchase date. My dues start Oct 1, 2007 and I will owe 3 months worth for this year.

So I think the reason some of us support this way of looking at the dues is because it is consistent with the way Disney does it and is what the seller paid if he/she purchased directly from Disney. If they got the benefit of pro-rated dues when they purchased but then get full reimbursement when they sell, they aren't just getting reimbursed, they are making money on the dues. Now if the buyer wants to pay it, that's up to them.

ETA: And if the seller bought this particular contract as an add-on from Disney, then they may have gotten an even better deal on the dues. They would have paid pro-rated dues from the purchase date, but received all of the current UY points. If the points were an allotment from the previous calendar year, then by your method, those points were totally free of dues. Even by this (Caskbill) analysis, they got more points than they paid dues on.

 

[Doctor P]

Never mind.