Question on resale and dues

[RobDoc]

Different interpretations are inevitable with an issue like this. Until we see what DVC actually does for 2042, we may not have a definitive answer prior to that time. For all current DVC members, there is truly no issue, since dues are based on calendar year and are billed at the end of each year for the following year- regardless how DVC actually figures them.

The importance is only in advising resale purchasers on all aspects of the program to influence their decision how to consider their offer.

Since DVC does prorate dues based on time left in the calendar year, regardless of their reasoning for doing so, that it is the precedent set for resales, IMHO. (Those buying a Dec Use Year on Jan 1, will get the prior year's points (11 months) and the points due that year- I can't imagine Disney giving away 11 months of fees as a marketing ploy- but maybe they are truly that generous.)

Regardless, if an agent is truly knowledgeable about DVC, they will be aware that Disney does, in fact, prorate the dues. If they represent the seller, they can "forget" how the dues are handled with DVC and push the typical timeshare dues structure. If they represent the buyer, they can inform their client how DVC handles the issue. I would want to know how Disney handles the dues if I was considering a resale purchase, just for the sake of comparison.

The bottom line with this is to consider the overall resale package. In most cases, prorating the dues amounts to a few hundred dollars at most and often is less. If the rest of the deal is worth it, it probably isn't worth losing the purchase over that amount. In some cases, if points have already been borrowed from the next use year, the dues issue is more important, since you will pay dues for points unavailable for use.

 

[FredS]

Originally posted by Dean
Fred, I was thinking the same about you. I don't think I'm defensive, just correct and I stand by the interpretation as well as my assessment of how the information is handled by brokers. I didn't say anyone was stupid, merely misinformed, as that is the definition of the word ignorant. You are certainly welcome to your opinion but don't be surprised if I post mine each and every time this one comes up as it's something I feel strongly about and feel many people have been overcharged for whatever reason. If you want to disagree and post such, go for it. I'd sure like to see some material from DVC that would suggest otherwise, if you have something I'm unaware of I'd love to know.

What I, and I believe Caskbill, were saying is that we view it differently and would like to see some material from DVC which supports another view. I have no problem with disagreement and presenting one's viewpoint and/or any supporting information. I would welcome additional facts from someone who might have them and not just "you're ignorant" type responses which start with my name. I don't negatively characterize others' posts and views, even when I disagree strongly and would appreciate the same courtesy.

 

[RobDoc]

Personal issues need to be discussed by PM or email. Further personal discussion won't be allowed on the board

Thanks!

 

[schucrew]

When Disney began selling the BCV, I think they charged dues based on when your use year started - if your use year didn't start until August (and you bought before August), you still only paid 5 months worth of dues for that year. If the idea that you pay in January for that year's dues is correct, then Disney would have charged you the entire 12 months of dues. This seems to support the view that the dues paid in January 2003 (for an August use year) would be for 7 months of the 2002 use year and 5 months of the 2003 use year.

That being said, I think it is important when buying a resale to look at the whole picture. I used August as an example because that is our use year - and when we bought our resale in April 2002, we agreed to pay all of the 2002 dues because August 2001 points were available and also the points from August 2000 had been banked into 2001, so those points were available as well. The extra $4 or so per point might be worth paying if the resort and use year works for you.

 

[FredS]

Originally posted by schucrew
When Disney began selling the BCV, I think they charged dues based on when your use year started - if your use year didn't start until August (and you bought before August), you still only paid 5 months worth of dues for that year.

This was not my experience in buying directly, but maybe their policy has varied during the years. My understanding is that when buying initially directly from Disney that the dues begin from the date of the contract, unrelated to the use year. This may not have always been the case, but regardless I perceive this as a waiver Disney can make as a marketing tool. Selling sooner than later is huge for them and otherwise the points are sitting there earning zip.

In my mind, it is more "fair" in the individual-to-individual resale market that whomever gets to use the points pays the dues. As one of the cheapest people in the world I usually look at most things as how they benefit me the most but in this one I had no problem with paying dues on points I received in a resale. (Granted, my offer per point was low, but fortunately was accepted by the seller and no exercise of ROFR by Disney.) And it still seems clear to me that dues paid in January are for points alloted for that calendar year, so the general rule in the resale market that whomever gets the use of the points pays for the dues on those points seems perfectly reasonable.

I would be very interested in finding out the definite plan for how this is all supposed to end, i.e., any pro-ration of dues or timing of use for the last year's points. It might be in something I have, but to be honest I am dealing more with current issues than 38 years from now!

 

[RobDoc]

My understanding is that when buying initially directly from Disney that the dues begin from the date of the contract, unrelated to the use year.

That has been the case only when the prior year's points were given with the new purchase.

When we purchased at OKW in 93, dues for our June Use Year were prorated from the date the closing was set- so we paid dues on 5 1/2 months of 1993.

When we pre-purchased at HH in 1995 as an add-on, our dues began on June 1, 1996- even though the resort opened in March, 1996. We got no points until June 1, 1996. (There are no points available for a prior year for a resort not actually opened.)

Once DVC began offering MB as a promotion, new purchasers got prior year points for resorts already open - prorated from the date the deposit was made. At that time, the points from the prior year were then "sold back" to Disney for MB , but dues were still prorated for the present calendar year.

When VWL began sales, there were no points available for the prior year and dues were prorated from the date when the Use Year actually started after the resort opened.

As already mentioned by schucrew, no dues were charged for BCV until July, when the resort actually opened. If you bought an add-on in Feb. 2002 with a Dec Use Year, you got no points until Dec 1 and your dues were prorated from Dec 1- Dec 31, 2002.

I also agree with schucrew that the dues amount is a small aspect of the resale offer and may not make enough difference to kill the deal, but letting prospective buyers know about how Disney handles the dues is appropriate, IMO. It truly doesn't matter for existing members- until we find out how it will be handled for 2041-42.

 

[Dean]

Fred I wasn't intending to get personal with you and for that I apologize.

Here's the facts as I know them.

1. Disney prorates the dues based on when you buy for the rest of the year.
2. With presales they charge either from when you sign or when the use year starts which even is later.
3. Our Guidebook says "Annual Dues are due January 15. They are based on the calendar year not your use year."
   [/list=1] Those are the general facts and not disputable. To me this is a slam dunk as I don't see how it could be interpreted any other way than I've stated earlier. It even says it's not for your use year. The other peices of info available to me are these.
   1. Most brokers, but not all, hold the view that you pay the fees if you get the points.
   2. I have personally talked to membership accounting a few years ago and asked them this question directly, their answer was as I've presented.
   3. On my second resale the broker had to call DVC to be convinced and called me back and said "you were right".
      [/list=1] Part of these are not facts available to you. The only peice of info above that even supports the other side is what the brokers do. I would hope most are misinformed and not dishonest but remember they are used timeshare sales people with some being good and some not. I would venture to bet you a beer that if you go back and look hard at your original direct purchase paperwork that the dues were prorated and you simply didn't realize it. If not, you would be the first that hasn't said they were. I'll have to ask my friend who is a charter member if she remembers how her dues were done early on. I'm certain that the reasons most brokers do this included that this is the way the entire rest of the industry functions and they have trouble imagining that DVC does it differently, that it's simply and easier for them, they likely can make an extra sale or 2 over time pitching this line to the seller and they haven't checked it our for themselves. I know Shontell did check it out and got mixed answers from DVC and thus hasn't changed her stance which is the same as yours.
      
      As noted, Disney in general isn't accustomed to giving things away. From that standpoint it's more believable that the only freeby you're getting from DVC is a small amount and not several hundred dollars. As for the end, DVC hasn't published anything that would answer that. Obviously we will not get the entire points the last year or 2. That time will answer this arguement once and for all (in more ways than 1).

 

[FredS]

Originally posted by Dean
...Here's the facts as I know them.

1. Disney prorates the dues based on when you buy for the rest of the year.
2. With presales they charge either from when you sign or when the use year starts which even is later.
3. Our Guidebook says "Annual Dues are due January 15. They are based on the calendar year not your use year."
   [/list=1] Those are the general facts and not disputable. To me this is a slam dunk as I don't see how it could be interpreted any other way than I've stated earlier. It even says it's not for your use year. The other peices of info available to me are these.
   
   **I feel like we are speaking different languages. I have repeatedly said that it is NOT for the use year, that it is the calendar year. This would support the view that dues paid in January are for points received later than year, period. Not part of another year and part of the current year. The "facts" you list seem to support what I am saying.**
   
   1. Most brokers, but not all, hold the view that you pay the fees if you get the points.
   2. I have personally talked to membership accounting a few years ago and asked them this question directly, their answer was as I've presented.
   3. On my second resale the broker had to call DVC to be convinced and called me back and said "you were right".
      
      [/list=1]
      
      **Again, I think sales from Disney are a completely different situation as prorating the dues makes sense in marketing. I don't think anyone disputes how Disney handles their sales, but that is not the norm in the resale market. For DVC, the points were previously sitting in inventory, available to no one, so they are happy to get another owner. For a resale the seller had the option to use these points or not, and if they did not them it seems reasonable to pay the dues on them if buyer gets to use them.**
      
      I would venture to bet you a beer that if you go back and look hard at your original direct purchase paperwork that the dues were prorated and you simply didn't realize it.
      
      **Again, my dues WERE prorated for my contract purchased directly from Disney. I have attempted to distinguish that situation being very different from my resale purchase, wherein I reimbursed the seller for dues paid for points which the seller had not used. For points used, obviously, he was responsible for the dues.
      
      Just curious, according to the pro-rate on use year logic, what if someone buys a stripped contract, with no points in the current year and few if any points available for the following year? You start dues based on when you purchase them as DVC does? Wouldn't that be grossly unfair to the buyer, when seller has had the benefit of the points? On the flip side, if a seller has banked points which can be used by the buyer then it is reasonable that seller be reimbursed for dues on them.**
      

 

[Caskbill]

When we purchased at OKW in 93, dues for our June Use Year were prorated from the date the closing was set- so we paid dues on 5 1/2 months of 1993.

Doc, as you know we first purchased in June '93 also and it was the same for us.

My best recollection from the time is that the CM said we didn't have to pay a full year's dues on our purchase and that it was prorated for the remander of the year. And then in January 1994 we'd pay full dues for our 1994 points.

That's how I interpret dues are paid for the points you receive during that calendar year.

Now it was 10 years ago and maybe it's now a false memory, but I do know that from day one (June '93) this is how I always interpreted dues were based on that year's points.

Now if she truly said that in January 1994 we'd be paying dues for the year 1994, that could possibly have a different interpretation.

Nevertheless, as you said, for current members it's a moot point.

 

[Dean]

Just curious, according to the pro-rate on use year logic, what if someone buys a stripped contract, with no points in the current year and few if any points available for the following year? You start dues based on when you purchase them as DVC does? Wouldn't that be grossly unfair to the buyer, when seller has had the benefit of the points? On the flip side, if a seller has banked points which can be used by the buyer then it is reasonable that seller be reimbursed for dues on them.

The neutral dues issue would be for the seller to in some way pay the appropriate dues and this is true regardless of which side of this fence one falls on. In either interpretaion the buyer could be paying dues on the points used by the seller. In what I feel is the appropriate interpretation the dues deficit could actually stretch into the second year post transfer.

As to the other point, there are 2 ways to look at it. What's the appropriate approach and how are things usually done for resale. Just because brokers usually do things a certain way doesn't even come close to making it correct. What DVC does IS the issue and the ONLY issue to this arguement. Using the brokers as the standard is akin to putting the fox in charge of the hen house or leaving the teenagers home alone for a week, there's no structure or control. The fact that most brokers take the dues for points approach has nothing to do with what's appropriate. Realize that DVC is likely the only Timeshare in the world that does things this way. The brokers work with hundreds of resorts over time. No one ever tells them otherwise so when they do hear the truth they can't believe it. I suspect even many of the guides don't really know about this as a rule. While they are a good source of info, they are not a credible source where the rubber meets the road and are frequently not complete in their knowledge as it applies to many areas of DVC. The guides vary greatly in their knowledge, accuracy and willingness to explain it correctly.

 

[disneyberry]

(sleepy now, so sorry if this post is incoherant... )

just checked back in w/ this thread... and actually was a bit worried to read that the calendar year dues method i learned about from this board is not actually 100% verified.

all i know is: as soon as i close on my recent resale, and get my membership#, etc., i'm planning to get to the bottom of this issue. i originally hoped to find out this information now, but it's just way too difficult to do so before i'm officially a member.

i think, because 2041 seems so far away, this issue is really only ever relevant when it comes to resales.
this is probably why no one seems to have ever gotten an absolute answer from DVD on it.

also usually, the $ amount difference between the calendar year interpretation vs. the use year interpretation is small enough that i think most resale buyers or sellers just end up not putting too much weight on the dues. it's more about the package as a whole.

anyway, i still would really like to get my hands on something in writing from Member Administration that actually explains in detail the method DVD uses to charge dues. then at least we could all be 100% sure of how dues should be calculated.

 

[Dean]

anyway, i still would really like to get my hands on something in writing from Member Administration that actually explains in detail the method DVD uses to charge dues. then at least we could all be 100% sure of how dues should be calculated.

Beyond what's been discussed here, you will get nothing in writing, you may get a verbal response and even that could vary depending on who you talk to. Only accept infor from Membership Accounting on this one. I'd somewhat disagree about the dues impact on a contract. Now, more than ever, I think they will frequently make or break a deal. $300-500 difference can be a lot with the current ROFR buy back situation.

 

[RobDoc]

Originally posted by disneyberry
[B
anyway, i still would really like to get my hands on something in writing from Member Administration that actually explains in detail the method DVD uses to charge dues. then at least we could all be 100% sure of how dues should be calculated. [/B]

All of your documents will indicate, in writing, that dues are based on the calendar year- no one has disputed that fact in this thread.

DVD has always prorated dues based on time between purchase date (or actually receiving points) and the end of the calendar year - no one has disputed that fact in this thread.

You can use that information to decide how to structure an offer on a resale, regardless how anyone looks at how dues are calculated. Since it's all negotiable anyway, it will come down to what the buyer and seller agree upon for the sale.

Enjoy!

 

[CarolMN]

Originally posted by WebmasterDoc
....(snip).... Since it's all negotiable anyway, it will come down to what the buyer and seller agree upon for the sale.

Enjoy!

I could not agree more and I think this is the most important point to keep in mind when buying a resale. It won't matter who is right and who is wrong. No agreement - no sale!

 

[FredS]

Originally posted by Dean
. What DVC does IS the issue and the ONLY issue to this arguement.

I think that what DVC does has little significance. My view is that how the developer handles it has little to do with how individuals in the resale market handle it. Developers frequently can and do make concessions or throw in little extras to make that initial sale. Individuals tend to look at things a little differently, thus, the concept that has formed that whomever uses the points pays the dues.

 

[disneyberry]

Beyond what's been discussed here, you will get nothing in writing, you may get a verbal response and even that could vary depending on who you talk to. Only accept infor from Membership Accounting on this one.

*sigh* that's unfortunate. well we'll see, i'll try my best to get the info from them. it'll be extremely frustrating if i get conflicting info though. i hate getting conflicting info from Disney (happens more often than i'd like).

anyway, it still is strange that there can be different interpretations of "dues being charged by the calendar year, not the use year". hm.

as for the dues making or breaking the deal... i guess what i meant to say was that even if the buyer, seller, and broker all don't agree on how the lump sum dues charged in January breaks down, you can still try to negotiate the price per point up or down to compensate for that.
i was also thinking that the situation gets much worse when you're considering a resale contract that has a late Use Year like December.
but it's not that bad when you're looking at an early Use Year like February.

 

[Dean]

Originally posted by FredS
I think that what DVC does has little significance. My view is that how the developer handles it has little to do with how individuals in the resale market handle it. Developers frequently can and do make concessions or throw in little extras to make that initial sale. Individuals tend to look at things a little differently, thus, the concept that has formed that whomever uses the points pays the dues.

If what DVC and DVD do has little significance, then we have no common ground to even discuss this issue and no frame of reference. It seems to me that's like saying the federal government has little to do with setting taxes. I'm well aware that a seller (DVD, Ford, etc) can offer incentives if they chose but this is not simply a freebie from DVD. You've chosen to ignore what is written in our guidebook and how DVD conducts this issue which I don't understand but is your option. Good luck.