Question on ROFR?

[DaddyDeuce]

Question regarding ROFR?

Does ROFR apply only to sales, or does it apply to all possible transfers of DVC ownership?

Would ROFR apply if you were gifting your shares?
Would ROFR apply if you were exchanging your shares for goods or services in a non-cash transaction?

I'm curious how this works.

 

[disneynutz]

The way I understand it is, if there is a deed change, then Disney has the ROFR.

 

[Dean]

Technically you can will it. DVC will give you an automatic waiver for a true gift to family. After that it becomes more cloudy for certain situations. Best to get a waiver and record it so as not to cloud the title. Technically you don't need the waiver but you must give them at least 30 days notice before closing.

 

[drusba]

You need to distinguish between when Disney can actually exercise the right and the process of your informing it of a transaction and getting a waiver of the ROFR. You need to always do the latter.

Disney can exercise the right for any sale. A sale includes any transaction where one party is giving something of value (whether it be cash or other property) in exchange for the DVC real estate interest. Thus, the non-cash exchange of goods or services for the DVC interest that you describe would trigger Disney's ROFR. In that situation, however, you immediately fall into some legal entanglements that need to be worked out. Since there is no set dollar price for the DVC property, what does Disney have to pay to exercise the right? It would have to pay the fair market value of the offer being made. In other words, Disney and the parties would have to agree to what the dollar value is of the offer made which consists of goods or services or other property so it could then pay that dollar value. Barring agreement, Disney could force the parties into a legal action to have a court determine the fair market value of the offer made. Whether Disney would go through that hassle when faced with such a transaction rather than just waive the right is entirely up to it.

The right does not actually apply to a gift (as long as it is actually a gift and not a disguised sale transaction where the parties are secretly exchanging money on the side, in which case the parties could be accused of fraud in trying to avoid the ROFR). However, with the gift, you still need to give notice to Disney so it can verify it is a gift and issue a waiver of the ROFR, which it will do as matter of course if it is actually a gift. Getting that waiver is necessary because Disney will file it with the local government agency that keeps real estate records. If you do not get it and just file your deed showing a change of ownership, those real estate records would not be blessed in any later title search when the recipient of the property goes to transfer it to someone else because they will show that there was a ROFR and it was not waived and the title search company won't know one way or ther other whether there was a gift that avoided the need for Disney to give up its ROFR. Moreover, it is really impossible to make a transfer without going through the notice and waiver excercise because Disney is not going to allow any new owner to make any reservation until the exercise is done.