Questions about 2042

[Dean]

Paul, I can guarantee you that DVC will not simply give everyone that last year or two of points then throw them to the wolves saying you got the points now see if you can use them. Expect either a proration likely for 2 years or a lottery tied to paying the fees at the time. If that's not acceptable to you, consider working directly with DVC's legal department much earlier than the last 5 years to avoid sudden disappointment. If I were in charge, I'd prorate the last 2 or maybe even 3 years of points. I'd give them the equivilent of a full number of points for the 2040 use year and a prorated portion based on the number of points owned and the amount of the use year they will get to use. The alternative would be to give everyone the same proportion regardless of use year and I can see the merrit in this as someone with a Feb 2041 use year could get all of their points and someone with a Dec use year could only get 2/12 of the 2041 pts.

I'd also stop banking around 4 or 5 years out but encourage borrowing for the last 5 years or so. I might even out the weekends slightly late in the system though I suspect they'll do this far earlier than the last few years. It sure will be intersting to see this board then. I can just imagine the threads of discussion.

 

[Kick it up a notch!]

You guys are all assuming that they are going to close the doors to the resort on Jan 31, 2042. The program is going to end Jan 31,2042. That doesn't mean that that you can't stay at the resorts after that. I run a restaurant and we close at a certain time each day, but if someone comes in 1 minute prior to close they can still order dinner and enjoy our hospitality. The program may end but we did pay for points until the last year and I don't think they will prorate them. They will most likely eliminate banking points 2-3 years prior to the end of the program though.

 

[Dean]

BAM!!! LOL.

I believe I included one possiblity above that would have them letting people finish out the year using their points but I think that is one of the least likely scenarios. After further thought, I believe the most likely is to cut off with the 2040 use year giving everyone a full complement of points and NO 2041 points for anyone. Even if they extend the term it will only delay this issue, the problem will still exist for some time in the future.

 

[ralphd]

If DVD decides to give members the option to extend their contracts, then they may decide to give all members their full number of points in 2042. DVC would collect annual dues for the year.
Or they could offer the prorated points to members who choose not to extend their contracts.
Dean, you don't really think they could withhold 2041 points? That would really create a public relations problem, if not a legal problem. And I do understand DVC may be out of business when some members want to book vacations, but I am assuming (you know what that means) the resorts will still be open.
Yes, I agree an extension may not answer the question of what method will be used to handle the final year.
Still believe DVC is profitable and they will want to keep our money coming into the resorts, restaurants and parks. Not to mention all the merchandise we buy. I think their marketing department will be thinking about gaining a larger percentage of the market, rather than terminating a complete section of their existing market.
One unknown is at what point will DVD decide that the 2042 expiration date will become a sales handicap. The shorter RTU period does not bother some people (example: caribbean and Mexico), but the US market has generally been a deeded timeshare market. Still hope to see an indication when Eagle Pines opens.

ralphd

 

[Dean]

Originally posted by ralphd
Dean, you don't really think they could withhold 2041 points? That would really create a public relations problem, if not a legal problem. And I do understand DVC may be out of business when some members want to book vacations, but I am assuming (you know what that means) the resorts will still be open.
Yes, I agree an extension may not answer the question of what method will be used to handle the final year.
Still believe DVC is profitable and they will want to keep our money coming into the resorts, restaurants and parks. Not to mention all the merchandise we buy. I think their marketing department will be thinking about gaining a larger percentage of the market, rather than terminating a complete section of their existing market.
One unknown is at what point will DVD decide that the 2042 expiration date will become a sales handicap. The shorter RTU period does not bother some people (example: caribbean and Mexico), but the US market has generally been a deeded timeshare market. Still hope to see an indication when Eagle Pines opens.

Yes, I think they could withhold the 2041 points. I don't see how they couldn't withhold at least part of them. Even if the resorts are still open (which I don't take as a given), Disney would be losing money by allowing members to use their points past 31 Jan, 2042.

I think the RTU becomes a sales problem at around 30 years which won't affect BC but will affect Eagle Pines, even if by some unlikely chance it does start on time. The resorts in MX have already seen a problem with the 30 years and many of them have gone to longer terms for the newer resorts. Example, Royal Sands is 50 years when their previous projects were 30. The resale market has already been affected by the lenght of the RTU at the other Royal properties. Most in the Caribbean that I can think of are longer, at least for new sales. Most Aruba are 60 years, many with an auto renew lease.

If they do offer an extension on the lease term, they may very well give everyone that is willing to pay the dues their full allotment for the 2041 use year even if they don't extend. Can you imagine the upkeep on a 50 year old building at that point though, I hope it doesn't give me a heart attack.

As for the assumption I think you made, I'm not sure I agree. I think you assumed that DVC members were considered important to WDW overall because of the other monies they spend. While I think it should be so, I have yet to see any concrete evidence that Disney looks at us that way. All of the evidence has been to the contrary else why the lack of discounts overall and current points exchange options and costs.

I scanned the POS. Since the points are only symbolic of the underlying units interest based on a formula and tied to the number of days for each unit type, I'm not sure they can extend the usage unless they extend the life of the DVC itself. Regardless, I think it's an interesting topic and I'm glad that someone is finally willing to discuss it.

 

[RobDoc]

Interesting discussion. I agree that something will be done to manage points for 2041 (If you have a Dec use year- you sure won't have much opportunity to use those points.)

I expect that banking/borrowing will be curtailed during those last years. I also expect that DVC will see lots of abandoned memberships (like with most other timeshares) where members will stop paying dues. DVC itself will then have those points available.

If there is some sort of extension offered- DVC will have to deal with the prospects that some won't extend and will still need a plan for 2042 for those whose membership will end at that time.

I also expect that DVC will prorate any points in the last year- or have members pay for the points they actually use.

I'm sure DVC is looking at options- both from a legal and public image standpoint, but it's unlikely we'll see any policy for sometime.

Stay Tuned!

 

[ralphd]

Agree that many members will drop or abandon their contracts as the expiration date approaches. Many contracts will probably be abandoned or lost in current members estates.
I understand the argument that Disney would offer more to DVC members if they really cared about us. However, we know that DVC sales are still strong, so there doesn't seem to be a strong incentive for Disney to offer us better park discounts or any other major incentive.
Yes, they would have to also maintain the DVC structure. They could change the exchange function to a Marriott/II type arrangement.
Think the points are part of an accounting method to make sure the ownership interest equals the available vacation periods (units times days of the year).
The buildings can have a life of over 40 years (again assuming no major structural problems), but only Disney knows how many years they have estimated as the life of the properties.
If they do propose an extension, the cost per point may include a reserve for a 'replacement' resort. We would have to read the contract to understand what the cost per point covered and make sure the annual dues contract language didn't change.
The extension could be an incentive for current members to extend their memberships or it could be just a new marketing effort.

ralphd

 

[Granny]

Dean.....I think your challenge for a discussion has been amply taken up!

I think Doc makes a great point about the abandoned contracts. This might make the ending easier by far. Also, I don't see Disney keeping up their right-of-first-refusal on contract resales once they really start devaluing.

Dean, you slipped in one comment in one of your posts that does get me worried (not a lot...I mean, we are talking 40 years out). To paraphrase, you wondered if Disney would make dramatic improvements the last few years to the DVC resorts, all on our nickel. Think about that....the opportunity to completely overhaul hotel or timeshare accommodations with no out-of-pocket cost to Disney! I would have to think this is a pretty tempting scenario for the long range planners at Disney.

I know our dues are capped at 15% increase per year, but if they start 10 years out with the refurbishing, they could up the dues like that every year for 10 years. Not to mention the reserve they will have built up.

I hope the Florida timeshare laws have some provisions for this!

 

[ralphd]

Seems like there is a schedule somewhere on standard maintenance items. It listed the estimated life of interior painting, exterior painting, the roof, carpet and etc.
Will look next week....will be out of town Monday thru Wed.

Anyone else remember?

ralphd

 

[PKS44]

DVC can suspend banking and borrowing, they can raise dues, they cannot give you the points you have already paid for...when they signed the contract with you they agreed to give you points annually for each use year of the contract...to change that is not a "disappointment" it is an unequivocal breech of contract--(any lawyers out there think this is anything but a slam dunk? ) Just because it could be hectic accommodating the demand, I cannot see Disney taking such a stupid, illegal move to avoid it when they can do so legally..Points are guaranteed. Availability is the thing not guaranteed. They are very careful to say that in all documents...

Paul

 

[Dean]

Originally posted by PKS44
DVC can suspend banking and borrowing, they can raise dues, they cannot give you the points you have already paid for...when they signed the contract with you they agreed to give you points annually for each use year of the contract...to change that is not a "disappointment" it is an unequivocal breech of contract--(any lawyers out there think this is anything but a slam dunk? ) Just because it could be hectic accommodating the demand, I cannot see Disney taking such a stupid, illegal move to avoid it when they can do so legally..Points are guaranteed. Availability is the thing not guaranteed. They are very careful to say that in all documents..

From what I can see in the POS and other legal paperwork I scanned over, I can not back up your claim. You did not buy points, you bought a small percent of a "unit" which is represented by points. At OKW, a unit is a building; at BW it's a block of rooms. Common sense would tell me that there's no way they can or will guarantee usage of those points once 31 Jan, 2042 comes along. This tells me that either some will get far less points or everyone will get a modest amount less. The question then comes to how are they going to limit the points that last year or two. I can think of nothing I've seen along that would force them to give everyone their last years worth of points and force them to run the resorts until all have been able to use them. Again, if they extend, the problem is only delayed.

The points about extensions for a fee, default late in the usage and especially the affect of members dying and having the contracts caught up in probate are well taken.

While I think it would be illegal for DVC to basically build a new resort at our expense, it would be possible to have things in top condition at change over as long as they could do so within the limitations of the 15% per year increase. In order to increase more than 15%, the members themselves would need to vote, this could not be done by the Board themselves.

 

[PKS44]

"You did not buy points, you bought a small percent of a "unit" which is represented by points...... there's no way they can or will guarantee usage of those points once 31 Jan, 2042 comes along. This tells me that either some will get far less points or everyone will get a modest amount less"


Dean-
If some get less points at the end all of a sudden then they are getting less of the the thing that represents what they bought. We bought a yearly real estate interest for 40 years in our case...not 38 years and then a partial interest, not 39 and a partial interest...I just don't see how they can do anything but give everyone what they bought, the full representation of their interest in the property for the full term of the contract. I understand your concerns and would be interested if there are any lawyers on the board especially real estate lawyers who could help us understand what the true implications could be...

Paul

 

[Dean]

Originally posted by PKS44
If some get less points at the end all of a sudden then they are getting less of the the thing that represents what they bought. We bought a yearly real estate interest for 40 years in our case...not 38 years and then a partial interest, not 39 and a partial interest...I just don't see how they can do anything but give everyone what they bought, the full representation of their interest in the property for the full term of the contract. I understand your concerns and would be interested if there are any lawyers on the board especially real estate lawyers who could help us understand what the true implications could be...

Paul, while I hear your point, I don't agree with it from a legal standpoint. You bought a certain percent of a unit that ends on 21 Jan, 2042. The points are only representative and no where did your paperwork say you were getting 40 years. You assumed you were getting 40 years, you really were only getting 39 and a half. You might be right in that a lottery would not be fair to some so I would think that a prorated poriton of points might be the most likely. Though it's been suggested in this thread, I can't see DVC giving a full points amount then only charging for the points they the members use, though it's a workable possiblity to put on the list.

Just think, we have another 35-37 years to bat this one around; at least until we have real info from DVC.

 

[ralphd]

The critical date is January 31, 2042. The only question concerns the last Use Year for each member based on that date.
Dean is probably correct in has interpretation of the point system.
We have signed the agreement on the Points (or floating use time).

ralphd

 

[ralphd]

I agree that Disney cannot build a new resort under the current contract that expires on January 31, 2042, but they can include new buildings and/or location in an contract extension agreement.
The current contract and deed includes references to a specific unit.


ralphd

 

[Dean]

Originally posted by ralphd
I agree that Disney cannot build a new resort under the current contract that expires on January 31, 2042, but they can include new buildings and/or location in an contract extension agreement.
The current contract and deed includes references to a specific unit.

My reference to the time limitation was not to say it couldn't be done under DVC just that to sell a large resort starting selling in 2004 (or likely much after) that it'd be difficult to sell with less than 30 years remaining. Assuming 10 years to sell out that would be at about 27-28 years or later if they start later. I certainly see no reason where a new resort with a different expiration could not be included in DVC. Yes, there is a provision for extension. Unless they have additional resorts with a later expiration date, I don't foresee an extension.

 

[PKS44]

Originally posted by Dean
Paul, while I hear your point, I don't agree with it from a legal standpoint. You bought a certain percent of a unit that ends on 21 Jan, 2042. The points are only representative and no where did your paperwork say you were getting 40 years. You assumed you were getting 40 years, you really were only getting 39 and a half. .

I am now quoting from the DVC Product Understanding Checklist

"A deed represents your ownership of an undivided percentage interest in a particular Unit and the common elements. Your ownershipInterest entitles you to an annual allotment of Vacation Points which may be used to reserve accomodations. " (MY ITALICS)

earlier in the document it says all interests expire on January 31, 2042.

I suspect there could be a lottery for reservations if demand is very high, but no prorating...and I suspect many will use up borrow etc such that things will be has horrible as that terrible Y2K problem was a couple years ago..

Paul

 

[Dean]

Originally posted by PKS44


I am now quoting from the DVC Product Understanding Checklist

"A deed represents your ownership of an undivided percentage interest in a particular Unit and the common elements. Your ownershipInterest entitles you to an annual allotment of Vacation Points which may be used to reserve accomodations. " (MY ITALICS)

earlier in the document it says all interests expire on January 31, 2042.

I suspect there could be a lottery for reservations if demand is very high, but no prorating...and I suspect many will use up borrow etc such that things will be has horrible as that terrible Y2K problem was a couple years ago..

Paul

Paul, this is essentially what I was saying. You get a yearly allotment of points and it ends in Jan 2042. I see nothing in that to guarantee a full allotment of points the last year. Common sense tells us that someone with a Dec, 2041 use year will not get all of the 2041 points and be able to use them. It will be very interesting and I hope I'm aware enough to enjoy it.

 

[Granny]

This thread might still be going in 2042

I'm going to put a link in my will to this thread so my kids can join in the discussion in 30 years....most likely I won't be too worried about it (or anything else) about then.

 

[ralphd]

I agree that EP will probably be the beginning of DVCII. Also think the term of DVCII will be around 50-52 years. They may tweak that based on how long they think it will take to market the resort. If that number is ten years, they may set a term of 60 years.
The contract does list a unit number that is recorded on the deed at the courthouse. That is required by the state to ensure a timeshare company does not sell any more intervals than are available. The contract includes an agreement (which I need to read again) that says you accept the points as the method of booking your vacation period. It is a floating vacation period agreement.
Prorating or a lottery for the final contract year probably will create controversy.

ralphd