Reselling an "under 100 pt." BLT contract

[bobbiwoz]

Could DVC put any restrictions on the resale of these contracts?

TIA!

Bobbi

 

[Jeremy&Susan]

They can and will put the same restriction on under 100 point contracts as they do every other contract.

Disney has the ROFR and if they dont want small contracts to float around on the resale boards, they will excersise their ROFR.

With the number fo resales as of late, it looks like DVC is not ROFR'ing too much, but who can tell how or if they will protect this new property for the immediate future.

 

[Terry S]

They can put other restrictions as well if they choose. I get a CM discount, so I receive an additional piece of paperwork stating that if I want to sell, I have to contact DVC first and they have the option to buy it back at the price that I paid for it.

 

[Chuck S]

They can put other restrictions as well if they choose. I get a CM discount, so I receive an additional piece of paperwork stating that if I want to sell, I have to contact DVC first and they have the option to buy it back at the price that I paid for it.

Yes, but the CM restrictions are disclosed at the time of purchase.

Existing non-CM BLT under 100 pont contracts fall under the same guidelines as any other contract, unless there was a disclosure to the contrary at the time of purchase. However, Since there is no disclosure as to why ROFR may or may not be exercised on a contract, if DVC wants to prohibit smaller BLT resales, they can easily just exercise ROFR on all such contracts.

 

[bobbiwoz]

OK...so, the worse it could be for the owner/seller is that Disney would give the asking price at the time and ROFR the contract. That doesn't seem to be a bad risk if we bought now. It would be possible that there just would never be another chance to own a smaller contract of BLT if Disney buys up all of the small contracts in resale.

Am I correct in the fact that the restriction is only for BLT contracts? I didn't read the information from DVC because I just haven't been interested in it. AKV is still the usual 25 limit for paying cash, isn't it?

Bobbi

 

[spiceycat]

Am I correct in the fact that the restriction is only for BLT contracts? I didn't read the information from DVC because I just haven't been interested in it. AKV is still the usual 25 limit for paying cash, isn't it?

Bobbi

you are correct - my guide says this is only for BLT!

 

[DebbieB]

If DVC started ROFR on all the under 100 point contracts, why would anyone offer to buy, they would be just wasting their time.

 

[thepops]

You could put it up at a higher price and then have your spouse "buy" it. If Disney does their ROFR, you get the extra $. If not, it's a wash since it's all in the family.

 

[Dean]

You could put it up at a higher price and then have your spouse "buy" it. If Disney does their ROFR, you get the extra $. If not, it's a wash since it's all in the family.

Yes but it would be illegal to do so in FL and all states I know of as it's fraud.

I do not believe DVC could legally add any restrictions on the back end but they could add them on the purchase as they do with CM. And they could buy them back if they chose. While it would likely be cost effective from DVC's standpoint to buy all small contracts back going to new owners, it's actually DVD that has this options and the increase management costs may actually help them rather than harming them. They could reinstitute the transfer fee though my reading of FL statues suggests this would be limited to $100 even though they did try to raise it to $200 at one points, it's currently zero. They could limit perks if they chose by restricting them to only those that bought direction and/or for a min # of points.

 

[Nikisha421]

You could put it up at a higher price and then have your spouse "buy" it. If Disney does their ROFR, you get the extra $. If not, it's a wash since it's all in the family.

what's so illegal about this scenario???

 

[kristenrice]

Let me see if I understand this...

Since Disney is raising the BLT minimum to 100 points in January, I could add-on, say, 3 50 point contracts right now at $112/point.

Then, next year or later, when 50 point BLT contracts are a thing of the past...a "collector's item", I could sell them for pretty much any amount that someone would pay, right? It would seem that if you could ONLY get a 50 point BLT contract via resale, then the seller could charge whatever the "market" would bear. If someone REALLY wanted my 50 points at BLT, I could ask $120/point for them. Would Disney ROFR a contract that is priced higher than what they are selling them for?

I have no interest in doing this. I'm just wondering if it's even possible.

 

[CPTJAK]

You can sell at any price that you can get someone to buy. If Disney buys it you still get the price that you offered it to someone else so it has little impact on the seller, it is the buyer that is out of the contract.

 

[bookwormde]

I am really surprised that DVC has not instituted a “transfer or estopple fee” like almost all other time share companies have for resale contracts, of course it would have to also apply to DVC’s resales also (but they could adjust the price to make up for it).

bookwormde

 

[Dean]

what's so illegal about this scenario???

Because it's fraud to generate a RE contract for the purpose of triggering ROFR without intent of actually selling it just like it's fraud to put one price and actually charge another. Now if you were prepared to actually complete the sale including changing the deed, that is not illegal. At a cost of somewhere between $50 if you do it all yourself and $400 for a full closing, that's quite a gamble. Plus you'd need a 1099 tax form as a RE sale. For a spouse you could change the deed without selling it so I'm not sure DVD would even let that go through, especially if the spouse is not on the contract already. It was the quoted "buy it" that suggested the poster you quoted was not intending an actual sale but merely a submission for the purpose of selling it by ROFR activation. DVC could simply refuse to address it either way in this case where you would not have a ROFR waiver. You could then legally complete the sale if you wanted as long as the closing date you gave was at least 30 days after the date of submission to DVD. Or they could simply give you a ROFR, which is likely what they'd do in this situation. I doubt they'd report it as fraud but they could.

I don't think for a second DVD will start buying up all smaller contracts but I wouldn't be surprised if they raised the buy back price somewhat for BLT or any resort for that matter. And it wouldn't surprise me if they re-instituted the transfer fee at the previous $100 which is the # that is within FL law from my reading. Remember the main purpose of ROFR is to herd buyers to retail but not necessarily to catch all the strays. Even at lower prices they don't make any money on the buy backs until you get over around $20 differential AND they can actually sell the points at the higher price. Even then they're competing with their retail projects costing them money on that end.

 

[Dean]

I am really surprised that DVC has not instituted a “transfer or estopple fee” like almost all other time share companies have for resale contracts, of course it would have to also apply to DVC’s resales also (but they could adjust the price to make up for it).

bookwormde

They had a transfer fee for a long time set at $100. They then raised it to $200 maybe 4-5 years ago then after only a short time, totally did away with it. As I mentioned above, my reading of FL statutes suggests this is not allowable under FL law at this level and I know it was reported to the State of FL as such. I'll speculate (because I truly have no info otherwise) that the removal of the fee was related to an agreement with the state. I wonder if there are any members here who paid the $200 fee and did they get a refund of any type. I don't recall seeing any info about it at the time, only that the transfer fee had been eliminated.

 

[Dean]

Let me see if I understand this...

Since Disney is raising the BLT minimum to 100 points in January, I could add-on, say, 3 50 point contracts right now at $112/point.

Then, next year or later, when 50 point BLT contracts are a thing of the past...a "collector's item", I could sell them for pretty much any amount that someone would pay, right? It would seem that if you could ONLY get a 50 point BLT contract via resale, then the seller could charge whatever the "market" would bear. If someone REALLY wanted my 50 points at BLT, I could ask $120/point for them. Would Disney ROFR a contract that is priced higher than what they are selling them for?

I have no interest in doing this. I'm just wondering if it's even possible.

I doubt it's be worth it for a possible profit of maybe $1000 on 150 points on an investment of $17000. If you paid commissions that'd eat up maybe $2000 of the value. But it you wanted 50 and could get a reduced price by buying 100, it might make more sense in that situation for selling the second 50. I contemplated that approach with my 4*25 pt add on at AKV.