ROFR Information from contracts

[Tunseeker1]

I have been reading about the 30 day window for Disney and something has always been nagging me, so I looked at my original documents to make sure of something.

There is nothing that says that Disney has 30 days to make a decision.

The condo docs state that you have to forward the contract to Disney at LEAST 30 days before closing.

Disney has until the stated closing date to make their decision.

Most contracts are written for allowing delays in paperwork/financing/other, to make sure that there is enough time to get the closing paperwork finalized before the timer runs out.

If you have a contract that is sent to Disney May 1 and the stated closing on the contract is July 1 or before, Disney has until July 1 to take it in ROFR, not June 1.

 

[wdrl]

Here is the language from the Bay Lake Tower Master Declaration regarding DVD's Right of First Refusal:

13.1 ALIEN ABILITY OF UNITS OR OWNERSHIP INTERESTS.

". . . However, if an Owner or Cotenant desires to sell, transfer, assign, or hypothecate that Owner's Unit or Ownership Interest, DVD has the right of first refusal to purchase the Unit or Ownership Interest in the Unit under the same terms and conditions as are offered to or by a bona fide third party, including financing. Accordingly, Owners or Cotenants desiring to sell their Unit or Ownership Interest must notify DVD in writing no less than thirty (30) days in advance of the proposed closing date of their intent to sell and must include a copy of the proposed transaction reduced to writing in all respects. On receipt of such written notice, DVD may determine prior to the proposed closing date whether to exercise its right of first refusal set forth in this Article 13. If DVD elects to exercise its right of first refusal, DVD must notify the owner or Cotenant in writing of such election, and the purchase by DVD must be closed on or before the proposed closing date. If DVD fails to notify the Owner or Cotenant of its election to exercise its right of first refusal prior to the proposed closing date, then the Owner or Cotenant may proceed to close on the transaction with such bona fide third party. . . ."
​

As you noted, DVD must be given at least 30 days to decide whether it will ROFR a resale transaction. And, I suppose, if a closing is set 180 days into the future DVD could come back on Day #179 and exercise ROFR. However, practically speaking, this doesn't seem to be happening. DVD seems to act on ROFR issues within a 30 day period.

I actually interpret Section 13.1 in a slightly different manner. A closing company could set the closing date at 31 days after it has notified DVD of the intent to sell. The closing company could then close on the property on Day 31 unless DVD has exercised ROFR. In other words, there is no need for the closing company to delay closing after 30 days just because DVD has not issued a Notice. However, none of the closing companies take this approach, partly because they have to allow time for the notices to be sent to and received from DVD.

I know the ROFR process is somewhat disconcerting for resale buyers. But DVD doesn't exercise ROFR all that often. April 2012 had an unusually high number of deeds ROFRed, but it only ROFRed 18 for the month. The prior 12 month period only saw an average of 6.7 ROFR deeds per month. In April 2012, DVD also issued 324 Notices of Waiver of ROFR on both gratuitous and non-gratuitous transactions.

 

[ELMC]

I agree that the language is a bit fuzzy. But I have read on the DIS and another message board these two things:

1) if you haven't heard back from Disney after 30 days then you are free to proceed with the closing.

2) I know of an actual case where Disney exercised ROFR on day 34 and it was contested by the buyer. Disney backed off in this case and the buyer was allowed to proceed with the transaction.

I would say that it's a gray area for sure.

 

[Tunseeker1]

I really don't see it as fuzzy or grey. It's pretty black and white.

Just because Disney is getting it done in 30 days doesn't mean it will always be that way.

I have read a few times that once you hit 30 days it's yours, but Disney could take 40 days and not have to let you have it.

 

[npcougar]

I agree that the language is a bit fuzzy. But I have read on the DIS and another message board these two things:

1) if you haven't heard back from Disney after 30 days then you are free to proceed with the closing.

2) I know of an actual case where Disney exercised ROFR on day 34 and it was contested by the buyer. Disney backed off in this case and the buyer was allowed to proceed with the transaction.

I would say that it's a gray area for sure.

I was told #1 is not true. I asked my sales person and closing company about it. So your milage may vary. Companies probably don't want to get on Disney's bad side.

 

[ELMC]

I really don't see it as fuzzy or grey.

Of course you don't. But you also see VB as a good value, so I've gotten used to you and I seeing things differently.

 

[AllieV]

Ok now I'm rethinking that contact that can't close until September

 

[Tunseeker1]

Of course you don't. But you also see VB as a good value, so I've gotten used to you and I seeing things differently.

Lawyers won't think VB is a good value either, but they will see this as pretty clear!

 

[fmer55]

I really don't see it as fuzzy or grey. It's pretty black and white.

Just because Disney is getting it done in 30 days doesn't mean it will always be that way.

I have read a few times that once you hit 30 days it's yours, but Disney could take 40 days and not have to let you have it.

There was a case on another board where disney excersized ROFR after 30 days, the buyer questioned disney on it and she was awarded the contract.

 

[Tunseeker1]

There was a case i believe on another board where disney excersized ROFR after 30 days, the buyer questioned disney on it and she was awarded the contract.

Disney can do that, but they don't have to.If the buyer pressed the issue Disney would win.

Disney would rather have a new owner paying in then points.
If they ROFR a contract to fill a sale then I don't think they will change their mind.

 

[fmer55]

Disney can do that, but they don't have to.If the buyer pressed the issue Disney would win.

Disney would rather have a new owner paying in then points.
If they ROFR a contract to fill a sale then I don't think they will change their mind.

Says who? they were threatened and relented. Your attempting to figure out when, where or why they ROFR and as we all know, we have no idea when/why they ROFR. Not looking to pick a fight just citing past precedence much as the afforementioned lawyers would do.

 

[Tunseeker1]

Says who? they were threatened and relented. Your attempting to figure out when, where or why they ROFR and as we all know, we have no idea when/why they ROFR. Not looking to pick a fight just citing past precedence much as the afforementioned lawyers would do.

I never tried to guess the ins and outs of ROFR, I just pointed out a FACT from the documents.

You are using an example from a public forum for your "facts"
I am using the language from a legal document.

No one knows if after 40 days Disney took a property at ROFR or if there was more going on behind the scenes.

I know that Disney sends documents to the agent when they make a decision on ROFR. I have not seen that in the case you mention that says that Disney bought the contract. Have you?

Past precedence will not overturn a written contract.

In the past Disney allowed people with resales to have the same privileges. The new Legal documents say that resale does not.
Do you think you can tell a judge that past precedence overrules a contract?
Not likely.

If Disney takes more then 30 days on a contract you buy, are you going to take on the expenses to fight it?

 

[ELMC]

I never tried to guess the ins and outs of ROFR, I just pointed out a FACT from the documents.

You are using an example from a public forum for your "facts"
I am using the language from a legal document.

No one knows if after 40 days Disney took a property at ROFR or if there was more going on behind the scenes.

I know that Disney sends documents to the agent when they make a decision on ROFR. I have not seen that in the case you mention that says that Disney bought the contract. Have you?

Past precedence will not overturn a written contract.

In the past Disney allowed people with resales to have the same privileges. The new Legal documents say that resale does not.
Do you think you can tell a judge that past precedence overrules a contract?
Not likely.

If Disney takes more then 30 days on a contract you buy, are you going to take on the expenses to fight it?

You seem to know a lot about these matters. I'm curious, what is your experience with DVC and timeshares in general?

 

[Tunseeker1]

I bought at okw in the late 90s after my parents bought at hhi.
I have bought direct and resale(first time was recently)
After many trips of sending siblings and family I am starting to use my points myself now with 2 toddlers.

As for other timeshares I have been around them a decent amount because just about everyone my parents work with bought one at some point and my in-laws own a few themselves.

When I bought the game was a bit different because Disney just bought back most and the resale market was not really there because the Internet wasn't as popular.

What's your experience?

 

[ELMC]

I bought at okw in the late 90s after my parents bought at hhi.
I have bought direct and resale(first time was recently)
After many trips of sending siblings and family I am starting to use my points myself now with 2 toddlers.

As for other timeshares I have been around them a decent amount because just about everyone my parents work with bought one at some point and my in-laws own a few themselves.

When I bought the game was a bit different because Disney just bought back most and the resale market was not really there because the Internet wasn't as popular.

What's your experience?

Well I can say that it's not as extensive as yours. I don't know that many people who own timeshares. So to compensate for my relative inexperience I try to research everything I say on here to make sure that I am not spreading false information or giving misleading advice.

 

[Tunseeker1]

My parents sold a condo in hhi to buy Dvc because it made more sense.

As for timeshare horror stories my bil is a lawyer in fla that deals with all the craziness in property law. I have heard some horror stories