Selling my CCV contract and Disney exercised ROFR

[achinforsomebacon]

There aren't really "legal" ways to get out of it. The contract may or may not specify and/or limit the liability of either party in the event of a default, but it might not. Some of my contracts state that the seller would be responsible for all fees incurred by the either party. Other say you'd be "liable for any claims or caused action arising out of this paragraph." I'm not up to speed on Florida's real estate law, but I doubt Disney could compel specific performance. If the seller relists at a higher price, Disney probably could sue to recover the difference and still take the contract. Do you really want to see if Disney is willing to spend the money on attorney fees to maintain the integrity of the ROFR process? And are you willing to risk a judgment that includes you paying Disney's attorney's fees?

Why aren't there any "legal" ways to get out of it. Defaulting isn't illegal, it just might not be worth the hassle/cost/risk. Here's the clause from our contract:

SELLER DEFAULT: If Seller shall fail to perform its obligations under this Contract to make full settlement in
accordance with the terms hereof, Buyer may, as its sole and exclusive remedy, either (a) require Escrow Agent to
return the Deposit to Buyer or (b) pursue the equitable remedy of specific performance. Notwithstanding the
foregoing, Seller shall also be liable for any escrow fees and closing costs to the Escrow Agent, and sales
commissions owed to the Broker incurred as a result of notification of Seller's default.

What I think is odd is that we're defined as "Buyer" in the contract, but the section discussing ROFR doesn't transfer this title to DVD. It's probably a stretch, but it could be argued that the default clause is to protect the original buyer. And if it's supposed to mean DVD as the buyer if they exercise ROFR, wouldn't they be in default as the buyer if they change their mind about ROFR? This doesn't happen often but it's come up a few times recently.

I'm not saying I'd want to risk going up against Disney's lawyers, but they probably have better things to do than go after someone in this situation. If it started happening often, they might do something just to show that they're the boss.

 

[Paul Stupin]

Don't sellers change their minds all the time anyway? Its happened to many buyers on the ROFR board.

 

[DVCanadian]

I think the OP made it pretty clear that it's not about getting more money. It's that Disney is taking it from someone who wanted to buy it, and then will resell it at a profit. They would rather have someone other than Disney get the contract.

People are spitballing ideas - one is to relist it at a higher price to avoid Disney taking it. Disney thinks it's appealing at their current price, so they would need to list higher.

As for the legal contract, there are legal ways to get out of it. The seller would still owe the broker's commission unless they negotiated with them.

It's a lot of hoops to jump through and I'm not sure it's worth it, but the option is there.

Thanks for the info. I think ROFR decisions are a mystery, it isn’t always about the price.

The OP should probably back out, keep the contract, and never go to Disney again. That would really teach Disney a lesson.

 

[ammo]

A big round of applause for the OP thinking about the buyer! Buyers put in a lot of time and can incur some costs before reaching the ROFR process. Of all the parties involved, they are the ones who walk away with nothing if a contract gets taken. Nice to see a seller who cares.

 

[Best Aunt]

Is Copper Creek technically sold out? I was thinking that someone might be on a wait list to buy it direct. If Disney gets OP's contract through ROFR, that might mean that they can sell it to a family who will be very happy to get it. So I guess I don't understand why OP doesn't want Disney to get the contract. Disney will make money off it, but a happy family is a happy family, whether they purchase the contract direct or on the resale market.

 

[supersnoop]

A big round of applause for the OP thinking about the buyer! Buyers put in a lot of time and can incur some costs before reaching the ROFR process. Of all the parties involved, they are the ones who walk away with nothing if a contract gets taken. Nice to see a seller who cares.

How is this "thinking about the buyer?" The buyer still gets nothing, and the ROFR process doesn't change.

 

[stwaldman]

How is this "thinking about the buyer?" The buyer still gets nothing, and the ROFR process doesn't change.

It isn't, it's just angst towards the process (which sure, nobody needs to cheer on big public companies, I hear that)

 

[supersnoop]

Why aren't there any "legal" ways to get out of it. Defaulting isn't illegal, it just might not be worth the hassle/cost/risk. Here's the clause from our contract:

SELLER DEFAULT: If Seller shall fail to perform its obligations under this Contract to make full settlement in
accordance with the terms hereof, Buyer may, as its sole and exclusive remedy, either (a) require Escrow Agent to
return the Deposit to Buyer or (b) pursue the equitable remedy of specific performance. Notwithstanding the
foregoing, Seller shall also be liable for any escrow fees and closing costs to the Escrow Agent, and sales
commissions owed to the Broker incurred as a result of notification of Seller's default.

What I think is odd is that we're defined as "Buyer" in the contract, but the section discussing ROFR doesn't transfer this title to DVD. It's probably a stretch, but it could be argued that the default clause is to protect the original buyer. And if it's supposed to mean DVD as the buyer if they exercise ROFR, wouldn't they be in default as the buyer if they change their mind about ROFR? This doesn't happen often but it's come up a few times recently.

I'm not saying I'd want to risk going up against Disney's lawyers, but they probably have better things to do than go after someone in this situation. If it started happening often, they might do something just to show that they're the boss.

We're talking about "legal" in the civil sense; fulfilling contractual obligations. "Default" isn't a way out; it's a description of what happens if someone fails to do what they promised to do.

Your "seller default" paragraph includes "specific performance" which means a court could compel you to go through with the sale.

The whole concept of ROFR is that Disney has the option to substitute themselves for the "buyer" in the contract, so all terms remain the same, other than who's purchasing the contract.

 

[RamblinWreck]

I don't understand the disdain for ROFR.

It's one of the things that makes DVC better than other timeshares. It helps keep your resale value elevated.

 

[stwaldman]

I don't understand the disdain for ROFR.

It's one of the things that makes DVC better than other timeshares. It helps keep your resale value elevated.

Bingo, your contract isn't worth it's $50 ppt resale discount unless someone is paying that $50 ppt direct premium

 

[Yinn]

Am I the only one who's curious about the ROFR price of CCV? Or did I miss it in the thread?

 

[Paul Stupin]

They’re buying as high as $155

 

[velocistar237]

I just wanted to clarify that I have no intentions to breach contract or stick it to the man. I am not interested in hatching a plan to get more money from the sale, relist it, or anything of that nature. Most of my frustration stems from not knowing what to expect next.

From what I gather, most people who have their contracts bought back by Disney will hear something from Disney within a day or two. It's been several weeks for us and no word from anyone at Disney. My broker said that it could be up to 30 days before we hear anything. At this point, I absolutely have seller's remorse, and I do feel it would be less awful if I knew it was going to another family versus being sucked back into the Disney system, marked up and resold. I don't know if that makes sense but that's where I'm at. I'm sure when I get my check from Disney it will ease some of the sting, but I have no idea when that might be.

I was just genuinely curious to know if it was too late to back out, since Disney doesn't seem to be in any hurry to cut me a check and I have read many accounts of others who have changed their minds and experienced seller's remorse.

Thanks for all who responded.

 

[achinforsomebacon]

There has to be a limit on how long they can take to get this closed. Where is the whole ROFR process documented? Is it in the POS?

 

[Sandisw]

There has to be a limit on how long they can take to get this closed. Where is the whole ROFR process documented? Is it in the POS?

They step in as the buyer so they have until the same date as any buyer…the closing date.

Once that passes, I think the seller can walk away just as a buyer can.

 

[Yinn]

They step in as the buyer so they have until the same date as any buyer…the closing date.

Once that passes, I think the seller can walk away just as a buyer can.

Does that mean Disney can potentially ROFR a contract and then walk away from the deal? It would be a pretty messed up thing to do, but that's where my twisted mind went.

 

[stwaldman]

Does that mean Disney can potentially ROFR a contract and then walk away from the deal? It would be a pretty messed up thing to do, but that's where my twisted mind went.

They would be bound by the same contract terms as the original parties, so in theory there could be legal implications of doing so. In theory one could be cynical and say they could tinker with the market by rofring and walking and then challenge sellers to decide they want to lawyer up vs. Disney, but I don't think there's any evidence of them doing that historically.

 

[stwaldman]

They would be bound by the same contract terms as the original parties, so in theory there could be legal implications of doing so. In theory one could be cynical and say they could tinker with the market by rofring and walking and then challenge sellers to decide they want to lawyer up vs. Disney, but I don't think there's any evidence of them doing that historically.

Keep in mind how intentionally mysterious and vague ROFR as made out to be, I doubt they have an interest in making the process public knowledge through a legal dispute.

 

[Sandisw]

Does that mean Disney can potentially ROFR a contract and then walk away from the deal? It would be a pretty messed up thing to do, but that's where my twisted mind went.

Could they? Yes…anyone including Disney can break a contract. Would it be worth it for them? No.

 

[achinforsomebacon]

They step in as the buyer so they have until the same date as any buyer…the closing date.

Once that passes, I think the seller can walk away just as a buyer can.

I get that they step in as the buyer, but is this outlined in more detail somewhere? I'm asking because our contract has an assignability of contract clause that states "this contract is not assignable". I thought that meant that the contract must stay between the original parties i.e. if ROFR was exercised, the original contract wouldn't matter anymore.

Our contract also mentions that Disney may exercise their ROFR, but it doesn't really clarify what that means. I would think this would be a good place to have something stating that Disney steps in as the buyer and agrees to all terms of the original contract. Maybe other contracts are clearer.