Should OKW 2042 dues be different to OKW 2057

[JETSDAD]

OKW legally only has one expiration date. Some people have signed quit claims that give Disney that future term between 2042 and 2057. If you have signed a quit claim then you have agreed to give Disney your rights in between 2042 and 2057....it doesn't mean that your lease ends in 2042 but rather that you gave away your rights beyond 2042. If you were to sell/give me your contract rights beyond 2025 you would still be responsible for the current costs that would ultimately benefit me instead of you.

 

[CaptainAmerica]

OKW legally only has one expiration date. Some people have signed quit claims that give Disney that future term between 2042 and 2057. If you have signed a quit claim then you have agreed to give Disney your rights in between 2042 and 2057....it doesn't mean that your lease ends in 2042 but rather that you gave away your rights beyond 2042. If you were to sell/give me your contract rights beyond 2025 you would still be responsible for the current costs that would ultimately benefit me instead of you.

Does this mean that owners at other resorts will be able to book OKW at 7 months through 2057?

 

[JETSDAD]

Does this mean that owners at other resorts will be able to book OKW at 7 months through 2057?

I think they should be able to. I would have to read through the agreement between OKW and the rest of the resorts though to be sure. The entirety of OKW was extended though (it states that right in the quit claims).

 

[Ruttangel]

You should pay for a fraction of the one that will happen in 2045.

Making up numbers for easy math to illustrate my point. Pretend, for this example, that there's no distinction between Hard Goods, Soft Goods, pools, lobbies etc. A refurb is a refurb in this example. If the resort is refurbished in 2040 and the next refurbishment is scheduled for 2050, when you exit in 2042, the reserve should have a balance of roughly 20% of the expected cost of the 2050 refurb because you "used" that depreciation.

Well, now you're treating OKW differently to any other DVC resort which was my original point, asking if that was correct.

 

[JETSDAD]

From the multi-site POS:

"Lake Buena Vista Resort shall mean the Disney Vacation Club at WALT DISNEY WORLD
Resort, a leasehold condominium, located in Orange County, Florida. Lake Buena Vista Resort is
sometimes alternatively referred to as “Conch Flats” or “Disney’s Old Key West Resort” in certain
materials, including, without limitation, promotional and informational materials."



"(iii) The term of the Vacation Ownership Plan for the Lake Buena Vista Resort and
the Animal Kingdom Resort will continue through January 31, 2057, which is the duration of Ownership
Interests at each of these DVC Resorts."

"At the end of the term of each DVC Resort, the Disney Vacation Club will contain only the
DVC Resorts for which the term has not expired. For example, after January 31, 2042, the Disney
Vacation Club will contain only the Grand Californian Resort, the Bay Lake Tower Resort, the Lake
Buena Vista Resort, the Saratoga Springs Resort, the Animal Kingdom Resort, the Aulani Resort, the
Grand Floridian Villas, the Polynesian Villas & Bungalows, the Copper Creek Villas & Cabins, and
the Riviera Resort all of which have a term ending after January 31, 2042."

 

[CaptainAmerica]

Well, now you're treating OKW differently to any other DVC resort which was my original point, asking if that was correct.

No, I'm saying that should be the case at every resort. If you "leave" Disney a resort that is 20% "used," the reserve at exit should have a balance to cover 20% of a refurb.

 

[Ruttangel]

No, I'm saying that should be the case at every resort. If you "leave" Disney a resort that is 20% "used," the reserve at exit should have a balance to cover 20% of a refurb.

Doesn't sound right to me, but happy to hear if others agree or not

 

[KAT4DISNEY]

No, I'm saying that should be the case at every resort. If you "leave" Disney a resort that is 20% "used," the reserve at exit should have a balance to cover 20% of a refurb.

Agreed if the building is leased and that's part of the terms. That is not the case with any of the resorts afaik. You would have to find something in the land lease itself about what condition any improvements shall be turned over.

 

[HashberryOTG]

There is a portion of that roof "used" each year. You are essentially paying into that capital fund to help cover the cost of that usage, since the reason that roof needs replaced is due to current use. That there is a capital fund to use if anything comes up while you are an owner is due to previous members putting into those funds. When a new roof happens to get paid for actually doesn't matter. It's not about when the cash is spent (when the roof gets updated), it's about when it's used.

 

[Ruttangel]

There is a portion of that roof "used" each year. You are essentially paying into that capital fund to help cover the cost of that usage, since the reason that roof needs replaced is due to current use. That there is a capital fund to use if anything comes up while you are an owner is due to previous members putting into those funds. When a new roof happens to get paid for actually doesn't matter. It's not about when the cash is spent (when the roof gets updated), it's about when it's used.

Yeah, but if I have a capital asset I depreciate over it's useful economic life, ie for BRV that's 2042 for OKW they could be doing that til 2050 after my contracts useful economic life

 

[Sandisw]

They won't. That's what I'm getting at, OKW 2042 capital reserves should wind down in a similar vein to all other 2042 resorts will. They shouldn't be kept high to cover post 2042 projects just because there are owners there until 2057. It's a complete mess because of the ownership split.

Except, if I understand the whole quit claim situation, you basically are expiring in 2057 but allowing DVD to take over and pay the dues for those extra 15 years

So, I don’t see it as something those who bought resale knowing this should be charged less right now.

 

[chalee94]

Ok, so bringing this back to the dues. Let's assume my resale purchase included a signed quitclaim. Fine, I get ejected from the condo on 31st Jan 2042.
Therefore my dues should be subsidised from a certain date, let's say 2030 to exclude certain capital items?

It has come up before - yes. How the reduced dues will be implemented (assuming they follow through) is still up in the air:

OKW Extension Papers & Lockout Mentioned | Page 2 | The DIS Disney Discussion Forums - DISboards.com

DVC92 said:

This was a complaint I initiated with the Florida Timeshare Bureau concerning the extension. Responding to the complaint, DVD agreed to provide a developer subsidy to all members who elect to not participate in the extension. The Executive Counsel for WDW, John McGowan stated:

"....we agree that members who elect not to extend should not be required to fund capital repairs after 2042. However, Section 721.13(3)(c)(3), F.S., provides that full funding of reserves can only be waived by a majority of the members. Consequently, as part of the OKW Extension, DVD, as developer, has already agreed with the association to provide a developer subsidy at the appropriate time (the association is obviously not yet funding capital reserves for capital replacements after 2042) to all members who elect not to participate in the OKW Extension. The purpose of the developer subsidy is to pay a portion of such member's capital reserve assessments in an amount sufficient to fully fund capital reserves and to relieve all such members of the obligations to fund capital replacements after 2042. Thus, DVD has committed to the association that neither.....nor any other members who elect not to extend will pay any reserve assessments for capital improvements made after 2042."

 

[JELLYROLLS4LIFE]

It seems like the easiest way for Disney to do this would be to refund the 2042 contracts at the end of their 2041 use year with a portion of whatever is left in the reserve funds. For example, if there is $40 Million in the reserve fund, and there are 7.67 million points at OKW, then members with 2042 contracts should be refunded $5.21 per point they own at the start of 2042. That money would then be replaced when Disney sells contract extensions at whatever price per point they are offering.

My guess is that Disney is eventually going to offer contract extensions for all owners at a certain point again, not at the price offer before ($15 per point) but perhaps at say $40 per point which would still. Assume they do this in 2037 I bet 90% of owners would do it rather than lose their timeshares in 5 years.

it is amazing to think that in 2042 BRV, BCV, BWV, as well as VB and HHI will drop off the booking window, and even if they come back (and they will except HHI and VB) those that have bought resale since 2016 will be unable to book them.

 

[JETSDAD]

It seems like the easiest way for Disney to do this would be to refund the 2042 contracts at the end of their 2041 use year with a portion of whatever is left in the reserve funds. For example, if there is $40 Million in the reserve fund, and there are 7.67 million points at OKW, then members with 2042 contracts should be refunded $5.21 per point they own at the start of 2042. That money would then be replaced when Disney sells contract extensions at whatever price per point they are offering.

My guess is that Disney is eventually going to offer contract extensions for all owners at a certain point again, not at the price offer before ($15 per point) but perhaps at say $40 per point which would still. Assume they do this in 2037 I bet 90% of owners would do it rather than lose their timeshares in 5 years.

it is amazing to think that in 2042 BRV, BCV, BWV, as well as VB and HHI will drop off the booking window, and even if they come back (and they will except HHI and VB) those that have bought resale since 2016 will be unable to book them.

Assuming they all come back in with the same terms as Riviera, it would be resale points after Jan 2019 that wouldn't be able to book them.

 

[chalee94]

It seems like the easiest way for Disney to do this would be to refund the 2042 contracts at the end of their 2041 use year with a portion of whatever is left in the reserve funds. For example, if there is $40 Million in the reserve fund, and there are 7.67 million points at OKW, then members with 2042 contracts should be refunded $5.21 per point they own at the start of 2042. That money would then be replaced when Disney sells contract extensions at whatever price per point they are offering.

My guess is that Disney is eventually going to offer contract extensions for all owners at a certain point again, not at the price offer before ($15 per point) but perhaps at say $40 per point which would still. Assume they do this in 2037 I bet 90% of owners would do it rather than lose their timeshares in 5 years.

it is amazing to think that in 2042 BRV, BCV, BWV, as well as VB and HHI will drop off the booking window, and even if they come back (and they will except HHI and VB) those that have bought resale since 2016 will be unable to book them.

Paragraph 1 is an interesting idea for owners who hang in until 2042. But for owners who are paying into the Capital Reserve fund from 2035 to 2040 and sell during 2040, it wouldn't be that appealing. Other resorts with similar management mistakes (VB and AUL) already have subsidized contracts - it's not brain surgery.

I owned OKW when the original extension offer was made. I will bet they will absolutely NOT offer extensions again. Disney inflation from $15-25 per pt (the original price for extending) is already well past $40 from 2008 to now. Some owners have already challenged Disney's legal right to charge for the extension and seem to have grounds to make that case. If you had done some research, you would know extension offers in the future for OKW are extremely extremely unlikely. It was a trainwreck that won't be repeated.

(And if they were setting a price for 15 years of OKW in 2037, it would be near the price for a new 50 year contract as most of the value of the contract is in the earlier years of the contract anyway. So if contracts move from $180 per pt in current prices to $300 per pt in 2037, you'd still be looking at an asking price for the legally dubious extension of around $250 or so...which get a "hard pass" from most who are planning to exit in 2042.)

And I assume you are only talking about OKW in paragraph 2 since BCV and all will require new contracts with new expiration dates in order to be subject to the newer booking restrictions for resale owners...

 

[LAX]

Perhaps I am not understanding the issue at hand from OP's perspective, but let's say all BLT contracts end at 2057 (I am a BLT owner) and I sell mine in 2042, just as the OKW 2042 contracts would end. I obviously would get some money back from the sale and OKW owners won't.

However, I have been paying (and will have paid) the same dues as other BLT owners would through 2042, including who elect to keep their contracts through the end (2057). Am I due some kind of dues adjustment because I decide to end my contract early (by selling) since the argument is presumably on paying into reserves that would not longer benefit me when I am no longer an owner? How is this different from current OKW 2042 owners who decided to purchase contracts that end in 2042 instead of 2057?

LAX

 

[chalee94]

Perhaps I am not understanding the issue at hand from OP's perspective, but let's say all BLT contracts end at 2057 (I am a BLT owner) and I sell mine in 2042, just as the OKW 2042 contracts would end. I obviously would get some money back from the sale and OKW owners won't.

However, I have been paying (and will have paid) the same dues as other BLT owners would through 2042, including who elect to keep their contracts through the end (2057). Am I due some kind of dues adjustment because I decide to end my contract early (by selling) since the argument is presumably on paying into reserves that would not longer benefit me when I am no longer an owner? How is this different from current OKW 2042 owners who decided to purchase contracts that end in 2042 instead of 2057?

LAX

1st - BLT contracts end in 2060.

While you own BLT, you will participate in all annual costs of the resort. You would not be due any adjustments based on your personal asset decisions.

When I purchased OKW, the contract stated that it expired in 2042.

Disney - in a very iffy legal maneuver - decided to unilaterally change that contract so that the ground lease now expires in 2057. I quitclaimed my rights past 2042 to Disney so that Disney takes ownership of my unit of OKW on Feb 1, 2042, which makes it seem logical to me and Disney's legal counsel that they would be responsible for costs that benefit that period of time and later.

Even for today's buyers of resale OKW-42 contracts, their ownership rights only extend through 2042 even though the underlying land lease was extended to 2057. It still goes back to the contractual language and not so much the aspect of whether you will benefit personally.

Your rights to use BLT continue through 2060, so if you were to sell in 2057, you likely contributed to costs that will not benefit you personally - but that is a non-issue from a contractual standpoint. While you participated in time sharing with other BLT owners in 2056, you paid your share of the costs.

But if you owned BLT to the end and Disney tried to charge you in 2059 for new furniture and a brand new roof that would only benefit them in 2060 as the new owners of the resort, that would be a problem legally.

 

[LAX]

1st - BLT contracts end in 2060.

While you own BLT, you will participate in all annual costs of the resort. You would not be due any adjustments based on your personal asset decisions.

When I purchased OKW, the contract stated that it expired in 2042.

Disney - in a very iffy legal maneuver - decided to unilaterally change that contract so that the ground lease now expires in 2057. I quitclaimed my rights past 2042 to Disney so that Disney takes ownership of my unit of OKW on Feb 1, 2042, which makes it seem logical to me and Disney's legal counsel that they would be responsible for costs that benefit that period of time and later.

Even for today's buyers of resale OKW-42 contracts, their ownership rights only extend through 2042 even though the underlying land lease was extended to 2057. It still goes back to the contractual language and not so much the aspect of whether you will benefit personally.

Your rights to use BLT continue through 2060, so if you were to sell in 2057, you likely contributed to costs that will not benefit you personally - but that is a non-issue from a contractual standpoint. While you participated in time sharing with other BLT owners in 2056, you paid your share of the costs.

But if you owned BLT to the end and Disney tried to charge you in 2059 for new furniture and a brand new roof that would only benefit them in 2060 as the new owners of the resort, that would be a problem legally.

You are assuming the dues will decrease towards the expiration of contracts because there will be less (or even no need) for a capital reserve at that time. But wouldn't that be the case for all resorts? By the time 2059 rolls around, DVC should just charge whatever is needed to keep up BLT until the contracts end in Jan 31, 2060, but I doubt that will happen. Does that mean all owners keeping until their contract ends should expect some sorts of "refund" of their dues?

LAX

 

[chalee94]

You are assuming the dues will decrease towards the expiration of contracts because there will be less (or even no need) for a capital reserve at that time. But wouldn't that be the case for all resorts? By the time 2059 rolls around, DVC should just charge whatever is needed to keep up BLT until the contracts end in Jan 31, 2060, but I doubt that will happen.

You have some exposure to timeshares, right?

You should understand that a stay at the end of a refurb cycle in any room or villa can feel a bit less perfect than right after major work has been done?

At contract expiration, the resorts should feel like they are at the end of all of their refurb cycles. Solid but not pristine. That is what is in the contracts, so yes, I am not assuming that dues will necessarily decrease but the capital reserves line item would absolutely decline unless there is mismanagement.

This should not be that complicated to understand.

 

[KAT4DISNEY]

You are assuming the dues will decrease towards the expiration of contracts because there will be less (or even no need) for a capital reserve at that time. But wouldn't that be the case for all resorts? By the time 2059 rolls around, DVC should just charge whatever is needed to keep up BLT until the contracts end in Jan 31, 2060, but I doubt that will happen. Does that mean all owners keeping until their contract ends should expect some sorts of "refund" of their dues?

LAX

In essence that is exactly what owners should expect. There shouldn't be any continued capital contributions say for new roofs in January of 2060. Or 2059 or 2063 etc.

In the instance where you voluntarily decide to sell BLT in 2042 the thought would be that capital reserves are part of what you are selling. You've made the choice to be paid by someone else to take over the ownership. 2042 OKW owners are just done with nothing to sell. If you held onto BLT until 2060 then you'd be comparable to what should have happened with all OKW owners. And in that instance would you want to be paying for project that would be done at BLT in say 2065?