Talk to me about the Maintenance fees

[abbyndrewmom]

We are really close to deciding to buy in but we keep coming back to the maintenace fee. More the fear they could go up as the resorts age. What are your feelings? How did you get arounds these fees in your minds.

Also a question about MB, the rep we talked to at WDW said we could only get this if we bought on property (while staying in WDW.) It seems to me this is not true has anyone else heard this.

 

[dianeschlicht]

I can't answere about MB, but our mainance fees at OKW (the oldest DVC resort) have gone down over time. I think a resort as well maintaned as the DVC resorts seem to be shouldn't depreciate as much over time because they have been kept up all along. I would not be concerned about the dues rising.

 

[Firefighter Mickey]

By Florida law, dues cannot increase more than 15% in a single year. However, you could still have a situation where there was a special assesment (say something major happened which wasn't covered fully by insurance), and I believe these are outside of that limit.

Dues have gone down slightly at OKW over the last few years - however, this decrease was largely a result of lower than expected property taxes, coupled with some rather aggressive (but probably justified) cost controls that DVC put into place - for example, the "pay as you play" program. I would not necessarily expect this trend to continue.

One of the things I like to look at is the reserve accounts - that is, the amount of money being set aside for major rennovations of the resort. DVC has very healthy reserve accounts and is very good about keeping the property well maintained (there's that high Disney standard at work). Given the overall maintenance and the reserve accounts, I personally don't have any fear that dues will rise sharply as the resort ages.

 

[drusba]

Unless rules have changed recently, MB is available when buyers purchase by phone from their home state.

Annual dues have increased on average about 2% per year during DVC's history (there were actually decreases this year). They will likely increase in the future as they are tied to labor and other costs for operating and refurbishing resorts which are themeselves likely to increase in the future. Understand that dues are cost based not cost plus profit based. In other words, you are charged for a share of the projected costs for operating and repairing the resort without a profit built in for Disney. Thus as costs increase dues can increase but there will not be just arbitrary increases to build in a profit for Disney. The exception is that DVD gets a management fee of about 12% of the annual operating dues per year and one could argue that is a profit to DVD. All timeshares have such management fees and the applicable percentage cannot be raised.

As the resorts age there will come times when major refurbishments have to be done (like replacement of roofs) but those costs are estimated now and part of annual dues are a reserve for such long term repairs in the future and the total reserve thus increases every year until such anticipated repairs are needed. As a result, age will not necessarily increase dues. More than 50% of your dues go to labor costs for running and maintaining the resorts and operating Member Services. If anything will drive increases in the future it is likely to be increases in labor costs.

 

[PamOKW]

All resorts saw a slight decrease in dues from 2000 to 2001. For background, here are the current dues for each DVC resort and a history of dues for OKW since 1993. As you can see, OKW dues have decreased every year since 1998.

OKW = $3.13
BWV = $3.83
HH = $3.32
Vero= $3.97
VWL = $3.63

OKW Dues Since 1993
2.5629
2.6986
2.8393
2.9883
3.1448
3.1743
3.164
3.1623
3.1272

 

[buckylarue]

I'm not sure how the MB program works for folks from out of the US; maybe there are different rules for those circumstances.

 

[boudreaux0]

MB is an option when you go to a presentation, you do not have to make a decision on site, but you do have to purchase within 5 days of your presentation to qualify.

 

[JackDiznee]

Originally posted by Firefighter Mickey
By Florida law, dues cannot increase more than 15% in a single year.

I remember being told by our guide that property taxes, not the total maintenance fees (of which the property taxes are a major component) are limited to a 15% increase. The total fee has no contractual or legal increase limit according to our sales presentation.

I hope FF Mickey is right - can anyone dig out a reference to this 15% rule?

 

[Dean]

Actually the POS states that the yearly fees cannot be increased by more than 15% per year without the vote of the regular membership (? wording). The Board cannot vote this one in.

 

[Firefighter Mickey]

I could very well be wrong; my memory says that Drusba looked into this sometime back, but I could be mis-remembering.

In any event, I wouldn't worry about an increase that large. DVC is budgeting the reserves well and is maintaining overall costs. Sure, I expect things to go up, but I don't expect significant increases as the resorts get older. This is not some fly-by-night timeshare operation where someone abscounds (sp?) with all the money.

 

[drusba]

The 15% limit per year applies to dues other than property taxes, i.e., the opposite of what was mentioned above. And it is a limit that cannot be exceeded absent a vote of the membership. That is a Florida law restriction and has little to do with reality as the likelihood of seeing a 15% increase is almost nil. As long as you have quality personnel who know what they are doing (as DVD does) when they estimate annual dues and what kind of repairs are likely in the future and need to be reserved, you are not going to see huge fluctuations in a year. Increases will occur as increases in labor and other costs occur and those generally do not suddenly go up 15% in a year.

 

[BobH]

Before you get too excited at the maintenance fees consider this.
I went to Vero Beach last June for a week. I sent my daughter to Old Key West for a week. I also took a weekend and went to the Woodstock Inn in Vermont. I am the type that would have traveled somewhere anyway even if I was not a DVC owner.
Since I used points I did not pay any room taxes. If I had paid room taxes I would have spent about $300 in tax for those trips.
I own 240 points and pay about $720 in OKW dues. The fact that
I would have paid $300 in room taxes means to me that I have an out of pocket expense of $420 per year for dues. I know it is rationalizing things but $420 per year out of pocket to get the flexibility of the DVC and access to the transportation system at WDW is a good value.

Also - on magical beginnings - I was allowed to buy back points over the phone. In Oct 2000 the offer was you could sell back 10% of your points up to a maximum of $2000 thus lowering your buy in cost.
I was advised by my guide not to take an official tour on site when I took a special trip to investigate or it might invalidate the magical beginnings offer that was available to me from home. I would encourage a tour, but make sure you are not affecting your range of options by taking one. (I did not need a tour I was committed to purchase after years of research) but make very sure you are not committing yourself to any type of MB offer that is available only while you are at WDW. Things may have changed since I bought in Oct 2000, but I'll bet you can still get a discount from home if you are careful about how you proceed, and if you have a truly good DVC Vacation Guide and you are a commited buyer I am sure they will help you read between the lines and understand your options.

 

[CarolMN]

The whole idea of maintenance fees bothered me for a long time. I just couldn't get past thinking that there was something "fishy" about paying so much money and then still having to pay annual "maintenance" fees. Even though my DH wasn't all that excited about purchasing DVC, he did point out that when we had the cabin, we still had to pay for (or make arrangements) for taxes, deck repair, periodic painting, water/well maintenance, appliance repairs, grass mowing, etc. He said that even though we own our home, we still have to do all those things and so why would it be different for DVC? After I thought about that, I felt much better and then was able to move on and consider the amount of the fees and all of the things the other posters have mentioned.

We are not at all sorry we bought. Good luck with your decision.