The new resale rule: The Empire Strikes Back

[nytimez]

When the dust settles in a few months, I think many people will be stunned at what little difference this makes in the resale market, especially as compared to other factors like the economy.

Fact: Many purchasers don't care or use these benefits.
Fact: Many people will still want to pay less than what Disney charges.
Fact: Many people will still need to sell.
Fact: The only way for people to buy at a discount from a willing seller is to pay more than ROFR rates.

Conclusion: Not that big a deal.

 

[crisi]

Even still, to just roll over without making a stink on a change like the one they are making is just plain disturbing.

Any benefit I could gain from "making a stink" is not worth the time/money/effort/negative consequences creating the stink. What is disturbing is that someone would pursue legal action over a company exercising its contractual rights. That is not a common sense thing to do. Unless someone has proof in hand that Disney's sales practices are deceptive (and its hard to get deceptive enough in advertising), its spitting in the wind.

 

[CMOORE185]

Even still, to just roll over without making a stink on a change like the one they are making is just plain disturbing.

Make a stink about what? A stink that my DVC is no different after the change than it was before the change? The only thing changing for current owners is that our resale value may decrease somewhat (and I say may, it is no certainty). I knew going into it that resale values could plummet at any time. Frankly I have enough things to worry about than making a stink over something this trivial.

 

[Lynne M]

I have no complaint as I am not a member yet, what I can say is that I have NEVER seen a copy of the contract I am signing with Disney as they dont provide it until later in the process I guess. I did however base my decision along with many others in that I could use my points at ANY resort. If they take that which you are calling perk away. There's going to be hell to pay on my end. I will also say, ALL of my friends and I have several who have points bought on the fact they can stay in ANY resort. Not one of them believe they are perks and all have said the same thing as I, that they were told this is how it works. There is plenty of room for a Class Action on this should they try something like that.

If you're purchasing through Disney, you will get a copy of the contract (in a whole box of paperwork) before you sign, and plenty of time to review it. When I bought, I spent several evenings going through the paperwork. And then a good bit of time on the web, looking for owners' experiences, good and bad, before I signed the paperwork and sent it back. I'm comfortable, but not wealthy, and $10,000 is a lot of money for me to spend without being really, really sure of what I'm getting.

If your friends aren't aware that what they bought was the right to stay at their home resort....they didn't read the contract.

Again, if someone buys real estate based on a marketing spiel, without reading the legal paperwork for themselves....well, then there will be unpleasant surprises.

There are no grounds for a lawsuit, class-action or otherwise. Disney has done nothing that violates the contract. As for deceptive advertising.....if the marketing materials said that you would be able to use points for Disney cruises for the life of your contract, that's deceptive. If the salesperson said that to you, that's deceptive.

That the marketing materials and the sales person didn't specify which features of the program are subject to change....that's not deceptive. Because the contract does tell you that. Disney DOES tell you that. If people choose not to read the documentation......that's not grounds for a lawsuit.

 

[crisi]

If you're purchasing through Disney, you will get a copy of the contract (in a whole box of paperwork) before you sign, and plenty of time to review it. When I bought, I spent several evenings going through the paperwork. And then a good bit of time on the web, looking for owners' experiences, good and bad, before I signed the paperwork and sent it back. I'm comfortable, but not wealthy, and $10,000 is a lot of money for me to spend without being really, really sure of what I'm getting.

It IS a weakness of buying resale that you may not see the contract between you and Disney during the purchase process. Or ever. You can call Disney and they'll send you the contract AFTER you buy - and your reseller might be able to get you a copy beforehand. But a lot of times we say "well, you didn't read your contract" and if you bought resale, you might never have SEEN the contract.

 

[lugnut33]

This makes no sense to me at all. Did you not purchase the points to use them?? I know I did.

It is not as if you are buying 100 BLT points from Disney, then come to find out, "Oh, sorry. Those points can no longer be used to book a vacation at BLT". THAT would cause the value of your points to plummet.

Sure it makes sense. Yes, I did buy the points to use them.

As I indicated in my original post I don't own a lot of points and don't plan on selling them (I'm OK with what DVC has done). What I felt bad about were the people that are going to have to sell their points. You know, lots of people end up having to sell for reasons beyond their control. They are the ones getting hit by a quick devaluation of the resale market.

 

[Lil' Grumpy]

i agree with nyt. 's observations.

also i think it goes back to why most buy dvc..isn't for resale
value but for wdw vacations.

as for making a stink? you got to be kidding. have you evulated

all the options? to me, it is way to little. there are many, many
things dvc can & should do. why? to "redirect" the dvc back
toward it's primary/selling objectives. & set limits on those
buying resales with no desires to stay there but to used @
the other resorts only.

let me get this straight , you think buying an used resale [car]
should be the same as buying a new car? the only thing you can
do is make a big stink as there isn't any other argument available.

are you a resale/used car person? or maybe our first guide?

 

[RobDoc]

Threaten legal action on Deceptive business practice in that the sales person tells you you get one thing then a year down the road that changes (im speaking more along the theory that they will eventually make it only points use in home resort). If your saying this is legal and legit to do, explain why you have so many fine print disclaimers throughout life. If they wanted to be legit the sales person could say "a perk you get" or preface everything by saying this COULD be taken away. They say nothing like that.

I have no complaint as I am not a member yet, what I can say is that I have NEVER seen a copy of the contract I am signing with Disney as they dont provide it until later in the process I guess. I did however base my decision along with many others in that I could use my points at ANY resort. If they take that which you are calling perk away. There's going to be hell to pay on my end. I will also say, ALL of my friends and I have several who have points bought on the fact they can stay in ANY resort. Not one of them believe they are perks and all have said the same thing as I, that they were told this is how it works. There is plenty of room for a Class Action on this should they try something like that.

Even still, to just roll over without making a stink on a change like the one they are making is just plain disturbing.

Hopefully, you are not beyond your rescision period so you'll have time for your attorney to review the documents and advise exactly what is promised - and just as importantly, what is not promised. I suspect with that sort of advice you will be surprised what you are basing your decision upon. If you are planning on basing any decision on the words of the salesperson, when the documents clearly state that they will take precendence over any verbal notice, I'd sure suggest reviewing the documents before committing to the purchase.

Salespeople (DVC Guides) can certainly tell you what the current policies regarding banking, borrowing, reservation priorities, and non-DVC options might be, but it would be the responsibility of any buyer to understand that any of those things can be changed (and all of those things can be changed according to provisions in the documents). IMO, it's not the Guide's place to try to cover every aspect of the legal documentation - their responsibility is to emotionally assist you with making the purchase.

At this time, the policy with purchases from Disney directly is that you and your friends can stay at any DVC Resort plus any other WDW Disney Resorts, DL resorts as well as Disney Cruise Line and even the Concierge Collection using their poitns. After March 20, resales purchasers will still have the ability to use their points at other DVC resorts, just not other Disney resorts, cruise or Concierge Collection.

Perhaps your attorney can advise regarding what "making a stink" might cost.

Good luck with your decision.

 

[RobDoc]

It IS a weakness of buying resale that you may not see the contract between you and Disney during the purchase process. Or ever. You can call Disney and they'll send you the contract AFTER you buy - and your reseller might be able to get you a copy beforehand. But a lot of times we say "well, you didn't read your contract" and if you bought resale, you might never have SEEN the contract.

I'd agree that can be a potential weakness for resale buyers - but would still emphasize that resale buyers do need to use due diligence before buying ... and that diligence includes reviewing the documents they are accepting with their purchase. Most of the resale brokers will provide a copy of the documents if asked and Disney will also provide a copy.

Those that choose to purchase without reviewing the documents need to be aware of the "Buyer Beware" concept.

Caveat Emptor.

 

[going/again]

You want them to operate differently, that's your prerogative. Tell them. You are. Don't think I have to take up your cause.

All our points are direct, still think this is wrong, they are making a subclass of members and that can't be right.

 

[cseca]

I guess I didn't make my point clear...
Most people when making a big purchase (which DVC generally is) will do some sort of research.

And yes houses and cars changes by the market... that's the point... the market... purely supply and demand.
DVC resales however most probably will change not purely by S&D, but by a rule change that we did not see coming after owning for 10 years. It is very similar to the Toyota owner who posted earlier... something changed by the maker that makes the market react.

Are you saying that all Toyota owners should be happy by the change? Of course not! It did not reflect the prior experiences and history of owners. Is there anything the owners can do about it? Yep, either keep or sell. Just like Disney.

My point is, the company made a change that "might" make a reasonable dent on the resale value. And not everybody will be happy about the change, especially the ones who's done a great amt of research on it.

Again, we can't do anything about it other than keep or sell. But that doesn't mean that we have to be happy about it?

 

[crisi]

All our points are direct, still think this is wrong, they are making a subclass of members and that can't be right.

I'd rather not see them make a subclass of members. But honestly, I think they should have stopped building resorts - or significantly slowed the pace. They've been adding DVC rooms like drunken sailors, that inventory has to move. If they had restraint they wouldn't NEED to create a subclass of members. However, if they are going to keep building resorts, they have to be able to sell those. They are increasing the supply - they have to make sure they maintain the demand. That means they have to drive people to buy direct and not resale.

In the past they did this with ROFR - it wasn't THAT much more expensive to buy through Disney. But now they really can't afford that investment on their books. Times are tough, even for really big corporations.

On the drunken sailor note, when I bought there was some amount of "IF DVC were to build another resort....." Now its pretty much a given that this is an expanding business for them - "WHEN they build another resort....." And yet, how many people can you expect to buy BLT for twice as much as you can get a VALK resale contract for - or wait a few years and get that BLT contract for significant less when DVC moves onto the next new thing.

 

[Chuck S]

All our points are direct, still think this is wrong, they are making a subclass of members and that can't be right.

There are different membership levels in many, many other timeshares. And this holds true for service levels in almost every other type of business, too.

Frequent Flyer Programs are free, but you get a bunch more points if you get an airline credit card which charges additional annual fees.

Most used cars retain little, if any, of the original new car warranty.

Coffee clubs, buy x number of beverages or pounds of coffee and get one free.

Target VISA users receive a 5% discount on all Target purchases. Those using a Walmart card receive a 3¢ per gallon discount at their gas stations. AARP members get discounts at Denny's, Walgreen's, Hilton hotel stays and many other venues.

How is this any different, really?

 

[StitchBuddy]

I really think this will all become a mute point. I think if people really do their research, they won't buy DVC. It is becoming way to limiting. I have read a complete contract when we were in the process of buying direct. Guess what, we reconsidered, because there are no guarantees for anything. So then we thought about buying resale, now not so much. I think this will backfire in a big way. I think that most people who buy DVC are pretty knowledgable when it comes to contracts etc... I also think most do believe they can get at least some of their investment (yes, I said investment, because it is money paid for future vacations) back if they need to sell. This is/was one of their big selling points, that it does some what hold it value compared to other times shares. That is one reason we thought about buying DVC vs other timeshares. Now they are no better than anyother timeshare, maybe worse. At least with Marriott you have a larger selection of places to travel.

 

[Chuck S]

I really think this will all become a mute point. I think if people really do their research, they won't buy DVC. It is becoming way to limiting. I have read a complete contract when we were in the process of buying direct. Guess what, we reconsidered, because there are no guarantees for anything. So then we thought about buying resale, now not so much. I think this will backfire in a big way. I think that most people who buy DVC are pretty knowledgable when it comes to contracts etc... I also think most do believe they can get at least some of their investment (yes, I said investment, because it is money paid for future vacations) back if they need to sell. This is/was one of their big selling points, that it does some what hold it value compared to other times shares. That is one reason we thought about buying DVC vs other timeshares. Now they are no better than anyother timeshare, maybe worse. At least with Marriott you have a larger selection of places to travel.

How is it a selling point when the documents, including the product understanding checklist that we all sign when purchasing direct, states differently? It may be something you personally consider as a selling point, but it certainly is not represented as a selling point to potential buyers by Disney.

 

[RobDoc]

All our points are direct, still think this is wrong, they are making a subclass of members and that can't be right.

This policy has not harmed anyone yet and won't for another 6 weeks. It will only affect resale buyers after March 20 and if they read current documentation before making the purchase, should be aware of the limitations for the contract they are buying. If those changes were something important to them, they can still purchase direct. If those changes were not important, then they can get a great deal via resale.

When OKW opened, the minimum purchase was 230 points and the World Passport Collection was based on that minimum. When the minimum was lowered in 1993, there was a caveat added to the documents that members buying at the lower number of points may not be able to enjoy all aspects of the membership. Changes to the DVC programs have been many over time and purchasers need to understand that this can and has happened in the past.

It's interesting that there are two "camps" for concern with this issue. Some seem to be concerned that it creates a "subclass" of members and others are convinced it will lower the resale value they expected (but were never promised in any way). As long as those buying resale after 3/20 are aware of the limitations (by reviewing current documents themselves), they may not consider themselves in a "subclass" - just that they found value in the DVC program even without access to the limited components. Purchasing is still one of their options. Those upset at the loss of value still need to recognize that DVC never suggested that they would do anything to maintain resale value (in fact there are warnings to the contrary in the documents) - and there is no evidence at this time that resale value will decrease at all because of this change.

Stay tuned!

 

[axfather]

whether you buy direct or not.

 

[tjkraz]

I'd rather not see them make a subclass of members. But honestly, I think they should have stopped building resorts - or significantly slowed the pace. They've been adding DVC rooms like drunken sailors, that inventory has to move. If they had restraint they wouldn't NEED to create a subclass of members. However, if they are going to keep building resorts, they have to be able to sell those. They are increasing the supply - they have to make sure they maintain the demand. That means they have to drive people to buy direct and not resale.

Construction really has been scaled back.

If you stop and think, everything they are selling now at Walt Disney World commenced as far back as 2006. That's when the CR garden wing closed and AKV was announced. Hundreds of rooms were months away from coming on line when the markets collapsed back in the fall of 2008. Four separate resorts (including the Treehouse Villas) opened in 2009 alone.

Certainly DVC found itself struggling to move that inventory over the last couple of years but I don't know that this policy change can really be traced back to the over-aggressive construction. If so, seems like they would have gone this route 2 years ago.

Aulani is under construction but it's fair to say that is driven by more than just DVC points demand. Given the hotel rooms, convention space, wedding pavilion, possible cruise tie-in and the $120 million they spend on land alone, clearly there are reasons beyond DVC which justified giving this project the green light.

As for WDW and DL, it's been about 18 months now since either one has had any new units under construction. I think that speaks to their awareness of the current marketplace.

I can relate to the theory that Disney should build less and concentrate on what they have now. But something also tells me that we as members would be no better off if DVC decides that it can no longer justify investments in the program.

 

[Chuck S]

whether you buy direct or not.

No, not at all. My point value will be exactly the same after March 20 as before. I can stay at my home resort for the same number of nights, based on the 2011 pont chart, after March 20 as before.

The value of any timeshare is in the use of the timeshare, just as the vlue in any vacation is in the trip itself. If you based any leisure travel solely on a cost value, we'd all stay home and never go anywhere for fun.

 

[crisi]

Construction really has been scaled back.

If you stop and think, everything they are selling now at Walt Disney World commenced as far back as 2006. That's when the CR garden wing closed and AKV was announced. Hundreds of rooms were months away from coming on line when the markets collapsed back in the fall of 2008. Four separate resorts (including the Treehouse Villas) opened in 2009 alone.

Certainly DVC found itself struggling to move that inventory over the last couple of years but I don't know that this policy change can really be traced back to the over-aggressive construction. If so, seems like they would have gone this route 2 years ago.

Aulani is under construction but it's fair to say that is driven by more than just DVC points demand. Given the hotel rooms, convention space, wedding pavilion, possible cruise tie-in and the $120 million they spend on land alone, clearly there are reasons beyond DVC which justified giving this project the green light.

As for WDW and DL, it's been about 18 months now since either one has had any new units under construction. I think that speaks to their awareness of the current marketplace.

I can relate to the theory that Disney should build less and concentrate on what they have now. But something also tells me that we as members would be no better off if DVC decides that it can no longer justify investments in the program.

Yeah, well, my disappointment in their growth rate starts with announcing SSR - that increased the supply beyond my own comfort level. Of course they've scaled back with the recession, but they built under the assumption that the economy would not do this - the same sort of assumption that some of us made with "resale values won't plummet." IMHO, they should have scaled back sooner.

They looked at the revenue immediately generated - timeshare sales has a fantastic ROI for them - and I don't think they bothered to look beyond the three year plan for "what happens 12 years out if gas is $10 a gallon?" What happens when the resale market with ordinary turnover gets X large? Stock options for executives are way to short term for my taste.