Timeshare Store and Annual fees

[Desire 2b a princess]

Has anyone purchased points from the Timeshare Store and paid the annual fees up front or have you only paid the closing costs?

 

[Plutofan]

We just bought a Vero Beach re-sale from them. Usually the buyer and seller pay the maintenance fees based upon who got the points. We paid our share in the final payment to the buyer. We were getting 52 2006 points we reimbursed the seller the maintenance fees for 52 points.

 

[DebbieB]

You really don't purchase points from The Timeshare Store. They are just a real estate agent, you are actually purchasing the points from a DVC member. Just like any real estate transaction, it's negotiable.

 

[Caskbill]

Maintenance fees are based on a calendar year, not on a use year. When buying resale, one way to determine whether buyer or seller should pay maintenance fees on specific points, is to prorate the fees (the same way Diseny does for the initial purchaser) based on how many months of a given use year are left in the calendar year.

Example: Suppose someone has an August Use Year and 200 points. Prorating on an annual basis, the maintenance fees paid in January 2006 would apply to 7-months of their 2005 Use Year points, and to 5-months of their 2006 Use Year points. In January 2007 the new owner would pay maintenance fees for calendar year 2007, which covers 7-months of their Use year 2006 points, and 5 months of their 2007 Use Year points.

Other Use Years can be pro-rated in a similar fashion, simply comparing the Use Year month to the calendar year.

If one wants to calculate who pays what maintenance fees based on points left in a specific use year, then assume the points are distributed equally in 12-monthly installments, and see how many months are covered by the points remaining.

In the above example, say all 2005 points were gone, and all 2006 points will be available beginning Aug 1, 2006. The seller has paid maintenance fees for calendar year 2006 on January 15th, 2006. When properly pro-rated, 7/12ths of that annual payment applied to 2005 use year points, and 5/12ths of that annual payment applied toward 2006 use year points.

In this case, the seller should reimburse the buyer for 7/12ths of the annual fees since on Jan 15th, 2007 the new owner will be paying the maintenance fees that can be associated with the 2006 Use Year points.

If on the other hand, the contract had all 2006 points remaining, then the buyer should reimburse the seller for 5/12ths of the annual fee since for an August 2006 Use Year, 5/12ths of the January 15, 2006 maintenance fee payment was actually applicable to the 2006 August Use Year points.

Just to make an easy calculation, suppose the contract was for 120 points. That's 10points/month. Say also the seller used 60 of those 2006 Use Year points, and the contract is selling with 60 points remaining.

At a rate of 10 points/month, 60 points represents 6-months worth of calendar dates. So in this case that would be Aug, Sep, Oct, Nov Dec, 2006, and Jan 2007. So in this case the seller has actually used 10 points that the buyer will have to pay maintenance fees on, come January 2007, so the seller whould not receive any money toward maintenance fees, and should actually be giving the buyer a credit toward maintenance fees on 10 points.

Many sellers conveniently forget that they paid pro-rated dues on their original purchase, the dues being prorated to the calendar year, not the Use Year.

Finally, in the above example, suppose the August Use Year had all 2006 points remaining, and had 60 2005 points banked. In this case the buyer should reimburse the seller on 110 points (at the rate of 10pts/month for a 120 point contract). That's based on it being 6-months worth of 2005 points (for the months Feb, Mar, Apr, May, Jun, Jul 2006), and 5 months worth of 2006 points (Aug, Sep, Oct, Nov, Dec 2006). On January 15 2007, the new owner will pay the maintenance fees for the remaining 2006 points (7-months worth), and the initial maintenance fees of their 2007 points (5-months worth)

Many mistakenly believe that in January they are paying maintenance fees for the points they will receive in that Use Year. That is not correct. If someone has a December use Year, then on January 15th 2006 they are not paying maintenance fees on points they won't receive until December, but are instead paying maintenance fees on points they received December 2005 that are valid during calendar year 2006 (11-months worth), and maintenance fees on only 1-months worth of their 2006 Use Year points. That is for points valid for the month of December 2006. January 15th 2007 they repeat the cycle, at that time paying the remaining fees on the 2006 points (11-months worth), and fees for one months worth of their 2007 use year points.

Hope this helps.

 

[JandD Mom]

When buying resale, it's all negotiable. However, remember, you still have to get through ROFR, and it you negotiate fees to be paid by the seller, you may end up with a package DVC will buy back.

 

[msdis]

We are in the process of selling part of our points and I called DVC the other day to check and see if by not paying the dues (buyer pays 2006 dues) if that would affect the other contracts we are keeping. She said no, that they each operate independent of one another. She said they would have to be paid before closing too. So I hope the buyers know they have to pay.

 

[Desire 2b a princess]

Hi All,

Thanks for all your responses, it looks like we are going ahead with our purchase and we have negotiated on the package. Thanks for all your input