Transferring Ownership

[RLevy29]

Can someone transfer ownership to their children? My brother-in-law own points but is not interested in using them. My 2 nieces are interested in taking over the contract. Would he have to sell it to them or can he just transfer ownership?

 

[CarolMN]

If there will be $$ involved, it will have to be a sell & buy transaction. Disney may allow a gift to a family member. (Not sure if a niece would qualify). Either way, your brother will need a ROFR waiver from Disney to transfer the ownership. He can call Member Administration for info on getting the ROFR waiver.

 

[Cyberc1978]

I have no first hand knowledge about this, but I have been informed that at least with HGVC (they also have ROFR) that you are allowed to gift the ownership to someone else and it does not need to be family. You do need to fill out a affidavit form.

I now it bypasses the rofr process but if it works for HGVC why shouldn’t it work for DVC?. I guess that DVC would have to approve the gifting just like HGVC but why shouldn’t they.

 

[bumbershoot]

Gratuitous family transfer. I’m going through LTTransfers. It’s just over $200. You can do it yourself for even cheaper; find Dean’s posts about it.

When you talk to Disney they’ll tell you to go their recommended service and they’ll tell you it costs $500. You don’t have to do it through them.

 

[Cyberc1978]

Gratuitous family transfer. I’m going through LTTransfers. It’s just over $200. You can do it yourself for even cheaper; find Dean’s posts about it.

When you talk to Disney they’ll tell you to go their recommended service and they’ll tell you it costs $500. You don’t have to do it through them.

Glad to hear that it’s possible.

 

[drusba]

The transfer you want to make is a real estate transfer requiring typical real estate transfer steps and, as mentioned above, there can thus be some costs involved.

As long as there is not still some outstanding mortgage that would have to first be paid off, you can transfer your DVC to anyone as a gift, including a complete stranger, as long as they are an adult, and Disney will not (and legally cannot) exercise a right of first refusal. Legally, that right applies only to sales not gifts, with a gift you still need Disney's waiver of ROFR (it is needed simply for recording purposes to avoid later problems with future transfers), and Disney will give it automatically if it is a gift.

 

[Cyberc1978]

The transfer you want to make is a real estate transfer requiring typical real estate transfer steps and, as mentioned above, there can thus be some costs involved.

As long as there is not still some outstanding mortgage that would have to first be paid off, you can transfer your DVC to anyone as a gift, including a complete stranger, as long as they are an adult, and Disney will not (and legally cannot) exercise a right of first refusal. Legally, that right applies only to sales not gifts, with a gift you still need Disney's waiver of ROFR (it is needed simply for recording purposes to avoid later problems with future transfers), and Disney will give it automatically if it is a gift.

What I don’t understand is that there is a risk (imho a high one) that people will use this to circumvent the ROfr.

I know that the only one benefiting from this is the buyer. If the law says you can so be it but I still don’t understand why it’s an option.

 

[drusba]

^The risk you speak of has existed for rights of first refusal in relation to real estate (and many types of personal property) since the first such contract was invented and the first applicable tricky person was born. The law favors real estate transfers over things that may limit transfers like rights of first refusal. I can still remember ancient cases from law school struggling with what happens when a party has a right of first refusal to pay the same price as offerred by a buyer and then the seller and buyer try to avoid the right by entering into a like kind transaction, i.e., they exchange properties they own rather than do a sale for money. There were courts that simply said the one with the ROFR was out of luck unless he could actually transfer the same property. In the world of contracts, the fact that there may be nefarious individuals who will do tricky things to avoid their contractual obligations is just one of the normal risks that exist, and the courts are forever full of breach of contract claims arising from actions taken by those trying to avoid their contractual obligations.

 

[intertile]

If transferring points as a gift, say to your child. Are these points considered resale or direct?(if they were direct points previously of course)

 

[bumbershoot]

If transferring points as a gift, say to your child. Are these points considered resale or direct?(if they were direct points previously of course)

Direct.

I checked the comptrollers site today and it’s in my name now. I will be getting a proper card once Disney has it all finalized, they’ll be considered direct points with no restrictions.

 

[bumbershoot]

What I don’t understand is that there is a risk (imho a high one) that people will use this to circumvent the ROfr.

I know that the only one benefiting from this is the buyer. If the law says you can so be it but I still don’t understand why it’s an option.

We’re not allowed to charge for transfers, but people do...


For the gratuitous Dvc transfer my soon to be ex signed a legal notarized form that (I believe) covered the fact that it was a gift.

If someone is comfy lying on a legal form, then I suppose they get to accept the consequences should they be found out.

 

[drusba]

If transferring points as a gift, say to your child. Are these points considered resale or direct?(if they were direct points previously of course)

I have specifically asked that question of DVC management and the response I received was that any gift recipient would have the same benefits that the owner who made the transfer had and the transfer would not be considered subject to the restrictions on benefits created for resale purchasers.

 

[Cyberc1978]

We’re not allowed to barge for transfers, but people do...

Just to clarify. The point transfer mentioned here is actually an ownership transfer and not a point transfer from one member to another.

 

[Dean]

If it's a gratuitous transfer it would be simple & fairly easy. IF not gratuitous it is subject to formal ROFR. Historically they've used the same ROFR process but someone recently was told this has changed. IF they keep their name on it, it's even easier.

 

[RLevy29]

Thanks so much for the feedback!

 

[bumbershoot]

Just to clarify. The point transfer mentioned here is actually an ownership transfer and not a point transfer from one member to another.

Fully aware of that. Was relating it to other things people might lie about.

 

[Cmbar]

Great question OP. I was just going to hop on and ask my fellow DVC owners how to possibly facilitate a transfer of ownership between me and my sister.

She has a small OKW contract she bought on Resale years ago (I believe it has been grandfathered in to having all the benefits and no restrictions such as can't use on cruise, Disney collection, etc.). Anywhoo, She doesn't really want those points anymore so I am happy to pick up the cost of the maintenance and use these points and possibly pay her some value for them though not like a full resale. She basically just wants to give it to us and let us pay the maintenance. The main reason I want to take ownership is so I can use them in combination with our BLT contract in my DVC account. Does this make sense? If we have different use years with the two contracts (hers is June, mine April) won't it be like having two separate contracts that can't be used on the same accommodations unless they both are being done within their respective 7 month window? Luckily we do love OKW and would use the small contract (40 points) often for just a short trip. But was wondering if its even possible to just switch ownership or just should we just be added on to her OKW contract as an associate member?

If its a simple transaction to "transfer" ownership I would like to do that but if we have to go through ROFR or pay a lot in transfer fees maybe just stick with being added as an associate? any advice or opinion on that?

 

[drusba]

Great question OP. I was just going to hop on and ask my fellow DVC owners how to possibly facilitate a transfer of ownership between me and my sister.

She has a small OKW contract she bought on Resale years ago (I believe it has been grandfathered in to having all the benefits and no restrictions such as can't use on cruise, Disney collection, etc.). Anywhoo, She doesn't really want those points anymore so I am happy to pick up the cost of the maintenance and use these points and possibly pay her some value for them though not like a full resale. She basically just wants to give it to us and let us pay the maintenance. The main reason I want to take ownership is so I can use them in combination with our BLT contract in my DVC account. Does this make sense? If we have different use years with the two contracts (hers is June, mine April) won't it be like having two separate contracts that can't be used on the same accommodations unless they both are being done within their respective 7 month window? Luckily we do love OKW and would use the small contract (40 points) often for just a short trip. But was wondering if its even possible to just switch ownership or just should we just be added on to her OKW contract as an associate member?

If its a simple transaction to "transfer" ownership I would like to do that but if we have to go through ROFR or pay a lot in transfer fees maybe just stick with being added as an associate? any advice or opinion on that?

It is this statement that can kill your "gift": "possibly pay her some value for them though not like a full resale." As soon as you add any value to the supposed "gift" it becomes a transfer for which DVD would have the right of first refusal. Also you speak of paying maintenance fees. You can pay maintenance fees after the transfer but if your "gift' has as one of its conditions that you pay any past maintenance fees, it becomes a transfer that is not a pure gift but one for which value is being given and subject to the right of first refusal. Disney could waive its right in either case, but if you want to do a clean transfer that escapes ROFR, it has to be gift with nothing added on.

Also, even if it is a gift, you still have to go through ROFR process by notifying DVD of the transfer. That is to give DVD the opportunity to investigate and assure it is a gift, and you also need the waiver of ROFR filed with the local recorder so that there is not a later issue affecting a future sale of the property, i.e., if you sell it some years later, the title insurance company involved in the sale is going to show a barrier to the sale if there is no ROFR waiver on file relating to the transfer made to you.

As to the actual transfer and use year, even if a gift, you still have to do a real estate transfer, which requires a deed and filings with the local recorder (the county assessor in Orlando) and there are costs involved in doing that. Once done you will get a new membership number for the transfer because it is not in the same use year as your current ownership. As long as the deed shows the transfer is made to the same person or persons that appear as owners on your current membership, the new ownership will be shown in the same online account as your current ownership, although to assure that you need to make sure DVC is informed by the time of the closing that the transfer is to someone who already has an account. As two separate memberships, you will not be able to mix the points from one use year with the other to make any reservation even at 7 months out. Your options will be instead to either first transfer points from one use year to the other or make two reservations by using one of your use year's points for some of the days of the vacation and the other use year's points for the other days, and then have MS link the two reservations.

As to just becoming associate members on your sister's account, that is a possbility but has its own risks. As associate members, you would not be entitled to any DVC benefits but that should not be an issue because you have another membership which provides for those. Your sister would have to put you on as associate members. She would still be the one getting the annual dues statement, and she would have the right at anytime to cancel any of your reservations or remove you as an associate member. Moreover, as being the one shown in the real estate records as the owner of the property, it would be presumed that any deduction for property taxes on an annual tax return could be made by her and not you even if you pay those dues (you will need an accountant to make sure proper steps are taken to assure you can take the deduction if you can). If she dies, your associate membership would automatically end and ownership would be subject to whatever will or intestate laws that are applicable.

 

[Jason@dvcstore]

I can still remember ancient cases from law school struggling with what happens when a party has a right of first refusal to pay the same price as offerred by a buyer and then the seller and buyer try to avoid the right by entering into a like kind transaction, i.e., they exchange properties they own rather than do a sale for money. There were courts that simply said the one with the ROFR was out of luck unless he could actually transfer the same property. In the world of contracts, the fact that there may be nefarious individuals who will do tricky things to avoid their contractual obligations is just one of the normal risks that exist, and the courts are forever full of breach of contract claims arising from actions taken by those trying to avoid their contractual obligations.

I imagine will we will now get buyers offering on properties with the stipulation they "will wash the sellers car 18 times in a year."

 

[Cmbar]

It is this statement that can kill your "gift": "possibly pay her some value for them though not like a full resale." As soon as you add any value to the supposed "gift" it becomes a transfer for which DVD would have the right of first refusal. Also you speak of paying maintenance fees. You can pay maintenance fees after the transfer but if your "gift' has as one of its conditions that you pay any past maintenance fees, it becomes a transfer that is not a pure gift but one for which value is being given and subject to the right of first refusal. Disney could waive its right in either case, but if you want to do a clean transfer that escapes ROFR, it has to be gift with nothing added on.

Also, even if it is a gift, you still have to go through ROFR process by notifying DVD of the transfer. That is to give DVD the opportunity to investigate and assure it is a gift, and you also need the waiver of ROFR filed with the local recorder so that there is not a later issue affecting a future sale of the property, i.e., if you sell it some years later, the title insurance company involved in the sale is going to show a barrier to the sale if there is no ROFR waiver on file relating to the transfer made to you.

As to the actual transfer and use year, even if a gift, you still have to do a real estate transfer, which requires a deed and filings with the local recorder (the county assessor in Orlando) and there are costs involved in doing that. Once done you will get a new membership number for the transfer because it is not in the same use year as your current ownership. As long as the deed shows the transfer is made to the same person or persons that appear as owners on your current membership, the new ownership will be shown in the same online account as your current ownership, although to assure that you need to make sure DVC is informed by the time of the closing that the transfer is to someone who already has an account. As two separate memberships, you will not be able to mix the points from one use year with the other to make any reservation even at 7 months out. Your options will be instead to either first transfer points from one use year to the other or make two reservations by using one of your use year's points for some of the days of the vacation and the other use year's points for the other days, and then have MS link the two reservations.

As to just becoming associate members on your sister's account, that is a possbility but has its own risks. As associate members, you would not be entitled to any DVC benefits but that should not be an issue because you have another membership which provides for those. Your sister would have to put you on as associate members. She would still be the one getting the annual dues statement, and she would have the right at anytime to cancel any of your reservations or remove you as an associate member. Moreover, as being the one shown in the real estate records as the owner of the property, it would be presumed that any deduction for property taxes on an annual tax return could be made by her and not you even if you pay those dues (you will need an accountant to make sure proper steps are taken to assure you can take the deduction if you can). If she dies, your associate membership would automatically end and ownership would be subject to whatever will or intestate laws that are applicable.

Wow Drusba! Thank you so much for the detailed response!! We could definitely do this as a gift because she really just doesn’t want the contract any more and crazy crazy doesn’t use the points for any trips to Disney. I’d just feel bad taking it from her without anything but clearly it would be easier to do that and get the title in my name. Thanks for the clarification on differences between associate and transferring membership!!

One last question, do we call DVC to do this or are there title brokers we should use? I certainly don’t mind paying title transfer fees and such just want to do it the cleanest way possible with DVC unless they are going to bilk me with fees that I don’t really need to pay . Thank you!!