Two contracts--which way to go?

[vbalacek]

I'm on the waitlist for additional points with Disney, but recently saw a resale contract that's pretty attractive (about 5$ a point cheaper after factoring in closing costs). Economically, the resale is a better deal. But I thought I read somewhere of other benefits associated with buying through Disney. Something to the effect that they treat the contracts together for purposes of banking and borrowing?

Other than ease of purchase, is there any other reason I should wait for Disney?

 

[magicaldisney]

subscribing....also interested in the answer to your question.

 

[Inkmahm]

I'm on the waitlist for additional points with Disney, but recently saw a resale contract that's pretty attractive (about 5$ a point cheaper after factoring in closing costs). Economically, the resale is a better deal. But I thought I read somewhere of other benefits associated with buying through Disney. Something to the effect that they treat the contracts together for purposes of banking and borrowing?

Other than ease of purchase, is there any other reason I should wait for Disney?

That's exactly why we recently bought add on points directly through Disney instead of a resale contract. We had our eye on a resale contract but that had a different UY than our current contract. For purposes of banking/borrowing, getting the add on points from Disney with the same UY makes our points treated as one big contract. I like that, especially for the banking timeframes/limits.

Also, I paid no closing costs to Disney AND I got the 2005 points, too. (the resale contract had only 2006 points coming 10/1)

I liked not having to wait for ROFR and getting the points immediately from Disney. With the resale, we had to wait to pass ROFR, to close, and for Disney to get around to recording our info.

I paid for the points from Disney with a credit card and got a 1% rebate, too.

 

[Caskbill]

There are two types of contracts: A Master Contract, and an Add-On Contract.

Your first contract is the Master. It determines your use year month, and you get a membership number associated with that contract.

If you purchase additional contracts, if they have the same use year month, they become add-on contracts. They remain under the same membership number and the same contract number as the original master contract, but with a different extension. Example, your master contract is 12345.000 and your add-on contract is 12345.001

If they have the same use year month, the 2nd contract becomes an add-on, whether purchased directly from Disney or via resale.

If it's a different use year month, it becomes a new master contract and a new membership number is associated with it.

Two master contracts are totally separate from each other. As different as your contract is from mine. Master contracts must be managed individually.

An Add-on contract effectively combines the points between the master and the add-on, whether they are the same resort or separate.

Banking percentages apply to the combined point total for a master contract and all it's add-on contracts. Suppose you have three 100 point contracts, each at a different resort. Effectively it is treated as a single 300 point contract for banking purposes. Suppose the contracts are at OKW, BWV, SSR respectively, and in a given year you've used all 100 OKW points and all 100 BWV points, but none of the 100 SSR points. You're in your 50% banking window. You may still bank all 100 SSR points since that's less than 50% of your total. (300 points times 50% = 150 points)

If instead all 3 were individual master contracts, then at the 50% window you could only bank 50 of your SSR points. (50% of 100 = 50)

The other difference is that at 7-months, all points from a master plus add-on contracts may be combined in any manner you want for making a reservation. Suppose in the above example you wanted to make a 75 point reservation at VWL. If you wanted you could use 25 of your OKW points, 25 of your BWV points, and 25 of your SSR points to make that reservation. You could use points in any combination you wanted.

With separate master contracts, points may not be combined in any way to make a reservation. All reservations must be made separately using points from the contracts separately. (Although one way around some of this is to transfer points from one contract to another, but again this requires a lot more point management.)

Hope this helps.

 

[MarkyMouse]

I am in the process of purchasing 150 pts. from HH that has the same use your as my existing 150 pts. from VB. Will Disney automatically link these contracts or will they link them after I notify them of the resale purchase or what? Thanks

 

[Dean]

I am in the process of purchasing 150 pts. from HH that has the same use your as my existing 150 pts. from VB. Will Disney automatically link these contracts or will they link them after I notify them of the resale purchase or what? Thanks

I'm sure they will link them if they know. But if they fail to do so, they will not go back and do it later. The registration must be identical also. I'd alert them that you want them linked prior to ROFR and again as a cover letter when your closing documents are sent for transfer of membership.

 

[vbalacek]

Wow thanks for the great answers! Now I know I want to keep the same use year, even if I buy resale-- (I'm definately an ease of adminstration type of girl).

One other question I had was that if I do an "add-on" to the master contract, can I still sell it (or the master) separately, or do they become lumped together?

 

[LisaS]

One other question I had was that if I do an "add-on" to the master contract, can I still sell it (or the master) separately, or do they become lumped together?

You can sell either the master or the add-on contract separately.

 

[quickennerd]

How does it work for willing the contracts to children at death? How do they split up?

Imagine I have 150 points @ SSR as my master, with another 150 as an addon at BCV. At my death, how could they be divided among my 3 kids?

(Of course, I'm hoping to be alive through 2054, but just in case.....)

 

[Dean]

How does it work for willing the contracts to children at death? How do they split up?

Imagine I have 150 points @ SSR as my master, with another 150 as an addon at BCV. At my death, how could they be divided among my 3 kids?

(Of course, I'm hoping to be alive through 2054, but just in case.....)

No way to split it up. They have to put all their names on it, put a part of the name or name and use the honor system for the rest or sell it and split the proceeds accordingly. DVC will not split a whole contract in this situation.

 

[rfj1020]

"No way to split it up. "

That is not what I was led to believe. I was told it could be split up. I specifically asked since my intent was to gift / leave a 50% interst to two different family members.

However, since DVC lied on at least two other points I can verify so far, it would not surprise me if they lied about htis too.

If it could not be split, I would not have brought the large number of points as a single contract.

Are you sure subsets of points cannot willed, gifted or transfered to different parties?

 

[Dean]

Are you sure subsets of points cannot willed, gifted or transfered to different parties?

100% NO chance if it's in one contract. Is there any chance they made it two contracts in one because of your questioning? As for lying, I'd say that was very unusual. I'm generally one of the more cynical of this group when it comes to timeshare sales people and even I have trouble envisioning a flat out lie by a DVC sales guide. More likely they didn't understand the question, didn't truly know the answer and gave an off the cuff response or you misunderstood what they were telling you. While I think DVC sales staff have misled people at times, rarely, I don't know of a single time I believe it to truly be intentional. In many ways, the guides are not THAT informed about the product, at least to the degree to which we dissect it.

Here's a common example. Say someone researches DVC through DIS and learns the ins and outs. Then they go to the sales presentation and ask about trading to other resorts at the 7 month window. Further assume they specifically specify getting a BW view or standard view at BWV during early to mid Dec. The guide answers no problem. It'd be a lie if the guide truly knew it was impossible. But even if possible part of the time IN THE PAST, an affirmative answer would not be a lie. And frankly, I doubt most of the guides have quite the working knowledge of high demand times and units that even the novice does on this site.

 

[RobDoc]

How does it work for willing the contracts to children at death? How do they split up?

Imagine I have 150 points @ SSR as my master, with another 150 as an addon at BCV. At my death, how could they be divided among my 3 kids?

(Of course, I'm hoping to be alive through 2054, but just in case.....)

Dean is correct about Disney not dividing the contract, but you can direct how you want the points divided (used) thru your estate documents.

There is no question that your ownership may be willed to your heirs - it may just depend on how you creatively provide the vehicle for them to use the points. Your ownership could be put into a trust and they would share equally in the trust, you could direct that each would have the use of 100 points per year or you could appoint a trustee to oversee the administration of your contracts. Think of it as dividing your home among the 3 kids - will you give one the kitchen, another the garage and the third gets the living room? Your DVC ownership is also property and the deed very specifically describes what you own- but you can still provide instruction how the DVC property will be used.

You could also purchase another 150 points and then could leave one contract to each child.

 

[quickennerd]

Sorry to dredge up this old thread, but I'm now at the point of possibly getting more points, and I'd like to be clear about the relative merits of add-on's vs. separate contracts. Here's my understanding of some of the ins & outs, please correct me:

One Master contract with an Add-on contract:
1. Can add on points at Resort 2, even though the master points are at Resort 1.
2. Can then book at the 11 month window at either Resort 1 or Resort 2, but only with the points for that Resort.
3. Can't split up the contract to sell it or to will the contract at death. It's one big enchilada. Or can the add-on be sold/willed separately??? I'm not sure!
4. For banking/borrowing purposes, all points are treated together.

Separate Master Contracts
1. May or may not have different use years.
2. Can transfer points between contracts (but only 1 transaction/UY).
3. Can obviously be sold or willed separately.
4. Each contract stands on it's own for banking/borrowing.
5. If buying the 2nd Master from Disney, 160 point minimum applies.

Thanks for trying to help me sort through this barrel of fish hooks! I'd love to see the experts thoughts on this topic (relative merits of add-ons vs. multiple masters).

 

[LisaS]

One Master contract with an Add-on contract:
1. Can add on points at Resort 2, even though the master points are at Resort 1.
2. Can then book at the 11 month window at either Resort 1 or Resort 2, but only with the points for that Resort.

You can also book a resort you do not own at 7 months using any number of points from each contract.

3. Can't split up the contract to sell it or to will the contract at death. It's one big enchilada. Or can the add-on be sold/willed separately??? I'm not sure!

They are two separate contracts so you can sell either one (either the master or the add-on) or you can will the master to one person and the add-on to another. You cannot split one contract into multiple pieces but with a master and an add-on, you actually have two contracts.

4. For banking/borrowing purposes, all points are treated together.

For banking purposes, the percentages are calculated based on the total points owned across both contracts. When borrowing points, you can borrow from one or both contracts to make a reservation.

For example, say you owned a 150-point master contract at SSR and a 50-point add-on at BCV, and you are in your 25% banking window (the 10th month of your Use Year). If you have not banked any points so far this UY, you could bank all 50 of your BCV points even though that would be 100% of your BCV contract. The reason is because the 50 BCV points comprise 25% of the total points you own for this set of contracts (master + add-on).

 

[kdzgon]

"No way to split it up. "

That is not what I was led to believe. I was told it could be split up. I specifically asked since my intent was to gift / leave a 50% interst to two different family members...

Are you sure subsets of points cannot willed, gifted or transfered to different parties?.

Your statements are a little confusing to me. There is a HUGE difference between leaving a "50% interest" and leaving one half the points. Two people could jointly own a contract (as is often the case with married couples that own DVC), so I believe you could indeed leave 50% interest in your ONE contract to each of two children. Splitting the contract is a different issue, and would be a different way to divide your points between two heirs than gifting/leaving a 50% interest (in your contract). It sounds like your intent was the latter, but that was not clear (to me) in your post above.