UY Question - in Final Year

[disneylandtour]

I'm sure this has been discussed before, but I can't find the answer. What happens in the final year of ownership if you have a late UY? Let say for example, the contract is for a 2042 property. On Jan 2041, you are charged your membership dues--or start paying them monthly--but if you have a UY of December, you only have a short time to use your points before your entire contract expires on Jan 31, 2042. Either something is going to be worked out about this situation or there's going to be a mad, mad rush to use points in that two month window before they expire at the end of Jan--especially for those with large contracts? I'm sure that I'm missing something obvious. Just point me in the right direction. This question is one more of curiosity than anything else. My current contracts are Feb and Sept, but I was eying some other contracts and wondering, How would that work?

 

[Robbie Cottam]

I'm sure this has been discussed before, but I can't find the answer. What happens in the final year of ownership if you have a late UY? Let say for example, the contract is for a 2042 property. On Jan 2041, you are charged your membership dues--or start paying them monthly--but if you have a UY of December, you only have a short time to use your points before your entire contract expires on Jan 31, 2042. Either something is going to be worked out about this situation or there's going to be a mad, mad rush to use points in that two month window before they expire at the end of Jan--especially for those with large contracts? I'm sure that I'm missing something obvious. Just point me in the right direction. This question is one more of curiosity than anything else. My current contracts are Feb and Sept, but I was eying some other contracts and wondering, How would that work?

Somewhere in 2038, Disney will have an option for all blue card members and extend for another 15 years.... and will resell all the sale points for the same amount of time......

Totally joking, actually a pretty good question but I couldn’t help myself

 

[CarolynFH]

I'm sure this has been discussed before, but I can't find the answer.

Unfortunately, there is no answer, just speculation. There are multiple threads on this and multiple ideas.

I agree with many who think DVC will change banking and borrowing rules during the last few years for the resorts that are expiring on 1/31/2042 and also might extend the owner priority booking window for those resorts so that owners can use their points.

I also think that, since dues are for operations and maintenance of the resort during the calendar year, on January 1, 2042 owners of the expiring resorts will pay only to operate their home resort for that one month. We should see the amount that we pay for Capital Reserves decrease over the last few years, too, because DVC can’t make us put money aside for a new roof, for example, that won’t be needed for ten years after the condo association ends.

I won’t get into what a disaster the OKW extension was, is and will be, but it’s highly doubtful that any of the 2042 resorts will be extended. More likely that DVC will operate some for cash while they refurbish or even demolish and rebuild and sell as new. I also believe they’ll sell VB and HHI.

 

[Sandisw]

I think they will make a lot of adjustments those last few years to make sure that owners have a chance to use up their points.

In addition to limits on banking and borrowing, I would not be surprised to see the home resort booking period increased so that 2042 owners have more time to use at their own resort before others can book.

It will be interesting what they decide to do. My guess is we will get some info about 5 years before expiration.

 

[Robbie Cottam]

Unfortunately, there is no answer, just speculation. There are multiple threads on this and multiple ideas.

I agree with many who think DVC will change banking and borrowing rules during the last few years for the resorts that are expiring on 1/31/2042 and also might extend the owner priority booking window for those resorts so that owners can use their points.

I also think that, since dues are for operations and maintenance of the resort during the calendar year, on January 1, 2042 owners of the expiring resorts will pay only to operate their home resort for that one month. We should see the amount that we pay for Capital Reserves decrease over the last few years, too, because DVC can’t make us put money aside for a new roof, for example, that won’t be needed for ten years after the condo association ends.

I won’t get into what a disaster the OKW extension was, is and will be, but it’s highly doubtful that any of the 2042 resorts will be extended. More likely that DVC will operate some for cash while they refurbish or even demolish and rebuild and sell as new. I also believe they’ll sell VB and HHI.

What happened to OKW extension that made it a disaster?

 

[CarolynFH]

What happened to OKW extension that made it a disaster?

Very few owners paid the money, so DVC started suspending owners’ accounts and canceling reservations. So then DVC received letters from attorneys pointing out that when Disney extended the ground lease, it automatically extended every ownership, and DVC couldn’t force anyone to pay for the extra years. Now when owners sell an unextended contract, they are required to sign a quit-claim for the extension, and the new owners’ rights end in 2042. But when DVC takes a contract via ROFR, they sell those points as extended. The result is that in any given building, some percentage of it is owned only through 1/31/2042 while the remaining percentage is owned through 1/31/2057, and that complicates DVC’s options for what they can do with the buildings between the two expiration dates.

 

[Robbie Cottam]

Very few owners paid the money, so DVC started suspending owners’ accounts and canceling reservations. So then DVC received letters from attorneys pointing out that when Disney extended the ground lease, it automatically extended every ownership, and DVC couldn’t force anyone to pay for the extra years. Now when owners sell an unextended contract, they are required to sign a quit-claim for the extension, and the new owners’ rights end in 2042. But when DVC takes a contract via ROFR, they sell those points as extended. The result is that in any given building, some percentage of it is owned only through 1/31/2042 while the remaining percentage is owned through 1/31/2057, and that complicates DVC’s options for what they can do with the buildings between the two expiration dates.

Whoops,
someone didn’t do their homework?
how did Disney not know the extending the ground lease Would have that fall out?

btw, if and owner never sold, and never paid the extension, can they use their points until 57

 

[CarolynFH]

Whoops,
someone didn’t do their homework?
how did Disney not know the extending the ground lease Would have that fall out?

Yeah, you have to wonder! It may be that they just decided to back down rather than test it in court, after they received letters from owners’ attorneys.

btw, if and owner never sold, and never paid the extension, can they use their points until 57

In 2057 there will probably be owners who will test that idea. The original buyers may or may not be around, but their heirs will be. Could be interesting!

 

[AdamsMum]

If they had made 50 year contracts for all of the resorts the way they do now, they wouldn't be in the position of having 5 resorts memberships end on the same date. I never understood that. So how about they extend the other 4 resorts' (of which I own 2) contracts to make them 50 years? Complimentary of course! Just throwing it out there!

 

[Sandisw]

If they had made 50 year contracts for all of the resorts the way they do now, they wouldn't be in the position of having 5 resorts memberships end on the same date. I never understood that. So how about they extend the other 4 resorts' (of which I own 2) contracts to make them 50 years? Complimentary of course! Just throwing it out there!

I am sure plenty of owners at the 2042 resorts feel like you do! Lol

 

[aceshigh73]

Very few owners paid the money, so DVC started suspending owners’ accounts and canceling reservations. So then DVC received letters from attorneys pointing out that when Disney extended the ground lease, it automatically extended every ownership, and DVC couldn’t force anyone to pay for the extra years. Now when owners sell an unextended contract, they are required to sign a quit-claim for the extension, and the new owners’ rights end in 2042. But when DVC takes a contract via ROFR, they sell those points as extended. The result is that in any given building, some percentage of it is owned only through 1/31/2042 while the remaining percentage is owned through 1/31/2057, and that complicates DVC’s options for what they can do with the buildings between the two expiration dates.

What happens with a gratuitous transfer to a family member ? Are they requiring them to sign a quit claim deed as well ?

 

[CarolynFH]

What happens with a gratuitous transfer to a family member ? Are they requiring them to sign a quit claim deed as well ?

As far as I know, no, they’re not, it’s only when a contract is being sold and goes through ROFR. At this time, there’s no ROFR on gratuitous transfers. So DVC doesn’t know a gratuitous transfer has taken place until they receive a copy of the new deed that’s already been filed with Orange County FL.

If they had made 50 year contracts for all of the resorts the way they do now, they wouldn't be in the position of having 5 resorts memberships end on the same date. I never understood that. So how about they extend the other 4 resorts' (of which I own 2) contracts to make them 50 years? Complimentary of course! Just throwing it out there!

Yes, sometimes I wonder whether BCV had already been completed or that it wasn’t until SSR was in planning or construction when someone said, “Whoa, let’s think about this!” Or did it have to do with the required 40-year minimum lifespan of a condominium association, under Florida law? I don’t know when that law was put in place, but BCV barely fits (opened July 2002, so condo association would have been created prior, expires January 2042)!

In any case, if BWV is extended to a 50-year lifespan, it’s even less likely that I’ll see it end, but OTOH our kids might be more likely to want it.

 

[CraigInPA]

It's all a wild guess what DVC will choose to do in 2042 for existing members. I'd hope that they would find a way to prevent everyone scrambling to use points in that final year. I think suspending non-home point bookings at the expiring resorts in the last year might do that.

 

[disneylandtour]

Thanks, all, this has been interesting and helpful.

If resale contracts are any indication, presently 9% of resale contracts for OWK are extended. I think the percentage of extended is actually higher--as those who placed more value on their DVC contracts were likely to extend while those with waning interest did not. Also recent direct sales (however small) have been extended. But even with this, I doubt extended is larger than 15% of overall OWK contracts. And even if that number increases, due to direct sales, between now and 2042, that's still a small percentage, maybe rising eventually to 25%. This will be a mess for DVC. I doubt Disney can sell 75% cash rooms over there, without a lot of rebranding, and if they want to rebuild, they will still have 25%-ish of existing contracts to accommodate. I wonder if there's a way for Disney to pitch special "lower priced) 15-year contracts to those at the rest of the 2042 resorts, with the "new" home resort being OWK (through 2057), while sunsetting the rest of the 2042 resorts for possible sale (HHI, VB) or redesign/retheme (Boardwalk, Beach Club, Boardwalk)? I think this would largely solve the 2042/2057 OWK problem in terms of occupancy.

 

[CarolynFH]

those who placed more value on their DVC contracts were likely to extend while those with waning interest did not.

I think it was more that many owners saw no reason to pay $15 per point, later raised to $25, for something they couldn’t use or get any benefit from for 30+ years (it was first offered in 2007, 35 years from the 2042 expiration). There were enough owners who not only resisted paying (the extension was mandatory, not voluntary) but sought legal advice and assistance that DVC backed down and eventually stopped offering it. And DVC didn’t bother filing the extended deeds until 2019 - https://dvcnews.com/dvc-program-men...option-rate-of-okw-15-year-contract-extension. I sincerely doubt that they’re going to try any sort of extension again.

 

[disneylandtour]

I sincerely doubt that they’re going to try any sort of extension again.

I hear the point you're making. I think it's valid. But here's the flip side. There's a bunch of people who bough the 2042 deeds back in the late 1990s or early 2000s. A lot of these people will be--let's say--around 70 or 75 in 2042. Are these people buying a new 50-year contract? Probably not. Will this group want to spend $500 a night to be in a deluxe after spending "points" for decades? Again probably not. But will these people buy a 15-year extension--which would see them until their mid-80s or so? I think that's far more likely. Also, many in this group hit Disney's sweet spot? Retirees with a lot of leisure time and some disposable income, looking to spend it. So I do think that this Disney will want to capture this audience? But again, I see your point. I just think that Disney will work to keep some of this group as regulars, as this is also the group that is going out to signature dinners and buying annual passes, but not going on any high demand thrill rides (i.e. whatever the 2042 equivalent of Cosmic Rewind is), but rather happy visiting Spaceship Earth, seeing the concerts, and simply enjoying the atmosphere of the parks.

 

[Sandisw]

I hear the point you're making. I think it's valid. But here's the flip side. There's a bunch of people who bough the 2042 deeds back in the late 1990s or early 2000s. A lot of these people will be--let's say--around 70 or 75 in 2042. Are these people buying a new 50-year contract? Probably not. Will this group want to spend $500 a night to be in a deluxe after spending "points" for decades? Again probably not. But will these people buy a 15-year extension--which would see them until their mid-80s or so? I think that's far more likely. Also, many in this group hit Disney's sweet spot? Retirees with a lot of leisure time and some disposable income, looking to spend it. So I do think that this Disney will want to capture this audience? But again, I see your point. I just think that Disney will work to keep some of this group as regulars, as this is also the group that is going out to signature dinners and buying annual passes, but not going on any high demand thrill rides (i.e. whatever the 2042 equivalent of Cosmic Rewind is), but rather happy visiting Spaceship Earth, seeing the concerts, and simply enjoying the atmosphere of the parks.

I think what you might be missing is that the extension of OKW to 2057 extended all deeds for OKW. There are people who did not pay for the extension and who still own an original deed.

There is a good chance that these owners will legally be able to keep using their ownership for free. No one knows how it will play out.

That is why a future extension won’t happen….they can’t extend the contract on their own and then force people to pay….it requires a vote of a majority of owners to do thst.

And, if they extend the 2042 resorts, they can’t adjust the charts, or add resale restections, or whatever other changes they might want to add for the product.

They will make a lot more by making these new resorts, with 50 year contracts, and selling new to younger buyers.

 

[CarolynFH]

I just think that Disney will work to keep some of this group as regulars, as this is also the group that is going out to signature dinners and buying annual passes, but not going on any high demand thrill rides (i.e. whatever the 2042 equivalent of Cosmic Rewind is), but rather happy visiting Spaceship Earth, seeing the concerts, and simply enjoying the atmosphere of the parks.

LOL, that’s us now! Although we do love Cosmic Rewind and are looking forward to riding Tron on our next visit. And we have no interest in an extension of our DVC ownership.

 

[zavandor]

One problem are dues. They cannot let owners use their points before paying the dues for the final year or they might just stop paying.
So, if they don't suspend borrowing, they'll require to pay the 2041 dues in advance to use points in 2040.
And they might stop allowing paying MF monthly, or at least require to pay them in full at the moment one use the points during the final year.
And possibly, they may give out all points in February regardless of UY, to give all members equal chances to use them.

All speculations, nothing confirmed.

 

[chalee94]

Thanks, all, this has been interesting and helpful.

If resale contracts are any indication, presently 9% of resale contracts for OWK are extended. I think the percentage of extended is actually higher--as those who placed more value on their DVC contracts were likely to extend while those with waning interest did not. Also recent direct sales (however small) have been extended. But even with this, I doubt extended is larger than 15%...

As of 2021, Disney had extended about 2 million points of a possible total of 7.7 million OKW points to a 2057 end date. It took 10 years to sell around 550,000 pts.

Based on dvcnews' analysis, they could sell twice as many direct OKW points per year until 2042 as they have averaged in the past and still barely get half of OKW extended...

https://dvcnews.com/dvc-program/fin...option-rate-of-okw-15-year-contract-extension

From August 30, to November 1, 2019, Disney filed 8,517 Old Key West “extension” deeds with the Orange County Comptroller for those owners who chose to extend. These extension deeds contained 1,468,764 points, or about 19.1% of Old Key West’s total points.

...Although only 19.1% of Old Key West’s points were extended by the public since the initial offering in 2007, the percentage of points owned by the general public with the extended 2057 expiration date has continued to increase every year since then. All Old Key West deeds sold by Disney since September 2007 have the later expiration date. In addition, whenever Disney reacquires an Old Key West deed with the original 2042 expiration date via foreclosure proceedings or by exercising its right of first refusal on resale transactions, it resells the points with the later 2057 expiration date.

Dating back to March 2010, Disney has sold more than 550,000 Old Key West points with the 2057 ending date. Combined with the 1.48 million points voluntarily extended, more than 2 million points owned by the public now have the January 2057 contract end date. This total represents more than 1/4 of the 7.7 million points which make up Disney's Old Key West Resort.