What Are Breakage Fees?

[lugnut33]

I see them listed on the annual report for SSR and they are quite large, but I don't know what they are?

 

[erionm]

Breakage is not a fee but income. Description from dvcnews.com:

Breakage Income - As stated in the Condominium Documents, Disney Vacation Club Management Corp. ("DVCMC) rents, during the Breakage Period, certain accommodations that have not been reserved by Members. The Association is entitled to receive, as breakage income, the proceeds of such rentals not to exceed 2.5 percent of the aggregate of the Condominium Operating Budget (total operating expenses less the sum of interest income and Member late fees and interest) and Capital Reserve Budget in each calendar year.

 

[drusba]

Breakage period is last 60 days before a date. If there are still unreserved DVC rooms come that 60 days before an arrival date, DVD can put them into the general rental system. A portion of that breakage income received, up to 2.5% of the resort's operating budget, is then returned to offset dues of DVC members (that income is what you see in the annual budget). The rest then first goes toward the MS budget and then anything beyond what is needed for that goes to DVD.