What can Disney do with contracts they take?

[achinforsomebacon]

Given the amount of contracts getting taken by the ROFR monkey these days, I'm wondering what can be done with the contracts bought back (both the points and the UY).

Assume the following contract: June UY 100/2020, 200/2021, 100/2022.

1. What can be done with points? 2020 points should expire 6/1/2021. Can Disney work magic to do something with these? I wouldn't think so since they are banked points. What would happen with the points banked into 2021? I guess if it was sold as a June UY, they would stay 2020 banked points? And can they just split the contract into whatever size they want?

2. What can they do with the UY? I know they have the ability to change it. Are there limitations to what they can do or can they just make it whatever they want?

I'm just trying to understand how much flexibility they have with the contracts they buy back and if they have reason to take a specific type (UY, number of points, stripped/loaded).

 

[eMoneyBug]

Mickey is merely scooping up contracts and selling direct to all those that are buying direct, like Fantasmic they can imagine it and make things fit their needs.

 

[crvetter]

To answer;

What can be done with points? 2020 points should expire 6/1/2021. Can Disney work magic to do something with these? I wouldn't think so since they are banked points. What would happen with the points banked into 2021? I guess if it was sold as a June UY, they would stay 2020 banked points? And can they just split the contract into whatever size they want?

Points will expire the same time on a contract whether Disney owns the contract or not. Thiugh once Disney buys back the contact that fractional share ceases to exist and goes into the larger contract pool Disney owns from for a given Unit in the association.

They can split the contract however they want because that fractional entity ceases to exist. So they also can combine but it has to be from the same ownership “Unit”

What can they do with the UY? I know they have the ability to change it. Are there limitations to what they can do or can they just make it whatever they want?

So any resort prior to Riviera when they sold points as a June use year whenever they bought back it stayed as a June use year. Because the use year was declared against a unit. Starting with Riviera the use year is merely a “bookkeeping” item on your contract when you buy and Disney now has the power to assign that at will. UY doesn’t matter much as it all balances out in the same points in the system.

 

[crisi]

They may also start to buy up contracts - probably not yet - but in a few years, to recreate and resell OKW/BWV/BCV and VWL as new properties while existing members use the old properties. They'll make money hand over fist with BCV 2.0 and minimal remodeling costs.

 

[The Jackal]

To answer;


Points will expire the same time on a contract whether Disney owns the contract or not. Thiugh once Disney buys back the contact that fractional share ceases to exist and goes into the larger contract pool Disney owns from for a given Unit in the association.

They can split the contract however they want because that fractional entity ceases to exist. So they also can combine but it has to be from the same ownership “Unit”


So any resort prior to Riviera when they sold points as a June use year whenever they bought back it stayed as a June use year. Because the use year was declared against a unit. Starting with Riviera the use year is merely a “bookkeeping” item on your contract when you buy and Disney now has the power to assign that at will. UY doesn’t matter much as it all balances out in the same points in the system.

Are you sure. DVC can change use years on any contract they buy back, not just RIV. The contracts are assigned to specific units. DVC cannot miss match units and sell as one. Example. They buy back 50 point contracts from unit 7B June use year and 8B December use year. They cannot combine them and sell me a 100 point contract. They could sell me the 2 50 point contracts with whichever use year ( let’s say March) I want if they have current points and I would pay 2 closing costs. I wouldn’t be surprised if DVC has a buyer for those points lined up. If someone buys a direct contract less than 4 months out from the banking deadline DVC has traditionally banked those points if requested. They have even done this for resale buyers sometimes.

 

[The Jackal]

I

They may also start to buy up contracts - probably not yet - but in a few years, to recreate and resell OKW/BWV/BCV and VWL as new properties while existing members use the old properties. They'll make money hand over fist with BCV 2.0 and minimal remodeling costs.

OKW they might start to buy back more aggressively and resell with the 2057 extension to get more of the resort extended. But they will not buy back contracts to hold on to. There is no way for DVC to buy back a entire unit. Some members will never sell and. DVC will never be able to get all points for a unit. Those resorts will expire on Jan 31 2042, DVC will then do a complete full refurbishment and resell them. All except OKW due to the extension already in place.

 

[crvetter]

Are you sure. DVC can change use years on any contract they buy back, not just RIV. The contracts are assigned to specific units. DVC cannot miss match units and sell as one. Example. They buy back 50 point contracts from unit 7B June use year and 8B December use year. They cannot combine them and sell me a 100 point contract. They could sell me the 2 50 point contracts with whichever use year ( let’s say March) I want if they have current points and I would pay 2 closing costs. I wouldn’t be surprised if DVC has a buyer for those points lined up. If someone buys a direct contract less than 4 months out from the banking deadline DVC has traditionally banked those points if requested. They have even done this for resale buyers sometimes.

I think we are saying the same thing. I stated

So any resort prior to Riviera when they sold points as a June use year whenever they bought back it stayed as a June use year. Because the use year was declared against a unit.

And we are in agreement in combining:

They can split the contract however they want because that fractional entity ceases to exist. So they also can combine but it has to be from the same ownership “Unit”

However in the documents for Riviera they stated that multiple use years can exist within a single unit. So now they can change use years when they resell points. However, for the other resorts since you buy an ownership in a Unit and the use year is singular for a Unit and that’s what they own it has to stay the original use year.

Now as for the points, the OP was referring to points that had already been banked. So they can’t be banked again as Disney has to follow the rules on that. However, they can bank points past the banking deadline if they haven’t been banked ever so I agree there with you.

 

[JETSDAD]

However in the documents for Riviera they stated that multiple use years can exist within a single unit. So now they can change use years when they resell points. However, for the other resorts since you buy an ownership in a Unit and the use year is singular for a Unit and that’s what they own it has to stay the original use year.

They can change the UY for all resorts. CCV and Riviera had that in from the start but the membership agreements for the rest of the resorts were amended to allow that to be done for all resorts.

 

[crvetter]

They can change the UY for all resorts. CCV and Riviera had that in from the start but the membership agreements for the rest of the resorts were amended to allow that to be done for all resorts.

Oh yes thanks for the reminder, I did forget that they amended the contracts recently.

 

[crisi]

I

OKW they might start to buy back more aggressively and resell with the 2057 extension to get more of the resort extended. But they will not buy back contracts to hold on to. There is no way for DVC to buy back a entire unit. Some members will never sell and. DVC will never be able to get all points for a unit. Those resorts will expire on Jan 31 2042, DVC will then do a complete full refurbishment and resell them. All except OKW due to the extension already in place.

Those units are legal fictions. They just refile to redefine which units are which. Since you have no right as a member to "your unit" it doesn't make any difference - otherwise they'd never be able to take entire floors out of service for refurb.

 

[achinforsomebacon]

So if they can just change the UY, is there really any benefit of them taking one UY vs another? While they can change the UY, would it be more administrative work to change it so they might be more likely to take one to match up directly with a buyer vs taking another one that needs to change?

 

[CraigInPA]

OKW they might start to buy back more aggressively and resell with the 2057 extension to get more of the resort extended. But they will not buy back contracts to hold on to. There is no way for DVC to buy back a entire unit. Some members will never sell and. DVC will never be able to get all points for a unit. Those resorts will expire on Jan 31 2042, DVC will then do a complete full refurbishment and resell them. All except OKW due to the extension already in place.

In case you missed it, DVC has been aggressively going after OKW 2042 contracts and re-selling them as OKW 2057 contracts for the last couple of years. They've also priced their resale contracts fairly aggressively (compared to what they charge for many other resale resorts), and push them to people who want RIV or AUL and prefer a cheaper resort.

I doubt we'll see a large amount of OKW being refurbed in February 2042, and it certainly won't be resold as a new resort unless DVC negotiates a new ground lease that goes past 2057. Whether DVC will have sold enough OKW 2057 by January 31, 2042 to make the resort profitable to continue to operate is anyone's guess. There has been a lot of conjecture as to DVC's plans on OKW, including again offering a 15 year extension to OKW 2042 members, making some portion of the resort a cash resort, using un-needed buildings for other purposes (like the College program), etc... Only DVC knows what it is going to do, and based upon past performance, it may be that they don't have a long term plan for it yet.

 

[Sandisw]

So if they can just change the UY, is there really any benefit of them taking one UY vs another? While they can change the UY, would it be more administrative work to change it so they might be more likely to take one to match up directly with a buyer vs taking another one that needs to change?

I think when they take contracts it based on lots of factors. From what I have been told, most if not all the units..which is defined in many resorts as more than one actual room...have every UY attached to it,

They have the ability to move points around as well. So, if they take points from one unit and UY and move them, they just have to move an equal number back from another unit, Obviously, one a resort is sold out, this becomes more difficult because it would only be what they own, or what they see via resale.

But, I have read someone once wonder if the unit itself plays a role since it may match unit points they have and it works.

 

[RoseGold]

Disney can also break up big contracts and sell them as multiple, smaller contracts. In the pre-Covid days, they took a lot of the cheap, huge contracts. We just haven’t seen many of those lately.