What happens to Old Key West afterr 2042? I own a 2057 contract.

[jshadd]

What will happen to Old Key West between 2042 and 2057? I understand that 20-30% of the resort's members have contracts that expire in 2057, while the rest end in 2042. How will DVC manage the resort over the next 15 years? Will DVC make an attractive last-minute offer to encourage everyone to extend their contracts to 2057? Is that even legal? Could Disney automatically change the end date of all contracts to 2057? After the 2042 contracts expire, would Disney sell new contracts with a 15-year life at a reduced price? What will happen to maintenance costs during this period? We don't know what DVC will decide, but I would like to understand what Old Key West resort, looks like, My contact which expires in 2057.

 

[Brian Noble]

No one really knows. But, here are some bets I'm willing to make:

1: They will not automatically extend everyone for free. I will take any odds on this.
2: They might offer current owners an extension. It might be an okay deal. It won't be a great one.
3: They will be wiling to sell OKW with a 2057 expiration if someone wants to buy it; they are still selling 2042 resorts.

 

[Mouseforward]

The 2042 contracts expire, but the shares of the units of course still exist. The 2057 points at that date have to persist until Jan 31 2057.

Now that WDW has started trust based timeshares, they have the option to take all the shares of the units from the now expired 2042 contracts and resell them in a trust product ( not necessarily Palmetto trust like the cabins). Using a trust, it will not matter if the points are spread over different "units". The issue is will people accept a higher point chart for the trust than the 2057 contracts in the 15 gap years where both exist.

 

[muppets3d]

What's interesting is what if a unit has points that expire in 2042 and 2057, I'd imagine that is fairly common. How does Disney reconcile that when the time comes.

 

[Tatebeck]

The 2042 contracts expire, but the shares of the units of course still exist. The 2057 points at that date have to persist until Jan 31 2057.

Now that WDW has started trust based timeshares, they have the option to take all the shares of the units from the now expired 2042 contracts and resell them in a trust product ( not necessarily Palmetto trust like the cabins). Using a trust, it will not matter if the points are spread over different "units". The issue is will people accept a higher point chart for the trust than the 2057 contracts in the 15 gap years where both exist.

Even if they add it to the trust and resell the points there, I don't think they will (and I'm not sure if they even CAN) increase the point charts across the board, only shift them between room types.

The 2057 contracts already extended/sold will be spread throughout the various units and they each have a percentage of the unit and a point number associated with them.

If you change the point charts for all of OKW, the percentage ownership numbers will be incorrect on their contracts (and maybe the 2057 purchasers will be owed additional points to make up for it? I'm not sure what they would/could do to try and remedy this)

 

[muppets3d]

The 2042 contracts expire, but the shares of the units of course still exist. The 2057 points at that date have to persist until Jan 31 2057.

Now that WDW has started trust based timeshares, they have the option to take all the shares of the units from the now expired 2042 contracts and resell them in a trust product ( not necessarily Palmetto trust like the cabins). Using a trust, it will not matter if the points are spread over different "units". The issue is will people accept a higher point chart for the trust than the 2057 contracts in the 15 gap years where both exist.

I'm not convinced that higher points charts are a given, frankly.

 

[Sandisw]

The 2042 contracts expire, but the shares of the units of course still exist. The 2057 points at that date have to persist until Jan 31 2057.

Now that WDW has started trust based timeshares, they have the option to take all the shares of the units from the now expired 2042 contracts and resell them in a trust product ( not necessarily Palmetto trust like the cabins). Using a trust, it will not matter if the points are spread over different "units". The issue is will people accept a higher point chart for the trust than the 2057 contracts in the 15 gap years where both exist.

Actually, I don’t think they can move partial units into the trust.

They can only move whole units because the property has to be added and DVD has to be the owner of the unit.

Now, they can try to get owners of 2057 contract to sign new deeds to other units so that it frees up whole units.

But, as long as an owner other than DVD owns some of that unit, it can’t go into the trust because it then would need to be removed from the original declaration in the OKW association.

They can shutter building for use regardless of ownership, can offer for cash, use the points to trade into other resorts and keep them there as part of BVTC.

 

[Sandisw]

The multisire POS already gives insight that the current plan is that anyone who didn’t extend will have their contract end 2042.

So, unless someone actually bought a 2057 contract or they are an original owners who did, all those contracts dissolve and the ownership goes back to DVD.

I don’t see them offering extensions at all. DVD will be responsible for the dues on the points they own unless they offer a guarantee like they do now.

 

[Mouseforward]

They can only move whole units because the property has to be added and DVD has to be the owner of the unit.

DVD does not own the unit now , it has a 50 year lease on the unit. If for example 2% of the unit is 2057 contracts then they could renegotiate the lease to accommodate, and not change any use rights or points for the owners.

 

[Lumpy1106]

Wouldn't they do the reverse of what they do with a new DVC? That being; take Riviera for example. It is not sold out, but that does not mean that if you own RIV you get unlimited availability. They hold back a percentage of the units to rent out for cash stays until it is sold out, then it will be 100% DVC (assuming it was meant to be 100% DVC by design but you get what I'm saying). When the 2042 OKW contracts run out they will put in holding a percentage of units for cash stays equivalent to the percentage of points that are no longer owned (the 2042 contracts). If 20% of the contracts are 2057, then 20% of the resort will still be DVC and you will have the same availability in 2043 as you will in 2041.

That would be the simple thing. Beach Club and Boardwalk are already not 100% DVC so those resorts would just be fully cash stays in 2043. Question is, does Disney want a glut of hotels in 2042, or will they do something else to convert those to new DVC contracts? Guessing it will have a lot to do with the economy in 2040 or thereabouts.

Sorry if that's boring, but, LSS - I don't think you will really notice all that much when the contracts expire - that is unless Disney tore down the buildings and built something else, but why would they do that?

 

[Sandisw]

DVD does not own the unit now , it has a 50 year lease on the unit. If for example 2% of the unit is 2057 contracts then they could renegotiate the lease to accommodate, and not change any use rights or points for the owners.

But to move inventory to the trust, they have to own the entire unit.

So, if they want to move Unit 1, and they only own 50% of that unit and the other 50% is owned bt others, then that unit can not go to the trust.

They’d need to have those other owners to give up ownership in that specific unit in exchange for a different unit so DVD becomes sole owner.

It has nothing to do with use, but the inventory and where it is declared

You can’t have some of the same unit be in two different associations.

 

[Tatebeck]

DVD does not own the unit now , it has a 50 year lease on the unit. If for example 2% of the unit is 2057 contracts then they could renegotiate the lease to accommodate, and not change any use rights or points for the owners.

That's just like them trying to get every single owner who didn't extend to sign the quit claim deed. Spoiler; They never were able to.

It is just too hard to get every single owner to sign something away. They would not be required or forced to sign, so it leaves everything in the hands of the owners. I highly doubt DVC wants that. They have rights due to their contracts that DVC can't just take away because they feel like it. A few stubborn members could derail the whole plan.

But to move inventory to the trust, they have to own the entire unit.

So, if they want to move Unit 1, and they only own 50% of that unit and the other 50% is owned bt others, then that unit can not go to the trust.

They’d need to have those other owners to give up ownership in that specific unit in exchange for a different unit so DVD becomes sole owner.

It has nothing to do with use, but the inventory and where it is declared

You can’t have some of the same unit be in two different associations.

Exactly. Would be very hard to do.

 

[Mouseforward]

That's just like them trying to get every single owner who didn't extend to sign the quit claim deed. Spoiler; They never were able to.

It is just too hard to get every single owner to sign something away. They would not be required or forced to sign, so it leaves everything in the hands of the owners. I highly doubt DVC wants that. They have rights due to their contracts that DVC can't just take away because they feel like it. A few stubborn members could derail the whole plan.


Exactly. Would be very hard to do.

Our contracts allow the ground lease to be altered - did poly vote to add PIT ? did SSR? And Vero Beach was reduced without a vote .

The " unit " parts that are 2042 revert back to DVC they have very few limits on what they can do with it. Or at least I can not find any in our POS.

ETA: On Feb 1st 2024 DVC will also have around 75% of the voting rights of OKW so basically they can do what they want even if it required a vote.

 

[Mouseforward]

So, if they want to move Unit 1, and they only own 50% of that unit and the other 50% is owned bt others, then that unit can not go to the trust.

There are no units in the trust - the " unit " is a function of the POS of the condo resort and exists only for that purpose. As long as the 2057 owners do not lose any rights under the trust, then nothing needs to be changed. So in your example if they owned 50% of that unit DVC can do what it likes with the 50% it owns without violating any terms of the 2057 owners contract.

 

[Tatebeck]

Our contracts allow the ground lease to be altered - did poly vote to add PIT ? did SSR? And Vero Beach was reduced without a vote .

The " unit " parts that are 2042 revert back to DVC they have very few limits on what they can do with it. Or at least I can not find any in our POS.

There are no units in the trust - the " unit " is a function of the POS of the condo resort and exists only for that purpose. As long as the 2057 owners do not lose any rights under the trust, then nothing needs to be changed. So in your example if they owned 50% of that unit DVC can do what it likes with the 50% it owns without violating any terms of the 2057 owners contract.

Those aren't the same thing at all. (but I'm not sure what you are talking about with VERO at all actually, so I'm talking about the others). Expanding a resort and adding more units does not remove or split the units that are already declared. The rooms that are part of the association when you bought are still there, and they can simply add more. Its just like when they declare new units of RIV, VDH, etc.

Once a unit is added and someone buys part of it, those rooms are now all available to the members who purchased previous units in the same condo association at 11 months (and eventually direct buyers at 7 months) You simply cannot just choose to remove units (or parts of units) after the fact once members own a portion of them and remove those rooms from the bookable pool of rooms without breaching contracts. At least not without a specifically approved reason as stated in those contracts. Like the units being destroyed in a natural disaster, etc. Simple as that

 

[Mouseforward]

Once a unit is added and someone buys part of it, those rooms are now all available to the members who purchased previous units in the same condo association at 11 months (and eventually direct buyers at 7 months) You simply cannot remove units (or parts of units) after the fact once members own a portion of them and remove those rooms from the bookable pool of rooms without breaching contracts. Simple as that

Not seeing this in the contract.

 

[Tatebeck]

Not seeing this in the contract.

Then you either didn't look for it or didn't read it. From the OKW POS.

"(1) Phasinq Plan. The Lake Buena Vista Resort has been developed as aphase condominium, and additional land or Units may be added to the Lake Buena Vista Resortfrom time to time, The overall boundary of the property wtrich DVD contemplates adding to theLake Buena Vista Resort is described in the Survey, Floor and Plot Plan. DVD reserves the rightnot to add any additional property or all of the property included within the overall boundary. TheCondominium Documents for a particular phase will be recorded prior to the closing of the purchaseof any Ownership Interest in that phase. The Common Expense, Common Surplus and CommonElement ownership reallocation caused by the addition of any proposed phase is set forth in thePercentage Interest in the Common Elements.24DVD is under no obligation to submit phases to the Lake Buena Vista Resortin any sequence or to construct, develop or add any phase other than those phases that DVD hasalready declared as part of the Lake Buena Vista Resort. DVD may, from time to time, file phasesfor sale under Florida law without selling Ownership Interests in those phases or ultimately addingsuch phases to the Lake Buena Vista Resort. Pursuant to Chapter 718, the Declaration and wherepermitted, DVD specifically reserves the right to increase or decrease the size of a given Unit in itssole discretion prior to adding the phase in which the Unit is located to the Lake Buena Vista Resort.DVD also specifically reserves the right to amend the Condominium Documents, without theapproval of the Owners or Purchasers, as may be required by any public body or in order toconform any provisions thereof to the requirements of law, so long as the same would not prejudiceor impair to any material extent the rights of the Owners or any mortgagee of record"

TLDR: They only reserved the right to change increase/decrease units BEFORE it is added to the overall DVC resort being sold...

 

[Mouseforward]

TLDR: They only reserved the right to change increase/decrease units BEFORE it is added to the overall DVC resort being sold

Where does it say they can not ( with a probable excess of 75% of the voting rights) change it afterwards? Since they are not decreasing the unit but re-leasing their share of it?

 

[Sandisw]

There are no units in the trust - the " unit " is a function of the POS of the condo resort and exists only for that purpose. As long as the 2057 owners do not lose any rights under the trust, then nothing needs to be changed. So in your example if they owned 50% of that unit DVC can do what it likes with the 50% it owns without violating any terms of the 2057 owners contract.

That is not accurate. When they declare inventory into the trust, they need to define exactly what that is.

It’s easy with the cabins because they are all self contained inventory.

If they wants to add any rooms from OKW to the trust, DVD must own all of it. They can’t own only some of it.

Example…let’s say Unit 1 at OKW is comprised of 20 two bedroom unit. All 20 are declared as part of the OKW association.

DVD can’t move 10 of those out and make them part of trust inventory simply because they are deeded to 50% of the points assigned to those rooms.

To remove inventory from OKW association, it has to be undeclared and it can’t be undeclared if there are owners other than DVD attached to it.

So, from the way the trust seems to be written along with the current POS, DVD has to be the actual owner of the inventory they put into the trust before they can activate it in a RTU plan.

Remember, as an owner, we have ownership in a specific unit and our share of that unit can’t be changed, without a new deed, and the entire unit has to remain as declared inventory.

In the trust, DVD remains sole owner of all inventory.

Basically the same room can’t sit in two associations at the same time.

 

[Sandisw]

Wouldn't they do the reverse of what they do with a new DVC? That being; take Riviera for example. It is not sold out, but that does not mean that if you own RIV you get unlimited availability. They hold back a percentage of the units to rent out for cash stays until it is sold out, then it will be 100% DVC (assuming it was meant to be 100% DVC by design but you get what I'm saying). When the 2042 OKW contracts run out they will put in holding a percentage of units for cash stays equivalent to the percentage of points that are no longer owned (the 2042 contracts). If 20% of the contracts are 2057, then 20% of the resort will still be DVC and you will have the same availability in 2043 as you will in 2041.

That would be the simple thing. Beach Club and Boardwalk are already not 100% DVC so those resorts would just be fully cash stays in 2043. Question is, does Disney want a glut of hotels in 2042, or will they do something else to convert those to new DVC contracts? Guessing it will have a lot to do with the economy in 2040 or thereabouts.

Sorry if that's boring, but, LSS - I don't think you will really notice all that much when the contracts expire - that is unless Disney tore down the buildings and built something else, but why would they do that?

The ground lease for OKW was extended until 2057. That means that all declared inventory is available for booking by OKW owners until 2057.

All that happens in 2042 is that DVD becomes the owner of more of that inventory but it doesn’t leave the association.

So, there are about 7.7 million points of declared inventory in OKW and in 2042 there will still be 7.7 million points of declared inventory in OKW.

DVD can certainly book rooms with their points and offer them to cash guests,,,but owners with 2057 contracts will have access to the same number of rooms to book as they do today.

It’s not the same as what happens when resorts are new…DVD declares in phases and rooms that haven’t yet been declared are not part of DVC until they do.

So, that is a different type of inventory offered for cash.