What Happens When Some OKW Contracts Expire and Some Don't?

[nickspace]

What Happens When Some OKW Contracts Expire and Some Don't? I am thinking about adding on a OKW but am a little worries about this.

 

[vicki_c]

Not sure what you mean by "what happens". They end when they end and at that point, as the owner you wouldn't need to care about what happens because your ownership and obligations would be over.

 

[bzzelady]

I think that the OP means what happens if his contract doesn't expire until 2057 but let's say...3/4 of the other contracts expire in 2042 and he is left without a lot of neighbors to share maintenance...costs of staffing the resort...and so forth.

This is an interesting thought to discuss

 

[eva]

I think that the OP means what happens if his contract doesn't expire until 2057 but let's say...3/4 of the other contracts expire in 2042 and he is left without a lot of neighbors to share maintenance...costs of staffing the resort...and so forth.

This is an interesting thought to discuss

That is an interesting question. But I feel that you would still only pay based on the percentage of the resort that you own. The other points will likely be converted to cash reservations until new points are sold at the resort.

 

[bicker]

Yes, either the developer will sell those slots as cash reservations and pay the associated maintenance for those points, or they'll simply resell the units to new owners (or let you renew your contract [again]).

 

[dianeschlicht]

Plus, anyone who buys a 2042 contract has the option of paying the extension now, so some of those 2042 contracts will become extended ones anyway.

 

[Mtnman44]

Make the extention decision in 2041.

 

[nickspace]

I think that the OP means what happens if his contract doesn't expire until 2057 but let's say...3/4 of the other contracts expire in 2042 and he is left without a lot of neighbors to share maintenance...costs of staffing the resort...and so forth.

This is an interesting thought to discuss

Exactly! Could get ugly!

 

[dianeschlicht]

Exactly! Could get ugly!

I don't think it will be an issue, because by then the contracts would either have been resold or extended.

 

[jlewisinsyr]

I don't think it will be an issue, because by then the contracts would either have been resold or extended.

Right, a person ownership percentage doesn't change and the maintenance/taxes associated will always be based on that percentage. When ownership ceases for some individuals it will go back to Disney and like with unsold, new units, the developer/Disney will need to pay their share of the maintnence/taxes. It will be in Disney's best interest to do something with those units to avoid large cash outlays.

 

[DVC SSR Owner]

This is interesting. When point contracts expire, I assume DVD owns them and has to pay their share of the MFs, but who knows for sure.

 

[nickspace]

Right, a person ownership percentage doesn't change and the maintenance/taxes associated will always be based on that percentage. When ownership ceases for some individuals it will go back to Disney and like with unsold, new units, the developer/Disney will need to pay their share of the maintnence/taxes. It will be in Disney's best interest to do something with those units to avoid large cash outlays.

This makes sense but the unknown factor still makes me feel uneasy about buying an OKW contract and how many of these unknown factors exist.

 

[jlewisinsyr]

This makes sense but the unknown factor still makes me feel uneasy about buying an OKW contract and how many of these unknown factors exist.

Well, we know the percent ownership of a unit cannot change, that's a guarantee because it's deeded as a interest in a unit. Units that revert back to Disney at contract end will need to be maintained by Disney/DVD, they are no longer owned by members who would pay the dues on the units (and associated percentages).

Think about it this way, when DVC forecloses, buys or takes over a property it goes back into Disney's bucket of property. They can use the property as they see fit (ie. use it as rental, resell it, etc.) but they are responsible for the dues portion of the ownership interest in the units represented.

I think the concern is a little unfounded and I think when you look at things logically it answers many of the factors. I think a larger concern people should have is the general increase in dues in general, as these buildings begin to age, the maintenance will increase. This should be factored into the dues as part of reserves, but major unplanned refurbishments or poor choice of general refurbishments over the years could deplete the reserves quicker then anticipated and the dues will need to be increased to ensure the reserve account is properly funded or a special assessment will be needed.