Who do you feel should receive the 2020 dues credit- buyer or seller?

[DVCSunDevil]

That's just the easiest thing for DVC to do. They don't care what is right or fair. It keeps them out of the resale transaction.

Plus DVC sees dues differently than the typical resale seller / buyer do. In resale, dues are often associated with points recieved. To DVC, dues are a calendar year membership.

So, yeah, I'm sure they want nothing to do with these transactions. And I'm sure these refunds could have been negotiated to/from either party, and as long as both sides are happy, it doesn't matter.

To be fair, “refunding” 2020 MFs by reducing 2021 MFs is really the only way DVC could have done it. And choosing that option was completely fair, so I disagree that “they don’t care what is right or fair”. What was DVC supposed to do, refund all the credit cards that were used to pay 2020 MFs? What about those people that paid fees with check or via gift cards? Sorting that out would be chaos. The fairest and easiest way to handle it was to reduce 2021 MFs. DVC is trying to discourage resale sales, so why should they get involved with sorting out MF “refunds” among resale transactions? DVC knows that if a 2020 contract owner is really concerned about the refund, they will add it into the resale contract. I have no problem with that.

 

[pangyal]

Update:

Since this amount was not part of the contract, and the contract specifically says that the buyer is only responsible for the 2021 MF, which are of course lower as they are offset by the credit, the broker and the closing agent are looking into the legalities of having this be charged to us after the contract has gone through ROFR and is ready to close. They said to sit tight while they research the answer. I guess the sticky part is that the money would go straight to the seller, and this was not specified as part of either the purchase price or the closing costs prior to the contracts being signed and sent to Disney.

 

[Brian Noble]

As someone with no skin in the game (never bought or sold resale), the credit is for overpayment of 2020 dues. So, whoever paid 2020 dues is entitled to the credit / refund.

I also have no skin in the game, and I agree with this as a general principle. But, as others have noted it is certainly negotiable.

If the purchase was agreed to before the credit was announced (mid-December, if memory serves) then I think it is perfectly acceptable that (a) it wasn't part of the sales agreement and (b) the principle above be the default way to handle it.

Even if the purchase were agreed to after the credit were announced, I believe some consideration is warranted on the part of the buyer being asked to reimburse the credit. This is a very unusual situation, and it would be understandable for brokers, etc. to forget to include/think about it when they are drawing up agreements.

So, if I were the buyer, I'd be inclined to agree to the reimbursement. It seems to be correct as a matter of general principle, and forgetting to include it in the term sheet is an easily understandable mistake. I understand that there is nothing that is requiring me to agree to that, strictly speaking. But I still think it is the right thing to do.

 

[4luv2cdisney]

To be fair, “refunding” 2020 MFs by reducing 2021 MFs is really the only way DVC could have done it. And choosing that option was completely fair, so I disagree that “they don’t care what is right or fair”. What was DVC supposed to do, refund all the credit cards that were used to pay 2020 MFs? What about those people that paid fees with check or via gift cards? Sorting that out would be chaos. The fairest and easiest way to handle it was to reduce 2021 MFs. DVC is trying to discourage resale sales, so why should they get involved with sorting out MF “refunds” among resale transactions? DVC knows that if a 2020 contract owner is really concerned about the refund, they will add it into the resale contract. I have no problem with that.

I was saying almost exactly what you're saying. That they did what was easy (made sense) for them and don't care what kind of deal you get or don't get at resale. Fair is not their concern - not that they are unfair or are even attempting to be unfair. It is not up to them to decide what's fair because there is a bigger picture in a resale contract - maybe you're paying more per point but seller is paying closing etc etc

Though, refunding a new 2021 owner (if they are not the same as the 2020 owner and did not pay 2020 dues) may not truly be fair in the eyes of many (including me), it not their responsibility to do it any other way. It is the responsibility of the buyer / seller / broker to hash it out.

One more try at clarifying.... I still don't think DVC "cares" (nor should they), and I don't think they're wrong in their process.

 

[wvujeb]

As someone with no skin in the game (never bought or sold resale), the credit is for overpayment of 2020 dues. So, whoever paid 2020 dues is entitled to the credit / refund.

To me, you would not be paying full 2021 dues (which is what you agreed to) if you receive the credit.

I agree. I'm currently purchasing, waiting on estoppel, and hoping to receive my closing documents very soon. I planned on paying for the full 2021 MF. As the seller is paying for the 2020 MF, I have no problem with the seller receiving the credit.

 

[DVCSunDevil]

Update:

Since this amount was not part of the contract, and the contract specifically says that the buyer is only responsible for the 2021 MF, which are of course lower as they are offset by the credit, the broker and the closing agent are looking into the legalities of having this be charged to us after the contract has gone through ROFR and is ready to close. They said to sit tight while they research the answer. I guess the sticky part is that the money would go straight to the seller, and this was not specified as part of either the purchase price or the closing costs prior to the contracts being signed and sent to Disney.

Yes! Exactly. The contract stated you would pay the 2021 MF, which you are. But to then ask for the “refund” money after ROFR just seems...shady. It’s not that you are pulling a “got ya” sort of thing on the seller, either. I mean, if they would have asked you initially to reimburse them it it would be different. In that situation I would be like “yeah, ok”. But the refund wasn’t agreed to initially and was just added into the closing. That’s not how to do things.

Let us know what happens

 

[DVCSunDevil]

I also have no skin in the game, and I agree with this as a general principle. But, as others have noted it is certainly negotiable.

If the purchase was agreed to before the credit was announced (mid-December, if memory serves) then I think it is perfectly acceptable that (a) it wasn't part of the sales agreement and (b) the principle above be the default way to handle it.

Even if the purchase were agreed to after the credit were announced, I believe some consideration is warranted on the part of the buyer being asked to reimburse the credit. This is a very unusual situation, and it would be understandable for brokers, etc. to forget to include/think about it when they are drawing up agreements.

So, if I were the buyer, I'd be inclined to agree to the reimbursement. It seems to be correct as a matter of general principle, and forgetting to include it in the term sheet is an easily understandable mistake. I understand that there is nothing that is requiring me to agree to that, strictly speaking. But I still think it is the right thing to do.

I agree on your point about reimbursing the credit to the seller if the initial offer/acceptance and submittal to ROFR happened before the credit was announced. In that circumstance, the seller wouldn’t even have known about the credit yet. Reimbursing the seller would absolutely be fair in that situation.

But If the offer/acceptance and contract submittal to ROFR happened after the credit was announced then not including the credit is the fault of the seller. The brokers and title companies job isn’t to negotiate for added fees. The seller is the one who decides what to sell it for and if they want to be reimbursed for MEs and, in this case, be reimbursed for the 2020 credit. When you are selling a house, the real estate agent doesn’t just take it upon themselves to tell the buyer that they have to reimburse for what the seller just paid to have their pool fixed. The seller would have to decide to add that cost in as part of the terms and conditions. Same thing in this situation. If the initial offer happened after the credit was announced and then they tried to slip it in before closing that is just shady.

I am not a “got ya” person. I try to be fair and look at everything in terms of what it fair to both parties and then do the right thing. The issue I would have in this situation is adding something into the final closing that wasn’t part of the agreed upon terms and conditions between buyer and seller.

 

[DVCSunDevil]

I was saying almost exactly what you're saying. That they did what was easy (made sense) for them and don't care what kind of deal you get or don't get at resale. Fair is not their concern - not that they are unfair or are even attempting to be unfair. It is not up to them to decide what's fair because there is a bigger picture in a resale contract - maybe you're paying more per point but seller is paying closing etc etc

Though, refunding a new 2021 owner (if they are not the same as the 2020 owner and did not pay 2020 dues) may not truly be fair in the eyes of many (including me), it not their responsibility to do it any other way. It is the responsibility of the buyer / seller / broker to hash it out.

One more try at clarifying.... I still don't think DVC "cares" (nor should they), and I don't think they're wrong in their process.

Got it. Yeah, I think we were both saying the same thing. It’s so hard to convey thoughts sometimes on these comments

 

[drusba]

If it was not agreed to as part of the original contract, the seller has no right to now insist on the refund after ROFR has occurred and closing approaches.

As to whether it would have been initially fair for the seller to ask for the refund when doing the contract, I seem to be alone in believing the seller is being excessively greedy. The buyer is paying all 2021 dues but is not getting a complete contract. As mentioned in the opening post, many of the December 2020 points have already been used by the seller. Thus the buyer is getting a diminished contract for use in 2021, paying all 2021 dues, and now the seller also wants to get the refund back. That is not fair since the seller is selling less than a complete compliment of points to use in 2021. In fact, I question whether buyer should have ever agreed to pay all the actual dues for 2021.

 

[CarolMN]

The only completely fair thing to both buyer and sellers would be to add the excess to the reserves, which is what DVCMC has done in the past. I'm sure they made an exception this year because of Member feedback/pressure. Maybe they shouldn't have done so.

IMO, given what DVCMC decided, this is entirely negotiable between buyer and seller. If it was added to the contract after the terms were agreed to, then that is wrong. If it was in the terms of the purchase agreement, then that is on the buyer who agreed to it.

Personally at this point in the process, I agree with the decision @pangyal said she made - to just let it go and pay it rather than walking away and losing the contract. If I really didn't want the contract anymore, then I would walk if I was OK with losing the deposit.

 

[DVCSunDevil]

If it was not agreed to as part of the original contract, the seller has no right to now insist on the refund after ROFR has occurred and closing approaches.

As to whether it would have been initially fair for the seller to ask for the refund when doing the contract, I seem to be alone in believing the seller is being excessively greedy. The buyer is paying all 2021 dues but is not getting a complete contract. As mentioned in the opening post, many of the December 2020 points have already been used by the seller. Thus the buyer is getting a diminished contract for use in 2021, paying all 2021 dues, and now the seller also wants to get the refund back. That is not fair since the seller is selling less than a complete compliment of points to use in 2021. In fact, I question whether buyer should have ever agreed to pay all the actual dues for 2021.

Wow. That is a GREAT point. I can't believe I missed that in the original post. Considering there aren't even full points available for 2021, asking for all of those MFs definitely is not right.

And you aren't the only one who thinks the seller is being excessively greedy. I have commented several times on this thread that I feel the seller is nickel and dime'ing by asking for the 2020 "refund", especially by adding it in after everything cleared ROFR. If the OP really wanted to be a pain, they could go back and say they will only pay prorated 2021 MFs on the actual 2021 points they are getting. I wouldn't necessarily do that because I am not a vindictive person and I prefer both sides to be happy in a deal, but the seller is being ridiculous. The buyer is paying the MFs for all 2021 points even though they aren't getting all those points, and yet the seller still wants the 2020 "refund" after that refund wasn't even part of the initial terms and conditions that went through ROFR? Sorry, but that isn't fair for the buyer.

 

[sethschroeder]

Personally at this point in the process, I agree with the decision @pangyal said she made - to just let it go and pay it rather than walking away and losing the contract. If I really didn't want the contract anymore, then I would walk if I was OK with losing the deposit.

The seller also wants the money from the contract and it being torn up means they have to start over a 60-120 day process of getting paid. I would hold firm if it wasn't spelled out in the contract. If it says the buyer pays 2021 MFs then that credit is part of the 2021 MFs.

 

[DVCSunDevil]

The seller also wants the money from the contract and it being torn up means they have to start over a 60-120 day process of getting paid. I would hold firm if it wasn't spelled out in the contract. If it says the buyer pays 2021 MFs then that credit is part of the 2021 MFs.

Yep, that's exactly what I said early on. And it seems the broker and title company now understand that because the OP said they are now reviewing to see if the seller can even have the refund in the closing documents since it wasn't in the original agreement. You can't "move the goalposts" after both parties agreed to the terms and signed.

 

[Marionnette]

Looking at the ROFR thread, the OP negotiated a pretty nice price for the contract ($116 pp for RIV).

Is it possible that the seller thinks they can do better now and is using the “rebate” as a way to get out of going through with the sale? Sort of poisoning the well to make the buyer back out.

 

[DVCSunDevil]

Looking at the ROFR thread, the OP negotiated a pretty nice price for the contract ($116 pp for RIV).

Is it possible that the seller thinks they can do better now and is using the “rebate” as a way to get out of going through with the sale? Sort of poisoning the well to make the buyer back out.

If that is true, then the seller is being even more slimy about it. All over some "change" compared to what they are getting on the sale? What if the broker and title company come back after reviewing everything and say "yeah, the credit wasn't included in the original contract so the buyer doesn't have to pay it"? At that point the seller would have to be the one to back out, which they wouldn't. It's funny I am now this interested in a resale contract that isn't mine, lol. It is an interesting situation, though.

 

[EM Lawrence]

It is 100% shady that this was not discussed with you during contract negotiations. Maybe you can pay a percentage of the credit based on how many 2020 points are remaining?

 

[poofyo101]

I closed on a contract with 2021 dues I paid for. I am receiving a refund for the dues refund from 2020 as a separate check from closing company.

 

[Cyberc1978]

I don’t disagree that it’s fair for the seller to get the credit, because it IS supposed to be a refund of 2020 dues paid, just applied to 2021 MFs. But I’ll just note that this is not how Disney sees it when it comes to resale contracts. Whomever pays the 2021 dues gets the credit, regardless of whether or not they paid the 2020 dues.

Now if you bought direct, however, your credit is prorated based on the amount of 2020 dues you paid.

IIRC those that bought direct pays pro rated dues on the points during 2020, they also only get pro rated credit on their points too.

The only reason why Disney applies it towards the 2021 dues for resale is the easyness, not because is more right or wrong for that matter. They only pro rated it because they want their "cut" too.

IMO the one that's paying the 2020 dues should get the credit. If you only pay dues on 10 points you should only get a credit that equals 10 points.

 

[pangyal]

Final Update:

First of all- thank you all for your extremely valuable and interesting input! This has been a very interesting situation for me, and I really enjoyed and appreciated everyone’s point of view.

In the end, the closing agent has let me know that a new closing statement will be drafted with the MF credit removed. The issue is 100% that a monetary amount cannot be added to a payable after the contract has been signed by both parties and has passed ROFR. If the sellers had requested that this credit be a part of the final amount prior to contract signing, it would have been fine- but, since this was an amount outside of any contracted obligations, they simply cannot ask for it “after the fact”.

So- lesson learned. If you are selling and want this credit, please be sure to mention it prior to contracts being generated so that it can be explicitly spelled out as part of the sale.

 

[DVCSunDevil]

Final Update:

First of all- thank you all for your extremely valuable and interesting input! This has been a very interesting situation for me, and I really enjoyed and appreciated everyone’s point of view.

In the end, the closing agent has let me know that a new closing statement will be drafted with the MF credit removed. The issue is 100% that a monetary amount cannot be added to a payable after the contract has been signed by both parties and has passed ROFR. If the sellers had requested that this credit be a part of the final amount prior to contract signing, it would have been fine- but, since this was an amount outside of any contracted obligations, they simply cannot ask for it “after the fact”.

So- lesson learned. If you are selling and want this credit, please be sure to mention it prior to contracts being generated so that it can be explicitly spelled out as part of the sale.

I figured that was going to be the decision. Glad it all worked out. Enjoy the new contract!