Would you join a lawsuit to revert DVC's resale restrictions?

[Sandisw]

Moderator hat. Just a gentle reminder..since this is an older thread that the DIS does not allow the the solicitation or organization of owners for such a lawsuit.

Discussion and opinions are fine! Polls, etc would not.

 

[Grumpy by Birth]

I also question the legality of how Disney can buy back points and then resell them as new.

Aren't they just reselling them as "direct" and not necessarily "new"? Everything always mentions buying directly from DVC vs buying resale from third party.

I can't speak to the legality of it, but it does seem a little seedy. When Disney exercises ROFR, they have essentially purchased a resale contract (they didn't buy it direct from themselves, but from another owner who resold it) which would have the restrictions if you or I bought it, but Disney can arbitrarily eliminate/ignore the resale restrictions imposed on that contract when THEY buy resale.

 

[achinforsomebacon]

I can't speak to the legality of it, but it does seem a little seedy. When Disney exercises ROFR, they have essentially purchased a resale contract (they didn't buy it direct from themselves, but from another owner who resold it) which would have the restrictions if you or I bought it, but Disney can arbitrarily eliminate/ignore the resale restrictions imposed on that contract when THEY buy resale.

I agree. But when they resell the points, the new owner has technically purchased directly from DVD, which qualifies them for the direct benefits. I'm not saying it's right, but it is probably technically ok.

What would be interesting is how are they using the points they get through ROFR. These would be resale points and I would think they should be subject to the resale restrictions. This might not be a huge deal yet because the only resort it applies to is RIV, but it could matter in the future. Are they/will they use these points legally? How would we ever know?

 

[KAT4DISNEY]

Correct, but I do not see how its possible to give yourself the benenfit above other members of the club when its literally the same product.

If the benefits were paid for by the associations and owners then I'd agree they couldn't but the benefits either are paid for by DVD/DVC themselves or offered by other entities. And of course if they were paid by us owners they shouldn't have been able to restrict in the first place. There is no line in our budgets for Moonlight Magic or for the Epcot lounge or even for AP discounts. DVC recovers points both from foreclosures and ROFR and throws them back into a great big pool with their own points they own.

The resale DVC trade part gets iffier and I'd have to think about that more. It seems to fall into the great big void of "other timeshares have done it so it's allowed". And it may just highlight the point about them ignoring the POS and allowing Riviera into the system with different rules when they shouldn't have.

 

[kristenrice]

I agree. But when they resell the points, the new owner has technically purchased directly from DVD, which qualifies them for the direct benefits. I'm not saying it's right, but it is probably technically ok.

What would be interesting is how are they using the points they get through ROFR. These would be resale points and I would think they should be subject to the resale restrictions. This might not be a huge deal yet because the only resort it applies to is RIV, but it could matter in the future. Are they/will they use these points legally? How would we ever know?

^^^THIS is a very good point! When DVD acquires points through ROFR, they are purchasing a resale contract. Until those points are sold (as "direct" points) they should hold the same restrictions that ALL resale points hold. I would think that means that OTU points would not be available at Riviera unless Disney is using unsold points from Aulani or Riviera to fill reservations as those would be the only "eligible" points, correct? Or is there some behind the scenes magic going on where DVD is "selling" the contracts to themselves to "convert" them to direct points??

 

[JohnGypsy]

We'd have to read the fine print to be sure, but I get the impression it differentiates between points sold "direct" from Disney and everything else is resale. So, even though, in our minds, we see them as "resale" points once they have been sold -- from a LEGAL standpoint, they are still being sold "direct" from Disney -- regardless if they have been sold and re-bought before.

If that is how it is written, then they are "directly sold" points (again, regardless if previously "used"/resale) and, therefore, do not have the "resale" restrictions on them. They were sold "direct" and therefore those rules apply. (Again, regardless of their life before Disney bought them back.)

It likely isn't written as "being sold directly by Disney for the first time." It's just "sold directly" -- which they are -- even if purchased by Disney via ROFR.

EDIT: Oh! But, yes, during the time that they are bought by Disney via ROFR and until Disney sells them "direct" to someone else, then they should have the restrictions apply, I would think. Again, I'm making some assumption about how it is legally written, of course.

 

[CarolMN]

From the Membership Extras Acknowledgement and Disclosure Statement:

"This Statement serves as the acknowledgment and disclosure statement, as required pursuant to Section 721.075, Florida Statutes, for the incidental benefits program known as Membership Extras (the “Program”) provided by Disney Vacation Development Inc. (“DVD”) to purchasers, including the undersigned purchaser (“Purchasers”). This Statement contains information about the Program and the special benefits, offers and opportunities (the “Benefits”) made available through the Program by DVD to Purchasers who directly purchase an Ownership Interest from DVD and become members in Disney Vacation Club® (the “Club”). Any capitalized terms used in this Statement that are not defined in this Statement shall have the meaning provided in the Public Offering Statement provided to Purchaser in connection with the purchase of an Ownership Interest. “Member” as used in this Statement shall mean a Purchaser who has acquired an Ownership Interest directly from DVD and is a member of the Club in good standing pursuant to the terms and provisions of the Club, including compliance with all Club and DVC Resort rules and regulations and current payment of all annual dues and purchase-money financing".

I added the underlining and Bolding. How DVD acquires the points it sells {new build, foreclosure, exercise of ROFR) is irrelevant as far as "Blue Card" benefits and perks are concerned..

 

[rarb33]

From the Membership Extras Acknowledgement and Disclosure Statement:

"This Statement serves as the acknowledgment and disclosure statement, as required pursuant to Section 721.075, Florida Statutes, for the incidental benefits program known as Membership Extras (the “Program”) provided by Disney Vacation Development Inc. (“DVD”) to purchasers, including the undersigned purchaser (“Purchasers”). This Statement contains information about the Program and the special benefits, offers and opportunities (the “Benefits”) made available through the Program by DVD to Purchasers who directly purchase an Ownership Interest from DVD and become members in Disney Vacation Club® (the “Club”). Any capitalized terms used in this Statement that are not defined in this Statement shall have the meaning provided in the Public Offering Statement provided to Purchaser in connection with the purchase of an Ownership Interest. “Member” as used in this Statement shall mean a Purchaser who has acquired an Ownership Interest directly from DVD and is a member of the Club in good standing pursuant to the terms and provisions of the Club, including compliance with all Club and DVC Resort rules and regulations and current payment of all annual dues and purchase-money financing".

I added the underlining and Bolding. How DVD acquires the points it sells {new build, foreclosure, exercise of ROFR) is irrelevant as far as "Blue Card" benefits and perks are concerned..

Based on the wording in the contract that you highlighted, you could argue that if the points are still in good standing and fees have been paid the original owner of the points would still have member benefits even if they aren't in control of the points anymore and sold them. The points the orginal owner purchases are valid for up to 50 years, as a resale purchaser you are buying the rights to those points from the original owner, you are not buying new points. According to Florida Statute 721.075 incidental benefits can only be 15% of the origianl purchase price. What needs to happen, is to request line item budget for the member incidental benefits. If resorts are paying DVD money from Dues allocation then all memebers are entitled to memeber benefits becuase they are paying for them. If DVD is only using profits from direct sales than under this statute it can only be 15% of the sale price. However, you could then argue that the contract would have paid for the incidental benefits uder the original owner and member benefits should be transferable to the next owner who pays the annual dues.

If this was a condo purchase or other real estate purchase and you had to pay HOA fees and didnt have the same beneifts as some of you neighbors you wouldnt be very happy. Yes i understand that you purchased resale but the person only paid what the original owner wanted to sell for. You cant argue just buy direct if you want the benefits when you are purchasing the rights to an already existing contract, the beneifits have already been paid for.

 

[Chuck S]

Based on the wording in the contract that you highlighted, you could argue that if the points are still in good standing and fees have been paid the original owner of the points would still have member benefits even if they aren't in control of the points anymore and sold them. The points the orginal owner purchases are valid for up to 50 years, as a resale purchaser you are buying the rights to those points from the original owner, you are not buying new points. According to Florida Statute 721.075 incidental benefits can only be 15% of the origianl purchase price. What needs to happen, is to request line item budget for the member incidental benefits. If resorts are paying DVD money from Dues allocation then all memebers are entitled to memeber benefits becuase they are paying for them. If DVD is only using profits from direct sales than under this statute it can only be 15% of the sale price. However, you could then argue that the contract would have paid for the incidental benefits uder the original owner and member benefits should be transferable to the next owner who pays the annual dues.

If this was a condo purchase or other real estate purchase and you had to pay HOA fees and didnt have the same beneifts as some of you neighbors you wouldnt be very happy. Yes i understand that you purchased resale but the person only paid what the original owner wanted to sell for. You cant argue just buy direct if you want the benefits when you are purchasing the rights to an already existing contract, the beneifits have already been paid for.

Member benefits, like the private park parties, Ticketing, dining and shopping discounts are negotiated and paid by DVC Marketing, not the DVC Membeship dues

 

[808blessing]

Member benefits, like the private park parties, Ticketing, dining and shopping discounts are negotiated and paid by DVC Marketing, not the DVC Membeship dues

How does Marketing get paid? DVD?

 

[Sandisw]

How does Marketing get paid? DVD?

Yes.

 

[rarb33]

Member benefits, like the private park parties, Ticketing, dining and shopping discounts are negotiated and paid by DVC Marketing, not the DVC Membeship dues

Understand but the money has to come from somewhere, it doesn’t just appear. The only source of yearly income is annual dues.

 

[Chuck S]

Understand but the money has to come from somewhere, it doesn’t just appear. The only source of yearly income is annual dues.

Sales is their source of income for marketing, not dues.

 

[rarb33]

Sales is their source of income for marketing, not dues.

I would love to believe that but their is no financial way that one years of sales pays for the last 30 years of direct members yearly benefits. It’s an impossibility. Their are too many members.

 

[Chuck S]

I would love to believe that but their is no financial way that one years of sales pays for the last 30 years of direct members yearly benefits. It’s an impossibility. Their are too many members.

What do you think "discounts" cost? The only major payouts are for the EPCOT lounge, which has not been there for 30 years, and the private parties. But I think direct members pay a fee now for the parties. Prior to that, marketing paid for the limited park admission perk until the year 2000, for those that purchased prior to 1996. And park tickets were much cheaper back then.

Remember, the dues are audited by an accounting firm.

 

[Sandisw]

I would love to believe that but their is no financial way that one years of sales pays for the last 30 years of direct members yearly benefits. It’s an impossibility. Their are too many members.

DVD is a different division than DVCMC. From my understanding, that the discounts for merchandise and food are agreements with those vendor to offer the discount…it doesn’t cost anything.

Same with the AP…it’s a deal with DPEP to include DVC owners in the same program for certain tickets offered to FL residents…again, not costing anything to DVD.

That leaves the Epcot lounge and any special events. DVCMC is simply the management company and are not the ones offering anything.

 

[KAT4DISNEY]

Based on the wording in the contract that you highlighted, you could argue that if the points are still in good standing and fees have been paid the original owner of the points would still have member benefits even if they aren't in control of the points anymore and sold them. The points the orginal owner purchases are valid for up to 50 years, as a resale purchaser you are buying the rights to those points from the original owner, you are not buying new points. According to Florida Statute 721.075 incidental benefits can only be 15% of the origianl purchase price. What needs to happen, is to request line item budget for the member incidental benefits. If resorts are paying DVD money from Dues allocation then all memebers are entitled to memeber benefits becuase they are paying for them. If DVD is only using profits from direct sales than under this statute it can only be 15% of the sale price. However, you could then argue that the contract would have paid for the incidental benefits uder the original owner and member benefits should be transferable to the next owner who pays the annual dues.

If this was a condo purchase or other real estate purchase and you had to pay HOA fees and didnt have the same beneifts as some of you neighbors you wouldnt be very happy. Yes i understand that you purchased resale but the person only paid what the original owner wanted to sell for. You cant argue just buy direct if you want the benefits when you are purchasing the rights to an already existing contract, the beneifits have already been paid for.

Except for this: and is a member of the Club in good standing

Your membership is based on currently owning. If you sell you are not a current owner nor a member.

 

[Thumper99]

This is probably a really simplistic way of looking at this and we bought BLT direct so ( as of now) none of this impacts us…. But why isnt it simply you “ pay the dues for your points, you get the benefits”. What is the reason behind Disney “dividing” based on how you became a DVC member. Didn’t Disney have the chance to buy the points in ROFR so they could resell it as “new and direct”. What was their intended benefit in the Riviera situation?

 

[KAT4DISNEY]

This is probably a really simplistic way of looking at this and we bought BLT direct so ( as of now) none of this impacts us…. But why isnt it simply you “ pay the dues for your points, you get the benefits”. What is the reason behind Disney “dividing” based on how you became a DVC member. Didn’t Disney have the chance to buy the points in ROFR so they could resell it as “new and direct”. What was their intended benefit in the Riviera situation?

They believe it will help earn them more money by convincing people that instead of purchasing a resale contract that they ought to purchase direct. And they decided to follow other timeshare models that do it that way.

 

[CarolMN]

This is probably a really simplistic way of looking at this and we bought BLT direct so ( as of now) none of this impacts us…. But why isnt it simply you “ pay the dues for your points, you get the benefits”. What is the reason behind Disney “dividing” based on how you became a DVC member. Didn’t Disney have the chance to buy the points in ROFR so they could resell it as “new and direct”. What was their intended benefit in the Riviera situation?

They believe it will help earn them more money by convincing people that instead of purchasing a resale contract that they ought to purchase direct. And they decided to follow other timeshare models that do it that way.

And to some extent, that strategy has been working. FOMO can be a powerful incentive. There are several reports here on the DIS of people buying the minimum number direct points just to qualify for Membership Extras. Most of them would have bought entirely resale if it didn't matter for getting the ME perks and discounts.