15 Year Extension at OKW for $25 per point

[theostwalts]

What is the current price point for DVC other than AKV/SSR? Would it be possible for Disney to start exercising its ROFR more often and start selling contracts at older resorts with the extended dates at the higher price point?

 

[WebmasterDoc]

You want to read the Declaration of Condominium sections 2.10, 2.11 and all of Article 8. Also the Bylaws section 6.1 and the Master Cotenancy Agreement section 7 which would not give them the right to collect this type of assessment it appears. The part I shortened minimally is section 8.1.

Read it and see what you think. I'd be interested if you can find anything that would legally allow for a SA for extension or anything that would separate extension of the land lease from extension of an individual membership, I couldn't. As I see it they are stuck between possibly extending for all for free, abandoning this project, selling this as a "separate" ownership or getting the members to vote directly. I believe that having the voting rep do so would be a violation of the POS in this instance unless it's a free extension.

OK- I've got the Declaration of Condominium in front of me now. The section you quoted above (8.1) covers Assessments and Common Expenses - assessment is defined as any funds due to the Condominium Association - normally our annual maintenance fees. What you provided above was a list of "Common Expenses" and is in addition to the list of "Common Expenses" already covered in Article 2.11. It is NOT an all inclusive list as it is described that "Common Expenses" shall include the following. Article 2.11 includes a list of twelve descriptions of the type of things considered to be "Common Expenses" and some of the listings are redundant - BUT - under Article 2.11, (f) it states: "All costs and expenses assessed against the Association pursuant to the Ground Lease; provided, however, that neither the Association nor the Owners are liable for payment of any rent under the Ground Lease, all rent due thereunder having already been paid by DVD to the lessor." (So, it appears that owners would not be charged any rent for the ground lease - and that has never been a line item in our annual fees.) If this is meant to cover "rent" of the Ground Lease extension, then NO, it should not have any fees included.

I can't find any specific definition or comment about a "Special Assessment" so I have no concept of the legality of that and whether there are any specific limitations. My own understanding is that the section quoted above (2.11(f)) would allow an assessment for the Ground Lease extension and that owners could be held liable for same. The extended Ground Lease will clearly affect all current contracts equally - the only difference is whether individuals choose to accept and pay for it. I'll leave the legal interpretation to attorneys to explain, but I don't really see any contraindications to the extension as outlined so far.

Dean, would the members have to get lawyers to challenge DVD on this? Obviously they feel they are within their rights to do this. How do we challenge it?

Yes, owners would need legal assistance to challenge this in court - depending on how far you would want to pursue it. I would ask how any single member (or group of owners) would be harmed though - since it appears that there is a method for individuals to opt out (I fully expect that all costs of any deed assignment will be borne by DVD) and each owner has the option to accept the extension for a fee or decline by assigning the additional years to DVD. Again, I'll defer a legal interpretation to those more versed than I.

However, as with all things Disney, it can't hurt to write to DVD and express your own praise/concerns/complaints with the program and if that's what you meant by needing a lawyer - then no, as we all have the ability to contact DVD. DVD has no responsibility to maintain any resale value (IMO, they have already accomplished that with ROFR) so using possible decline in resale value probably as an issue will likely fall on deaf ears.

There has been speculation on this forum for years about what happens in 2042. We now have at least a partial answer and have a personal decision to make regarding the current status.

Perhaps we all need to be careful what we wish for - we just might get it!

 

[BuzzDaddy]

I, too, appreciate all the varying opinions and viewpoints on this topic, but my concern is simply limited to what will happen if I choose NOT to extend. DVD likley already has a secondary offer prepared in the event that many/most opt NOT to extend on this first offer. Obviously, this is the test case for future extensions for DVD too, so I am sure they are eagerly awaiting the responses to see how to do this in the future.

I agree that we deserve a current benefit, like park hoppers or dining plans for quite a few years, IF we have to shell out the cash now. When I read the letter, though, I got a sense of unfinished business as if there will be many more details coming in the next letter and that there MAY be an offer of financing to soften the impact. I am expecting some sort of an annual surcharge - say, $1 per point for the next 15 years - payable with the annual dues.

I purchased my contract at around $60 per point, so the extra $15 puts me at $75. If I sell now at around $75-80, then the additional $15 allows me to buy a $90-95 resale at another resort to get the extension. But then, what did I (or DVD for that matter) gain or lose. I am still going to go back every year. I will still stay at OKW sometimes, but not always. Same as now. All I did was shuffle money around and waste some time.

Disney management is far from dumb. They have to know this and had to know it BEFORE they sent that letter. The questions are, what are they prepared to do FOR us NOW if we go along for the ride and what are they going to do TO us later if we do NOT?

 

[ralphd]

Place to ask your question:

' http://www.myflorida.com/dbpr/lsc/timeshare.html '

Florida Statute 721:

' http://www.flsenate.gov/Statutes/in...tm&StatuteYear=2003&Title=->2003->Chapter 721 '

Seems like there are references here also:

' http://www.ccfj.net/condo718statutes.html '

 

[Dean]

I can't find any specific definition or comment about a "Special Assessment" so I have no concept of the legality of that and whether there are any specific limitations. My own understanding is that the section quoted above (2.11(f)) would allow an assessment for the Ground Lease extension and that owners could be held liable for same. The extended Ground Lease will clearly affect all current contracts equally - the only difference is whether individuals choose to accept and pay for it. I'll leave the legal interpretation to attorneys to explain, but I don't really see any contraindications to the extension as outlined so far.

The POS and/or statutes will have to have wording that allows it rather than having to specifically prevent it. That's how these legal passages work. You have to find something that you can reasonably argue says it's OK to do this.

 

[WebmasterDoc]

The POS and/or statutes will have to have wording that allows it rather than having to specifically prevent it. That's how these legal passages work. You have to find something that you can reasonably argue says it's OK to do this.

Yeah, that's why I included the bolded quote that specifically stated that members are required to pay for "all costs and expenses assessed against the Association pursuant to the Ground Lease." To me that suggest a reasonable argument that it's OK to do this - but I'm not an attorney.

As I already mentioned, I'll leave the legal interpretation to those trained to do so. While the POS language appears to allow the extension in my mind, others will need to make their own decision about whether to challenge the proceedings. I've already decided against accepting the extension, so unless I'm required to pay for any associated costs, I don't see that I'm harmed in any way. I will feel very differently if I'm forced to assume any costs for declining the extension.

 

[LIFERBABE]

What makes this any different than buying DVC in the first place? DVC sets the terms -- you buy or you do not buy. This is the same thing.

We do have an indirect input...if few people buy the option then they will need to adjust. I find it interesting that people get all worked up over this, but never bat an eye at buying into AKV for a fifty year term.

I think this is different than buying AKV for 50 years. If you purchase AKV right now, you get incentives and you get points to use and benefit for every year for the next 50 years.

If you pay money now to extend, you get nothing for 35 years and then you get to pay amortized dues for the next 15 and the majority of us will not be riding Rock N Roller Coaster in 35 years and neither will my immediate offspring.

 

[Dean]

Yeah, that's why I included the bolded quote that specifically stated that members are required to pay for "all costs and expenses assessed against the Association pursuant to the Ground Lease." To me that suggest a reasonable argument that it's OK to do this - but I'm not an attorney.

As I already mentioned, I'll leave the legal interpretation to those trained to do so. While the POS language appears to allow the extension in my mind, others will need to make their own decision about whether to challenge the proceedings. I've already decided against accepting the extension, so unless I'm required to pay for any associated costs, I don't see that I'm harmed in any way. I will feel very differently if I'm forced to assume any costs for declining the extension.

I don't read this as allowing an extension. This should be quite interesting over the next few months.

 

[theostwalts]

I think this is different than buying AKV for 50 years. If you purchase AKV right now, you get incentives and you get points to use and benefit for every year for the next 50 years.

If you pay money now to extend, you get nothing for 35 years and then you get to pay amortized dues for the next 15 and the majority of us will not be riding Rock N Roller Coaster in 35 years and neither will my immediate offspring.

That is kind of what I was thinking in my previous post. It may not make sense for a current owner, but what if DVC started exercising its ROFR on more resale contracts. They could recoup those points at $70-$85 dollars and then resale them with the additional time attached. They could then market several resorts at a 50+ time line.

 

[JimC]

I think this is different than buying AKV for 50 years. If you purchase AKV right now, you get incentives and you get points to use and benefit for every year for the next 50 years.

If you pay money now to extend, you get nothing for 35 years and then you get to pay amortized dues for the next 15 and the majority of us will not be riding Rock N Roller Coaster in 35 years and neither will my immediate offspring.

There may very well be an incentive of $10 per point on the extension. If I extend I get a contract extension. So I do get something of value. The question is whether the consideration is appropriate for the value acquired.

But my point you quoted in your post was actually a shortened version of what I had in another post in another thread (I believe). There I expressed that offering to sell another 15 years now is not much different then buying AKV. I can buy AKV for a 50 year term or I can extend my OKW contract to the same termination date. In both I am prepaying for future vacation expenses. In both those expenses cover a term extending 50 years. The differences are 1) that I already paid for the next 35 years at OKW, so I now only need to pay for the outer 15 years; and, 2) the cost of those points at $15 would be a $1 per point per year while AKV is selling for $1.94 per point per year.

 

[pilferk]

I, too, appreciate all the varying opinions and viewpoints on this topic, but my concern is simply limited to what will happen if I choose NOT to extend. DVD likley already has a secondary offer prepared in the event that many/most opt NOT to extend on this first offer. Obviously, this is the test case for future extensions for DVD too, so I am sure they are eagerly awaiting the responses to see how to do this in the future.

I agree that we deserve a current benefit, like park hoppers or dining plans for quite a few years, IF we have to shell out the cash now. When I read the letter, though, I got a sense of unfinished business as if there will be many more details coming in the next letter and that there MAY be an offer of financing to soften the impact. I am expecting some sort of an annual surcharge - say, $1 per point for the next 15 years - payable with the annual dues.

I purchased my contract at around $60 per point, so the extra $15 puts me at $75. If I sell now at around $75-80, then the additional $15 allows me to buy a $90-95 resale at another resort to get the extension. But then, what did I (or DVD for that matter) gain or lose. I am still going to go back every year. I will still stay at OKW sometimes, but not always. Same as now. All I did was shuffle money around and waste some time.

Disney management is far from dumb. They have to know this and had to know it BEFORE they sent that letter. The questions are, what are they prepared to do FOR us NOW if we go along for the ride and what are they going to do TO us later if we do NOT?

I think the ultimate question here is: What's Disney's primary intent.

Is it:

a) To get current owners to buy the extension, and maximize profit from that

or

b) To allow DISNEY to sell ROFR'd OKW points at a 2057 rate.

If a is their primary goal, you might see an additional offer made later to owners. By levying a lein on the deed, they DO have the option, down the line, of offering a greater subsidy to the $25 per point.

If b is their primary goal...they simply don't care how many owners opt in...and you'll likely NEVER see another offering again. The process is simply about allowing THEM to extend OKW contracts, and they HAVE to offer the option to owners at the same time.

 

[BostonDisneyKid]

Does anyone have an original copy of the letter they could scan and send me (or copy it and snailmail me) or post it somewhere online? I am an OKW owner and have not received this blackmail, I mean offer, letter as of yet and am fairly concerned. Thanks in advance...

 

[jade1]

We could use more points now rather than later. As our family has grown (I'm sure there are many) we are seeing a need for larger accomodations like 2BR over 1BR. If we did own at OKW, the add on would be about that same cost as the extension to make this change (other than the obvious dues). Currently we would rather have 35 more years in a 2BR than 50 in a 1BR. 200 dream season points for a week in 1BR at $25 would be $5,000, the extra 67 points to stay in a 2BR at $75 resale is $4,700.

 

[BostonDisneyKid]

I am all set with the previous request to receive copy of said documentation.

Thanks JimC !!!

 

[theostwalts]

I think the ultimate question here is: What's Disney's primary intent.

Is it:

a) To get current owners to buy the extension, and maximize profit from that

or

b) To allow DISNEY to sell ROFR'd OKW points at a 2057 rate.

If a is their primary goal, you might see an additional offer made later to owners. By levying a lein on the deed, they DO have the option, down the line, of offering a greater subsidy to the $25 per point.

If b is their primary goal...they simply don't care how many owners opt in...and you'll likely NEVER see another offering again. The process is simply about allowing THEM to extend OKW contracts, and they HAVE to offer the option to owners at the same time.

Exactly. And if B is their intent, it may very well extent to other resorts at some point. If the construction at the CR is not DVC, they could extent VWL and have villas on hand in the MK area that have a 2057 lifespan.

 

[trainfun]

We won't be extending as our kids will be 55 and 58 in 2042.

There are several questions this poses and a big additional benefit.

The first question is what will the dues have to rise to to maintain an aging resort in those last 15 years? The dues increases alone could wipe out any gain in resale value. Dues have steadily risen as the resorts have aged and it looks like the trend will continue. In a few years we will probably start to see really expensive repairs like new roofs. In the original offering statement there were projected lifetimes for major components of the resort and we are starting to close in on some of them.

Second, as has been pointed out, there is no current value for the current expense (whether $15 or $25/point) of extending. Why not invest the money you would use for the extension now, then wait until 2042, let your points expire and then replace them with more points which have only 15 years left on them and would therefore be available at a comparatively low price? Then you could make the decision to extend in 2042 based on the prevailing conditions at that time. That could remove a lot of the risk in trying to project what will occur in 35 years from now.

The big additional benefit I see is that by extending at OKW, you also gain 7 month advance reservation access to all the other resorts for the additional 15 years. If you have points at multiple resorts, as many folks do, you could "scale back" as you age, extending your OKW points, but leaving the other resorts at their 2042 expiration while maintaining access to all resorts, albeit with fewer points.

In todays corporate world with takeovers, buyouts, etc., it is quite a leap of faith to extend to 2057 and assume all will remain the same with DVC. A takeover of DVC could quickly and drastically alter the resale value of our points. That is one reason that it is wise to look at DVC as prepaid vacations, not as an investment.

On balance, the risks of extension outweigh the rewards for our family. For a much younger family things might be different.

 

[BostonDisneyKid]

I know others have asked and some have speculated as to the answer but does anyone know for sure (presumably a lawyer), "what will occur if you opt to do nothing"? - meaning if you opt not to extend the contract and opt not to "...pay the special assessment by executing a deed (with the formalities required by Florida law) conveying to DVD their Ownership interest for the period from January 31, 20042 to January 31, 2057"

And my second question - How can I legally "satisfy my legal obligations to pay an assessment fee by executing a deed conveying to DVD my ownership interests from Jan 2042 - 2057" without having ownership interests during this time period? My original contract states ownerhsip expires on Jan 28, 2042. How can one legally, "convey ownership interests" for something which they do not own?
After presenting these question to and speaking this morning with MS (2 reps, 2 supervisors and 2 managers) and then my sales rep it seems as though no one can answer these questions with any certainty. They all seem to be under the impression that my original contract that states "Ownership interests through January 28, 2042" is what I am obligated to financially and legally - no more, no less. My sales guide suggested I do nothing (which is what he would do) and stated if I felt uncomfortable with that answer, to contact my personal lawyer for advisement.

Are there any lawyers on here who can answer these questions?

...and in case anyone is wondering, I was informed that I could attend the meeting but could not vote as DVD will vote on my behalf with a vote of approval, regardless of my opinion and/or approval or not - Thanks DVD !!!

 

[pilferk]

I know others have asked and some have speculated as to the answer but does anyone know for sure (presumably a lawyer), "what will occur if you opt to do nothing"? - meaning if you opt not to extend the contract and opt not to "...pay the special assessment by executing a deed (with the formalities required by Florida law) conveying to DVD their Ownership interest for the period from January 31, 20042 to January 31, 2057"

And my second question - How can I legally "satisfy my legal obligations to pay an assessment fee by executing a deed conveying to DVD my ownership interests from Jan 2042 - 2057" without having ownership interests during this time period? My original contract states ownerhsip expires on Jan 28, 2042. How can one legally, "convey ownership interests" for something which they do not own?
After presenting these question to and speaking this morning with MS (2 reps, 2 supervisors and 2 managers) and then my sales rep it seems as though no one can answer these questions with any certainty. They all seem to be under the impression that my original contract that states "Ownership interests through January 28, 2042" is what I am obligated to financially and legally - no more, no less. My sales guide suggested I do nothing (which is what he would do) and stated if I felt uncomfortable with that answer, to contact my personal lawyer for advisement.

Are there any lawyers on here who can answer these questions?

...and in case anyone is wondering, I was informed that I could attend the meeting but could not vote as DVD will vote on my behalf with a vote of approval, regardless of my opinion and/or approval or not - Thanks DVD !!!

I'm not a lawyer, so take my opinion for what it's worth:

a) From the letters we've seen, and what people seem to have gleaned from them is that if you do NOTHING, Disney will levy a lein against the deed. For how much...I'd assume $25 per point plus the cost of placing the lein. You can't sell without satisfying that lein and there IS some language in the POS that indicates they could stop you from using your points as long as the lein exists...but nobody is sure they would.

b) The vote is to AUTOMATICALLY extend your contract, via extension of the ground lease. Dean and Doc are doing a good job of debating whether doing that, and then charging membership for the cost, is a viable legal practice. I don't know. But THAT answers you question on how you can deed the "extra years" to DVD....you get them as soon as the vote passes. They won't let you use them unless you pay your piece of the assessment covering the cost of the extension.

c) On the "not being allowed to vote personally" thing...well, that's what's provided for in the documention provided to you, and accepted by you, when you bought into DVC. Keep in mind, I'm not being snarky here. Just letting you know how they can do it. You gave them the right to vote on your behalf, via proxy membership rep.

 

[BostonDisneyKid]

- I was well aware of the DVD's ability to vote for me and didnt take your comment as "snarly". Just a bit annoyed that they invited me to attend.

- Although Dean and Doc are both very intelligent (apparent from posts), I will wait for advisement as to the legality and liability matters from my own laywer and/or should any lawyers offer statement

 

[LIFERBABE]

We could use more points now rather than later. As our family has grown (I'm sure there are many) we are seeing a need for larger accomodations like 2BR over 1BR. If we did own at OKW, the add on would be about that same cost as the extension to make this change (other than the obvious dues). Currently we would rather have 35 more years in a 2BR than 50 in a 1BR. 200 dream season points for a week in 1BR at $25 would be $5,000, the extra 67 points to stay in a 2BR at $75 resale is $4,700.

Good point Jade, I would rather have larger accomodations now than in 35 years too. I guess my point is, Im not worried about resale, because just like the real estate market, when its good you sell when its bad you rent. So if the market is bad because I didnt extend, then I will rent.

I'd much rather benefit from my investment today then wait 35 years. It's kind of like buying a companies debt coupons. You give them $25 today and they will pay you back in 35 years.