NEWS: New OKW Info for Non-Extenders

[DVC92]

Responding to a complaint with the Florida Timeshare Bureau relating to the extension of OKW to 2057, DVD has agreed to provide a developer subsidy to all members who elect to not participate in the extension. The Executive Counsel for WDW, John McGowan stated:
"....we agree that members who elect not to extend should not be required to fund capital repairs after 2042. However, Section 721.13
(3)(c)(3), F.S., provides that full funding of reserves can only be waived by a majority of the members. Consequently, as part of the OKW Extension, DVD, as developer, has already agreed with the association to provide a developer subsidy at the appropriate time (the association is obviously not yet funding capital reserves for capital replacements after 2042) to all members who elect not to participate in the OKW Extension. The purpose of the developer subsidy is to pay a portion of such member's capital reserve assessments in an amount sufficient to fully fund capital reserves and to relieve all such members of the obligations to fund capital replacements after 2042. Thus, DVD has committed to the association that neither.....nor any other members who elect not to extend will pay any reserve assessments for capital improvements made after 2042."

On another note, in the response to the complaint, it was stated that as of February 29, 2008, more than 30% of the members had accepted the extension.

[NYDVC]

so is 30% suscess or failure. Seems a little low to me. but certainly a good chunk of change in DVC pocket.

[Daitcher]

On another note, in the response to the complaint, it was stated that as of February 29, 2008, more than 30% of the members had accepted the extension.



They could never prove those numbers. I'd stake my life on it that they have nowhere near that number. That may be their goal but no way in he double hockey sticks that 30% have extended now.

While I realize that message boards are not a great represenatation of the membership as a whole I do believe they have some merit. I read several large DVC message boards and the OVERWHELMING response has been to not extend. 30%........ yeah right. I've only seen a handful of extenders. I've aslo had contact with my guide and I asked point blank how the OKW extension was going.... after his chuckle he said it is going. I got the impression that it was less than ideal. DVC is blowing smoke to make it seem like this is accepted by the membership.

As for the rest of it, finally DVC is admitting what they planned to do was both illegal and wrong. They had no plans to subsidize anything. They planned to milk the non extenders to fund reapirs on a 50 year old OKW Resort. I'm glad to see folks called their bluff on this.


DAVE

[OttawaWendy]

If I understand the content of the original post (and I'm not sure I do), this isn't a boon for non-extenders.

I think what they are acknowledging is this:

- right now, our maintenance fees include not only the direct costs for upkeep and repairs for 2008, but also the development of capital reserves for use in outlying years (say they anticipate reroofing in 2010 and that's the next big project). This process allows spreading out maintenance fees relatively equally between years, instead of having members absorb a big hit in a year where an especially expensive project was anticipated
- if there were no extensions and it was 2040 or 2041, maintenance fees would be only what would be needed to support the facility to 2042. So the fees would actually be lower because they couldn't legally have a capital fund for maintenance in outlying years
- but there will be some who have extensions and some who don't, but they can't have different maintenance fees
- so the maintenance fees in 2040 and 2041 will be actually higher than they would have been with no extensions (because they will be funding beyond 2042)
- the difference between what the maintenance fees will be with the extensions and what they should have been with no extension (which theoretically is the funding of capital costs beyond 2042) will be given back to non-extending owners through developers points

Now let me say that I'm not sure about that. It is my best guess from reading what was posted, but I have no other information, and real estate law isn't my field (I am a lawyer, but I don't play one on the internet, and I do completely different work).

If my assessment is true, and I owned non-extended OKW points (I don't), my response would be:

1. I don't want developers points in exchange for my cold hard cash in maintenance fees. I either have to take more vacations than I otherwise would have wanted, or I have to rent my points, consuming my time (at that assumes there's still a rental market).

2. How will anyone ever be able to truly confirm that the allocations between current year maintenance and capital reserves are accurate? If they can't, we might still be overpaying. What will they do if the money they put aside for repairs and maintenance in 2041 doesn't all get used? How can we prevent them from scheduling an expensive repair in 2041?

There are probably legal answers to this, but my overall assessment is, this is going to be complicated.

[Daitcher]

If I understand the content of the original post (and I'm not sure I do), this isn't a boon for non-extenders.

I think what they are acknowledging is this:

- right now, our maintenance fees include not only the direct costs for upkeep and repairs for 2008, but also the development of capital reserves for use in outlying years (say they anticipate reroofing in 2010 and that's the next big project). This process allows spreading out maintenance fees relatively equally between years, instead of having members absorb a big hit in a year where an especially expensive project was anticipated
- if there were no extensions and it was 2040 or 2041, maintenance fees would be only what would be needed to support the facility to 2042. So the fees would actually be lower because they couldn't legally have a capital fund for maintenance in outlying years
- but there will be some who have extensions and some who don't, but they can't have different maintenance fees
- so the maintenance fees in 2040 and 2041 will be actually higher than they would have been with no extensions (because they will be funding beyond 2042)
- the difference between what the maintenance fees will be with the extensions and what they should have been with no extension (which theoretically is the funding of capital costs beyond 2042) will be given back to non-extending owners through developers points

Now let me say that I'm not sure about that. It is my best guess from reading what was posted, but I have no other information, and real estate law isn't my field (I am a lawyer, but I don't play one on the internet, and I do completely different work).

If my assessment is true, and I owned non-extended OKW points (I don't), my response would be:

1. I don't want developers points in exchange for my cold hard cash in maintenance fees. I either have to take more vacations than I otherwise would have wanted, or I have to rent my points, consuming my time (at that assumes there's still a rental market).

2. How will anyone ever be able to truly confirm that the allocations between current year maintenance and capital reserves are accurate? If they can't, we might still be overpaying. What will they do if the money they put aside for repairs and maintenance in 2041 doesn't all get used? How can we prevent them from scheduling an expensive repair in 2041?

There are probably legal answers to this, but my overall assessment is, this is going to be complicated.




I think you are misreading it.

There are no developers points involved. What we are talking about is a subsidy. So those with unextended contracts WILL have lower dues in the end years than those that extend. The subsidies will be applied to cover the difference for the non - extenders. (unless I'm reading this wrong)

This is how it should have been done from the beginning. This question was asked directly by WMD at a condo meeting. He was told no that they had no plans to subsidize dues near the end term. It wasn't until they were FORCED into this that DVC did what was right AND legal.




DAVE

[OttawaWendy]

OK, I see what you are saying. So that eliminates my first concern (what would I do with developers points?) but it doesn't eliminate all my other concerns (about how this can possibly be managed to be fair to extenders and non-extenders:

2. How will anyone ever be able to truly confirm that the allocations between current year maintenance and capital reserves are accurate? If they can't, we might still be overpaying. What will they do if the money they put aside for repairs and maintenance in 2041 doesn't all get used? How can we prevent them from scheduling an expensive repair in 2041?

[Blue&Gold]

OK, I see what you are saying. So that eliminates my first concern (what would I do with developers points?) but it doesn't eliminate all my other concerns (about how this can possibly be managed to be fair to extenders and non-extenders:

Given the amount of contol we grant DVD and DVC Management in our contracts/Deeds (not a lawyer :ang2:) I don't believe OKW 42 owners will ever be sure. Which, in and of itself, becomes either motivation to extend the contract OR sell.

Dave---I know you are throwing the BS flag on the 30% statement, but if that is something Disney included in a legal filing, it had better be truthful---because if the court finds it salient to the ultimate disposition of the claim, the full records could easily be opened to examination by the Court.

[Daitcher]

Given the amount of contol we grant DVD and DVC Management in our contracts/Deeds (not a lawyer :ang2:) I don't believe OKW 42 owners will ever be sure. Which, in and of itself, becomes either motivation to extend the contract OR sell.

Dave---I know you are throwing the BS flag on the 30% statement, but if that is something Disney included in a legal filing, it had better be truthful---because if the court finds it salient to the ultimate disposition of the claim, the full records could easily be opened to examination by the Court.


First paragraph ITA.

Second paragraph: I'm not sure based on the wording of the OP that the 30% claim by DVC was included in any legal filings. It sounded to me (and I could be wrong) that DVC was using that statement as somewhat of a justification for not subsidizing those dues on their own. It was almost as if they put that out there for a PR spin.

Spin or no spin, legally is doesn't matter. It doesn't matter if 80% extended. Those not extending should not be liable for any reserves after their contract expires.

OP, any idea if this was included in the legal files? Where did that info come from?



DAVE

[Blue&Gold]

Spin or no spin, legally is doesn't matter. It doesn't matter if 80% extended. Those not extending should not be liable for any reserves after their contract expires.

My turn to say ITA.

For me, the only reason to extend---other than the somewhat unreasonable hope that I'm still vacationing at WDW when I'm 89---would be to support the resale value of the points. I know... Lots has been written about the spurious nature of that idea.

For my wife and I, the decision point will come if they extend the offer to the other resorts. We have 570 BWV points in blocks of 350, 100, and 2 x 60. The 100 and 60s I'm confident we can move at nearly any time... It would be the 350 that I think would be problematic.

For now, we're going to watch and see how OKW fares.

[DVC92]

OP, any idea if this was included in the legal files? Where did that info come from?

DAVE

The 30% figure was included in the written response by Disney to the Timeshare Bureau to illustrate a positive response by members of the extension offer. It was simply a statement being put forth to justify the propriety of the Board's vote to extend the termination date.

[sandeekath]

Did I just hear that the price now is $25 a point? Thanks. Katheirne

[OKWDad]

Most responders on this issue have obviously done some serious research and homework. As 10+ year DVC member with all our points at OKW, we found the offer somewhat appealing........but not compelling enough to invest today's dollars (however weak they may be) in an ownership extension that will yield no benefits whatsoever for 34 years. Put those funds in the right investment for 34 years, and your kids will probably be able to purchase all the OKW points they want!
Regards,
OKWDad