Mailing on the OKW Extension

[PamOKW]

Not sure if this already posted elsewhere -- in today's mail was a letter describing the upcoming plans to extend OKW contracts by 15 years at a Sept. 24 meeting. They are calling the cost of extending a "special assessment". If you opt not to extend, we'll be required to sign documents deeding the last 15 years of the contract to DVD. In essence, they are extending all the contracts, charging an assessment to do so, and offering a way to "opt out".

As much as I'd like to think I'll be rocking and rolling at WDW in my nineties, I'm thinking this extension may not make sense to me except as a hedge for resale.

Was kind of nice to get my mailing "on time" -- I'm usually the last to get anything!

 

[OneMoreTry]

I got it but didn't get to the opting out requirement. The "requirement" to sign is an interesting twist.

I think I'll not buy, not sign and see what happens.

 

[Debbie H]

We got ours today too. I think we will not sign, not buy, and see what happens. I'll be 90 and dh 93 so it makes no sense for us!

 

[dianeschlicht]

If you don't sign, you will be assessed anyway, so it is best to sign the last 15 over to DVC.

 

[JABEAR]

They are extending all of the OKW contracts by 15 years? What is the cost? Why or why not sign?

 

[dvc at last !]

subscribing..........................................

 

[tjkraz]

If you don't sign, you will be assessed anyway, so it is best to sign the last 15 over to DVC.

I agree. As soon as the board approves the contract extension and assessment, all owners are subject to it.

Effectively DVC is imposing a mandatory $25 per point assessment on ALL OKW owners, and then offering to BUY BACK the 2043-2057 points for $25 each. Failure to respond by 2/29/08 will lead to the assessment being billed. Don't pay and they can freeze your account. And given the money involved, they may be inclined to push for payment rather than accepting "oops, I forgot to respond."

For those who have no desire to extend, it seems like you're just creating additional work by failing to respond within the given timeframe.

 

[tomchris]

Received our letter today. I will be 113 years old at the end of the extension. I will probably extend if I can find someone to push my wheelchair.

 

[bub]

Call me negative or cynical...I'm often a bit of both.
To me, this extension deal sounds like a neat trick for Disney to get a large infusion of cash out of those of us smart enough to buy into the Vacation Club early on. If this works well, they will probably do this with the other properties (BWV and VWL) that have earlier ending dates.
I can see the value for resales, but as that is not a priority for me, I doubt I will do this extension. I'm glad we have until February to make a decision, as I want to read other points of view and discuss it with my family before making a final decision.

 

[PamOKW]

I agree that the real benefit goes to DVC. I don't think it's so much the cash that they are after. What they want to do is change the end date so that they have a more attractive product to sell on the resale market. Right now they have such a variety of price points and end dates that it's confusing to market. If they bring all the original DVC resorts back into the same ballpark end date, problem solved.

It seems that legally the only way they can accomplish a change is to change all the deeds. They then offer to "buy" the final 15 years. If we had any real voting power, we could prevent the change from happening. As it is now, DVC can pretty much do as they please as long as they don't bring bad pr on themselves. I don't think this change is unreasonable and there are some younger owners who will probably jump at the chance.

Some people have also expressed concern that Disney might let the resorts decline in later years. I think this should put that concern to rest. Disney plans to keep our resorts up to snuff just like the rest of the Disney resorts.

 

[bub]

Yes, Pam I can see the point of trying to make sense out of the confusion of ending dates, especially to keep the resale value high (mostly for Disney's benefit but also for some here who might sell). And it's nice to know that there is now a reason for OKW to continue to be in good condition up to and past 2042. However, I think I'll invest my $2000 or so, and then, if I want to visit in 2043, I'll have enough to pay rack rate. [And maybe even finally get to stay at the Polynesian, without a lot of points and a $95 fee!]

 

[profdsny]

I agree. As soon as the board approves the contract extension and assessment, all owners are subject to it.

Effectively DVC is imposing a mandatory $25 per point assessment on ALL OKW owners, and then offering to BUY BACK the 2043-2057 points for $25 each. Failure to respond by 2/29/08 will lead to the assessment being billed. Don't pay and they can freeze your account. And given the money involved, they may be inclined to push for payment rather than accepting "oops, I forgot to respond."

For those who have no desire to extend, it seems like you're just creating additional work by failing to respond within the given timeframe.

I'm not sure I got, or understand, the Buy Back. What is that?

 

[PamOKW]

I'm not sure I got, or understand, the Buy Back. What is that?

Once the contract extension is approved, every owner at OKW will receive a "special assessment" of $25.00 per point. It states this will be a personal obligation of each member and a lien will be placed on Ownership Interest to secure payment.

A "further resolved" is that those who desire not to extend the Ownership interest beyond 2042 may satisfy their obligation to pay the special assessment by executing a deed (with formalities of FL Law.........) conveying to DVC the ownership interest for the period from January 31, 2042 to January 31,2057.

Someone posted info that they may offer a special $15 rate vs. the $25 for a period of time.

Basically, after the meeting we will all owe $25 per point. Our choice whether to pay or hand back the deed.

The worst part of this......they are making me feel very old

 

[WDWorld2003]

How will this work on the resale market if you want to sell your contract. Will the new buyer be assessed this $25.00 fee if you did not pay it?

 

[PamOKW]

I'm assuming DVC will set a deadline when we need to decide whether to sign the legal papers giving them back the 15 years or commit to owing $25 per point. (The paper with the documents says the special assesment will be due and payble no later than 2/29/2008). If you haven't signed the papers and want to sell, the seller will have to settle up any outstanding debts with DVC, just like you would have to pay any outstanding dues owed. DVC will have a lien on the property preventing sale until the $25 per point is paid.

The resale market will need to pay attention as to whether they are buying a contract ending in 2042 or 2057 and the possible cost difference they'll pay for the extra years.

I wonder what effect it will have on buyers. I could reasonably sell my 230 point contract for anything above my buy-in of $64 per point. If I add on, will people be willing to pay $89 vs. $64 to get 15 more years? Even a 30 year old will be 80 in 2057.

 

[Uncleromulus]

A "personal obligation" eh??
That's a lot of $$--thousands of dollars in many cases. Assuming that some people do take them up on this "offer" (and I won't, since I'll be 98 in 2042) I wonder how they expect those folks to pay, who may not have that kind of $$ just lying around the house??

 

[JimMIA]

This is one of those little quirks which probably won't affect huge numbers of people, but even saying "no thanks" is going to cost us some money. Our DVC is held in a trust account, so we'll have to get the three trustees to sign the deeding documents and then pay to have the signatures notarized...just to say "no" to something we never requested in the first place.

In our case, the notary fees aren't going to break the bank, but in some places overseas notary fees are quite high.

It's also going to create issues for jointly-held accounts where the owners (like brother and sister, parents and kid, etc) don't live in the same city.

And then there are the situations where the owners are separated or divorced and one party decides to be difficult.

I'm sure there is a reason why I have to deed something I don't even own to DVD, but this process they've dictated is going to create some headaches for many owners.

 

[BWV Dreamin]

This is one of those little quirks which probably won't affect huge numbers of people, but even saying "no thanks" is going to cost us some money. Our DVC is held in a trust account, so we'll have to get the three trustees to sign the deeding documents and then pay to have the signatures notarized...just to say "no" to something we never requested in the first place.

In our case, the notary fees aren't going to break the bank, but in some places overseas notary fees are quite high.

It's also going to create issues for jointly-held accounts where the owners (like brother and sister, parents and kid, etc) don't live in the same city.

And then there are the situations where the owners are separated or divorced and one party decides to be difficult.

I'm sure there is a reason why I have to deed something I don't even own to DVD, but this process they've dictated is going to create some headaches for many owners.

See, this is a perfect example of how we do not have all the facts to make a sound decision about this. How many more " hidden" fees may there be? But yet owners have to make this financial decision within 6 mos. Isn't there a fudiciary responsibility on Disney to come forth with all of the information/ramifications?

 

[G8RFAN]

I find this intriguing. While I have hypothesized that they would offer some sort of "extension" or "renewal", it has clearly come much sooner than I anticipated. I say this because the expiration or termination of the contract has not played a very large component of the resale value as of yet. This will definitely awaken that component to the resale market, because it will force a price distinction between those that have elected to extend versus not by exactly $25 per point. The value of those extended OKW points will have to compete with SSR and AKV and other future projects. I wonder also how this will impact the other original maturity resorts.

 

[mjy]

I know this is off-topic, sorry about that, however, isn't it amazing that Disney apparently can move so fast to require us to expend huge sums of money but they cannot even post the point charts for the Disney collection for 2008 and it is nearly September of 2007?!