Disney Vacation Development is loaning a total of $750,000 to the Hilton Head Island Condominium Assocation to help cover insurance deductibles from storm damage. The loan is for a period of 4 years. Over that span, interest will accrue at a modest rate of 1.33% per year componunded monthly. The total charge billed to 2017 dues for repayment of this loan is $.1133 per point or $155,126 total.
The full text of the budget note is as follows:
DVD has made a loan to the Association to fund repairs related to Hurricane Matthew in the amount of $750,000, which is the estimated amount not covered under its insurance policy due to the deductible. This loan will accrue interest at 1.33% per year compounded monthly and will be repaid by the Association in monthly installments over the next ve years beginning January 1, 2017. The Association will make approximately $155,126 in payments on this loan in 2017.
Timeshares reserve the right to issue special assessments to owners to cover unexpected charges of this nature. Disney Vacation Development's willingness to back a low-interest loan, allowing owners to pay off the obligation over the course of several years, is somewhat unique. It would have been within Disney's rights to charge the full $750,000 to owners in 2017, a move which would have cost owners around $.75 per point during the coming year.