OKW Extension Papers & Lockout Mentioned

[hockeydad21]

All owners contracts were extended 2057 and all owners were told they owe the special assessment to pay for the change the association approved.

However, if someone could satisfy what they owed by signing the quit claim deed

So, the way I see things, after doing more reading from back then is that owners probably do not have the right to get it for free.

But, I do think they still have the right to pay for it if they didn’t give away the right to the extension

Now, DVC can refuse the payment and force owners to court to enforce the contract, and allow them to still pay

I just am not sure if they would since allowing people to pay the special assessment gives them money for that.

If they lock someone out and people are willing to settle dues and the fee, it doesn’t seem they would blatantly say no, especially if the number of contracts out there that fit into this situation is small.

that's hard to even believe DVC would make a move like that on the owners. Glad to see it was likely a one time bad decision.

 

[Bearval]

All owners contracts were extended 2057 and all owners were told they owe the special assessment to pay for the change the association approved.

However, if someone could satisfy what they owed by signing the quit claim deed

So, the way I see things, after doing more reading from back then is that owners probably do not have the right to get it for free.

But, I do think they still have the right to pay for it if they didn’t give away the right to the extension

Now, DVC can refuse the payment and force owners to court to enforce the contract, and allow them to still pay

I just am not sure if they would since allowing people to pay the special assessment gives them money for that.

If they lock someone out and people are willing to settle dues and the fee, it doesn’t seem they would blatantly say no, especially if the number of contracts out there that fit into this situation is small.

One thing you can count on is that Disney will ultimately do what will be the most beneficial to them. If DVD feels having owners pay the fee and let them use the extension is in their best interest then that is what they will do. If they feel locking people out in 2043 is best and more profitable even if they have to pay "damages" then that is what will happen. In either case they definitely are not going to allow people to have those extra 15 years for "free" and I believe the courts will also side with DVD since valid contracts have to have "consideration".

 

[Sandisw]

One thing you can count on is that Disney will ultimately do what will be the most beneficial to them. If DVD feels having owners pay the fee and let them use the extension is in their best interest then that is what they will do. If they feel locking people out in 2043 is best and more profitable even if they have to pay "damages" then that is what will happen. In either case they definitely are not going to allow people to have those extra 15 years for "free" and I believe the courts will also side with DVD since valid contracts have to have "consideration".

I agree that they will do what is best for them but if the owners still own the contract, and are locked out for no reason, you’d have to think damages would be high if they tried to book additional rooms

After reviewing the info again, I have amended my thinking that getting it for free doesn’t match the actual resolution passed by the association. So, owners do have to pay to use the extension soon.

But, it would be interesting to se if anyone tries to get DVC to allow them to pay the fee owed now…if I had one I would be trying that for sure!

 

[TheDailyMoo]

Isn't it also possible that DVC would realize that there are very few contracts that fall into that no man's land of not paying and not signing quit claim that they would eat the $25 they were never paid some 34 years prior and just be happy that those owners are paying full dues which by then will be probably 15-20 bucks a point anyway!

Kind of like creditors who are happy to collect pennies on the dollar just to get any juice out of a dry lemon

 

[NY Pirate Princess]

Riddle me this....

The resort opened in 1991 and the extension happened in 2007, right? So was the extension offered to all original owners AND resale owners in 2007? I tried to uncover when the resale market started but I couldn't find anything.

 

[Dean]

Riddle me this....

The resort opened in 1991 and the extension happened in 2007, right? So was the extension offered to all original owners AND resale owners in 2007? I tried to uncover when the resale market started but I couldn't find anything.

Yes, all current owners had the option for $25 with a discount to $15 initially, still overpriced by about double IMO. I bought resale in 1994, by reports, the first arms length resale. I'm not sure when resale was a more viable option to the masses.

 

[chalee94]

The extension happened for all owners, and all owners were expected to pay for the special assessment of $25/pt.. So, the only way to satisfy the amount you owed for the extension, if you were not in the position to pay it, was to sign away your rights to it.

Except that in Dean's take, DVC never had the right in the first place to level a special assessment for this situation.

The contracts anticipated possible special assessments for storm damage and such, but not for an extension of the ground lease.

Again, I think there would only be a handful of owners affected as most went with the quit claim or the extension.

 

[chalee94]

If Disney "loses" the lawsuit which is not a given since they will most likely argue that they received no " consideration" from the owners who didn't opt for the extension.

You are kind of missing the point that Disney unilaterally extended the ground lease and then demanded that owners sign away their rights to that extension without compensation (barring the $30 credit intended to offset the costs involved in notarizing their quit claim).

 

[Dean]

Except that in Dean's take, DVC never had the right in the first place to level a special assessment for this situation.

The contracts anticipated possible special assessments for storm damage and such, but not for an extension of the ground lease.

Again, I think there would only be a handful of owners affected as most went with the quit claim or the extension.

Legally SA's are only allowed under certain situations and this is not one that I can see allowed under the POS components. They put themselves in this situation first by tying the contract to the land lease then again by implementing the extension. What they should have done had they want to do this right was to actually have a vote of the membership for the extension. I understand reasons they may not have but that would have been the way to do so. The other would have been to allow it to expire and then to extend. They could have also offered a modified extension that was essentially a RTU what was then owned by DVD. I doubt there will be many actually affected and I suspect they will have a push near the end to clear out those that might be holding out so as to avoid this mess. Disney is lawsuit averse for something there's a good chance they'll lose. I foresee some under the table negotiations.

 

[Sandisw]

Except that in Dean's take, DVC never had the right in the first place to level a special assessment for this situation.

The contracts anticipated possible special assessments for storm damage and such, but not for an extension of the ground lease.

Again, I think there would only be a handful of owners affected as most went with the quit claim or the extension.

I should have been more clear. I realize there is concern that the association who adopted the resolution…which are the same people…may not have had the legal authority to do it.

And someone would have to fight its legality. But, that aside, all owners own extended contracts. That is not in dispute when you look at that actual language.

So, the question is if someone is now willing to pay the assessment to have the extension, DVC may very well take it to avoid a legal mess if you are talking a small % it will apply to.

I just am not sure that they lock people out who offer to pay it and pay dues, knowing it could end up costing them money.

It’s not like they have a right to take ownership of what is deeded to someone else.

 

[CastAStone]

Yes, all current owners had the option for $25 with a discount to $15 initially, still overpriced by about double IMO. I bought resale in 1994, by reports, the first arms length resale. I'm not sure when resale was a more viable option to the masses.

It still blows my mind that in 2007 they asked owners who likely by then averaged late 40s to extend a contract that expired in their early 80s and extend it to last until their late 90s.

 

[Bearval]

It still blows my mind that in 2007 they asked owners who likely by then averaged late 40s to extend a contract that expired in their early 80s and extend it to last until their late 90s.

Exactly the reason why they will never do it again.

 

[Bearval]

You are kind of missing the point that Disney unilaterally extended the ground lease and then demanded that owners sign away their rights to that extension without compensation (barring the $30 credit intended to offset the costs involved in notarizing their quit claim).

No, I do think they will lose, I am just stating what i believe their defense will be.

 

[Bearval]

I agree that they will do what is best for them but if the owners still own the contract, and are locked out for no reason, you’d have to think damages would be high if they tried to book additional rooms

After reviewing the info again, I have amended my thinking that getting it for free doesn’t match the actual resolution passed by the association. So, owners do have to pay to use the extension soon.

But, it would be interesting to se if anyone tries to get DVC to allow them to pay the fee owed now…if I had one I would be trying that for sure!

Damages would be limited to what the value of the addition 15 years would be and since DVD will no longer be selling OKW direct it would have to be based on market rates which would be resale. So they most likely would settle at or close to what an OKW 2057 contract sells for per point in 2042. I any case that is still 18 years away and with each passing year as more of the 2042 contracts get sold and for that to happen they sign off on the quit claim documents reducing the number of unresolved contracts.

 

[skier_pete]

Yes, all current owners had the option for $25 with a discount to $15 initially, still overpriced by about double IMO. I bought resale in 1994, by reports, the first arms length resale. I'm not sure when resale was a more viable option to the masses.

I don't understand that. $15 for 15 additional years seems like a bargain today, and even in 2007, DVC was selling for around $100 a point or $2 / year versus the $1/ year for the extension. Certainly I understand why some owners wouldn't have done it because of their age in 2042 at the end of the contract, but to say it was overpriced I just don't see.

 

[Sandisw]

Damages would be limited to what the value of the addition 15 years would be and since DVD will no longer be selling OKW direct it would have to be based on market rates which would be resale. So they most likely would settle at or close to what an OKW 2057 contract sells for per point in 2042. I any case that is still 18 years away and with each passing year as more of the 2042 contracts get sold and for that to happen they sign off on the quit claim documents reducing the number of unresolved contracts.

Hypothetically, if they lock out an owner, wont take payment for the extension or dues to unlock it, without a win in court, but turn around and use those units for cash, and make income off of someone else’s ownership, wouldn’t they potentially be penalized for that too?

 

[Bearval]

Hypothetically, if they lock out an owner, wont take payment for the extension or dues to unlock it, without a win in court, but turn around and use those units for cash, and make income off of someone else’s ownership, wouldn’t they potentially be penalized for that too?

No, if they lose they would just pay on the value of the item and that would be how much those 15 years are worth. ( If you had a renter in your house not paying and was subleasing you would just get the back rent if you sue and win and not the money they made from subleasing, at least that is what happened to one of my employees who has rental properties). What will be interesting to see is how many of these unresolved 2042 contracts will be left in 18 years. There may not be enough for a law firm to accept for a class action lawsuit which would mean owners would have to hire their own lawyer and the cost of the lawyer most likely would exceed the value of the contract. I believe you had to buy 260 points at OKW at one time. If DVC loses and fights to use this number to base what the per point values will be. Right now with 18 years left there are contracts selling in the 60 range and there are even a few now "asking " for 60. So theoretically, that value will go down when there are only 15 years left. Disney will have made more than enough from the cash stays to pay out the lawsuits if they lose.

 

[Bearval]

I don't understand that. $15 for 15 additional years seems like a bargain today, and even in 2007, DVC was selling for around $100 a point or $2 / year versus the $1/ year for the extension. Certainly I understand why some owners wouldn't have done it because of their age in 2042 at the end of the contract, but to say it was overpriced I just don't see.

That must have been exactly what Disney was thinking when they made that offer. Problem was that the recession officially started in December 2007, however in reality recessions have already started 6 to 12 months before they are officially declared. People were already doing some belt tightening and couldn't justify spending money to extend a contact that would take it to where they were in their 80's and 90's.

 

[Sandisw]

No, if they lose they would just pay on the value of the item and that would be how much those 15 years are worth. ( If you had a renter in your house not paying and was subleasing you would just get the back rent if you sue and win and not the money they made from subleasing, at least that is what happened to one of my employees who has rental properties). What will be interesting to see is how many of these unresolved 2042 contracts will be left in 18 years. There may not be enough for a law firm to accept for a class action lawsuit which would mean owners would have to hire their own lawyer and the cost of the lawyer most likely would exceed the value of the contract. I believe you had to buy 260 points at OKW at one time. If DVC loses and fights to use this number to base what the per point values will be. Right now with 18 years left there are contracts selling in the 60 range and there are even a few now "asking " for 60. So theoretically, that value will go down when there are only 15 years left. Disney will have made more than enough from the cash stays to pay out the lawsuits if they lose.

Which is why I think we could see Disney just accept the extension fee and not go to court over it. It doesn’t have to be class action either.

And yes, someone might have to hire a lawyer but a simple letter might do it.

Some might not even wait until it ends. They may decide to do it and get owners tougher years before to allow the payment to prevent a lock out even happening

Whole Disney has deep pockets, I am not sure we will see them taken to court for this…letters from lawyers got them to suspend tactics back then.

 

[chalee94]

I don't understand that. $15 for 15 additional years seems like a bargain today, and even in 2007, DVC was selling for around $100 a point or $2 / year versus the $1/ year for the extension. Certainly I understand why some owners wouldn't have done it because of their age in 2042 at the end of the contract, but to say it was overpriced I just don't see.

Time value of money.

$15 for 15 years...35 years in the future.

Resale at the time only valued the extension around $8 a point.

The value of the contracts is mostly in the immediate future. But if you want to give me $10,000, I will happily pay you $12,000 in 30 years. That's a big ole 20% gain in your $1 now=$1 in 30 years math...