Dues past due when selling/closing your DVC contract using Magic Vacation Title/DVC Resale Market?

[MyDogTink]

Who sent the congratulations email? Broker/title company or DVC?

 

[AnnaKristoff2013]

Who sent the congratulations email? Broker/title company or DVC?

DVC doesn't send a "congratulations" email to you when you sell a DVC contract.

 

[sndral]

OP said they were selling 2 contracts, so I guess it’s possible the title company made a mistake & ‘closed’ the wrong contract? I seem to recall a mistake like that happening a while ago, still I find it hard to believe a title company would be that incompetent, it’s their job to make sure all the i’s are dotted & the t’s crossed.

I think there must have been a misunderstanding or miscommunication between OP & the broker/title co. about how the 2024 dues would be paid, resulting in the dues not being paid in full & MS freezing the account.
I doubt that the contract has closed because 1) the buyers haven’t sent their money yet, 2) the deed has not been recorded, & 3) the DVC notification said that the account was frozen for non payment of dues rather than because of the contract being sold/transferred.

I pay my dues annually & am unaware of any way to keep my account in good standing unless I pay the whole year’s dues by 2/15. I assume those selling who pay monthly just leave the automatic payment in place until the contract closes & at that point DVC stops collecting the monthly dues? So I am curious about how OP could pay through April?

 

[CarolynFH]

So I am curious about how OP could pay through April?

When signed up for monthly bank draft, we can go in and pay any amount we wish any time, and it’s not uncommon for us to pay an amount that will cover several months’ payments. So it would be easy for OP to be paid up through April.

 

[KAT4DISNEY]

OP said they were selling 2 contracts, so I guess it’s possible the title company made a mistake & ‘closed’ the wrong contract? I seem to recall a mistake like that happening a while ago, still I find it hard to believe a title company would be that incompetent, it’s their job to make sure all the i’s are dotted & the t’s crossed.

I think there must have been a misunderstanding or miscommunication between OP & the broker/title co. about how the 2024 dues would be paid, resulting in the dues not being paid in full & MS freezing the account.
I doubt that the contract has closed because 1) the buyers haven’t sent their money yet, 2) the deed has not been recorded, & 3) the DVC notification said that the account was frozen for non payment of dues rather than because of the contract being sold/transferred.

I pay my dues annually & am unaware of any way to keep my account in good standing unless I pay the whole year’s dues by 2/15. I assume those selling who pay monthly just leave the automatic payment in place until the contract closes & at that point DVC stops collecting the monthly dues? So I am curious about how OP could pay through April?

When you are signed up for monthly you can also manually pay on it which changes the next auto deduction. Essentially a manual payment covers the upcoming month or two or in this case thru April.

 

[Jimmy Geppetto]

Has anyone ever sold a DVC contract and had this happen to them?

I am in the process of selling two of my DVC Contracts, and I am presuming at this point we are in the process of closing on them (all closing documents were returned, and we were expecting closing to occur after 2/27). Yesterday, my DVC Membership was locked and flagged as past due on my Dues. I had prepaid dues through April 2024 in advance of closing, knowing that the dues would be paid as part of the closing process. I am seeing now that the remaining is due, my account is locked, and it is saying I am past due and to call member accounting (which I will do soon as I'm out of work meetings). This is with Magic Vacation Title (***) and the Board sponsor.

I've only ever sold a contract through www.dvcstore.com and Mason Title, and it was a similar situation where I prepaid a few months but then allowed the balance to be paid during closing, and I never had this issue where my dues were considered past due and my account was locked during the closing process.

I've also emailed ***/DRM to find out what is going on and get this resolved, but I also want this fixed so that my account never has a record of being past due.

I am so sorry you are going through this. They are terrible to deal with and filled with incompetence.

I hope it gets figured out soon for you.

What a mess.

 

[lilsonicfan]

When I bought in spring 2023, Magic Vacation Title was roundly seen as the slowest title company, taking weeks to deliver closing docs when Mason and others would get those done within a week, often far less. I see in the Closing Time thread that they are moving faster, but maybe it’s at the expense of careful, prudent work?

 

[sndral]

When signed up for monthly bank draft, we can go in and pay any amount we wish any time, and it’s not uncommon for us to pay an amount that will cover several months’ payments. So it would be easy for OP to be paid up through April.

When you are signed up for monthly you can also manually pay on it which changes the next auto deduction. Essentially a manual payment covers the upcoming month or two or in this case thru April.

Thanx for the explanation & if that’s what OP did, then DVC should not have frozen the account for non payment, so that makes it even more inexplicable to me, I’ll be curious to know what the issue turns out to be & hope it’s resolved soon.

 

[AnnaKristoff2013]

Thanx for the explanation & if that’s what OP did, then DVC should not have frozen the account for non payment, so that makes it even more inexplicable to me, I’ll be curious to know what the issue turns out to be & hope it’s resolved soon.

As I understand it, DVC requires the dues to be paid in full for the year (not monthly) when the deed is transferred. They won’t transfer the deed unless they get the full year’s payment. Unfortunately, the only sequence of events I can see that makes sense that leads to this situation is as follows:

1. OP is on the monthly payment plan (as described) and is paid through April. Thus, in order for the deed to be transferred by DVC, the rest of the years dues have to be paid.
2. Closing company/broker screws up and records a deed to the new buyer without getting payment;
3. Closing company send notice of new deed to DVC, without remitting the full amount of the years dues (because they never received payment from the buyer);
4. DVC won’t process the transfer, because they don’t have the dues paid, and DVC follows it’s policy and locks the account until the dues are paid.

For OP’s sake I really hope the buyer just ends up paying late and “assumes” the ownership, because otherwise, I can’t understate how sticky this situation could end up to the OP due to the closing company’s error (which is really unheard of for an escrow/closing company. They have one job and it’s to make sure they get the money before they record the deed!)

If Buyer never sends the money and never assumes the ownership, I’m trying to play out how this ends, and I don’t see how it ends outside of a court proceeding with potential negative ramifications to Op. Op has now deeded this real estate to someone who never completed their end of the property contract. Worst case scenario for Op is that the buyer changed their mind and just stops responding, ignoring etc. Now, as a baseline, Op owes this years maintenance fees to DVC (because while DVC allows owners to pay monthly, that doesn’t extinguish the fact that this years dues became due during OP’s ownership).

In addition to that, DVC is going to have to foreclose on the deed, because they’re not getting new maintenance fees from the new owner. Except, now we have a problem, because DVC is aware of this situation, and if I’m DVC’s attorney I’m advising them (as they are required to do) to list as defendants in a foreclosure action all persons who have a property interest in the underlying deed, because all those interests need to be foreclosed in order for clean title to be conveyed at auction. And OP, arguably, still has a property interest in the underlying deed, because it never should have been recorded in the first place. So OP could find himself a named party in the foreclosure action.

Hopefully the buyer just pays and this is a mistake on the buyer’s part in addition to the broker/closing company, but boy this situation can go really south really fast. If I’m the OP and the buyer doesn’t end up paying I’d be speaking to an attorney. There are potential damages to the OP here that go beyond the sales price of the deed.

 

[AnnaKristoff2013]

I don’t actually know… do deeds show up immediately on the comptroller site? Now I need to go check

@Lorana, it looks like the OC Comptroller’s Deed Search website is working again, it’s located here: https://or.occompt.com/recorder/eagleweb/docSearch.jsp

You can search for your deed by name. It may take a few days for a recorded deed to show up so I’d keep checking.

 

[TheDailyMoo]

I'm getting resale PTSD reading this. I know there are hundreds, thousands of resale transactions that happen smoothly and without a hitch but when something wonky happens to you it's not a good feeling at all! Hope this works out in the end.

 

[MyDogTink]

As I understand it, DVC requires the dues to be paid in full for the year (not monthly) when the deed is transferred. They won’t transfer the deed unless they get the full year’s payment. Unfortunately, the only sequence of events I can see that makes sense that leads to this situation is as follows:

1. OP is on the monthly payment plan (as described) and is paid through April. Thus, in order for the deed to be transferred by DVC, the rest of the years dues have to be paid.
2. Closing company/broker screws up and records a deed to the new buyer without getting payment;
3. Closing company send notice of new deed to DVC, without remitting the full amount of the years dues (because they never received payment from the buyer);
4. DVC won’t process the transfer, because they don’t have the dues paid, and DVC follows it’s policy and locks the account until the dues are paid.

For OP’s sake I really hope the buyer just ends up paying late and “assumes” the ownership, because otherwise, I can’t understate how sticky this situation could end up to the OP due to the closing company’s error (which is really unheard of for an escrow/closing company. They have one job and it’s to make sure they get the money before they record the deed!)

If Buyer never sends the money and never assumes the ownership, I’m trying to play out how this ends, and I don’t see how it ends outside of a court proceeding with potential negative ramifications to Op. Op has now deeded this real estate to someone who never completed their end of the property contract. Worst case scenario for Op is that the buyer changed their mind and just stops responding, ignoring etc. Now, as a baseline, Op owes this years maintenance fees to DVC (because while DVC allows owners to pay monthly, that doesn’t extinguish the fact that this years dues became due during OP’s ownership).

In addition to that, DVC is going to have to foreclose on the deed, because they’re not getting new maintenance fees from the new owner. Except, now we have a problem, because DVC is aware of this situation, and if I’m DVC’s attorney I’m advising them (as they are required to do) to list as defendants in a foreclosure action all persons who have a property interest in the underlying deed, because all those interests need to be foreclosed in order for clean title to be conveyed at auction. And OP, arguably, still has a property interest in the underlying deed, because it never should have been recorded in the first place. So OP could find himself a named party in the foreclosure action.

Hopefully the buyer just pays and this is a mistake on the buyer’s part in addition to the broker/closing company, but boy this situation can go really south really fast. If I’m the OP and the buyer doesn’t end up paying I’d be speaking to an attorney. There are potential damages to the OP here that go beyond the sales price of the deed.

Doesn’t OP have recourse to the title company? Shouldn’t the title company make OP whole?

 

[AnnaKristoff2013]

Doesn’t OP have recourse to the title company? Shouldn’t the title company make OP whole?

Absolutely, but “whole” here may be complicated given the misrecorded deed. Hopefully the title company figures out how to make this right.

 

[Cyberc1978]

Absolutely, but “whole” here may be complicated given the misrecorded deed. Hopefully the title company figures out how to make this right.

I don’t think it’s been established that the deed has been recorded yet?

 

[AnnaKristoff2013]

I don’t think it’s been established that the deed has been recorded yet?

It hasn't, but I don't see how you get to the step of "Disney froze account for unpaid dues" without the closing company forwarding the transfer paperwork to Disney, which in turn can't happen until the deed is recorded.

 

[Cyberc1978]

It hasn't, but I don't see how you get to the step of "Disney froze account for unpaid dues" without the closing company forwarding the transfer paperwork to Disney, which in turn can't happen until the deed is recorded.

I’m inclined to agree but as long as the deed hasn’t showed up on the comptroller’s website it can’t be recorded yet.

 

[Sandisw]

It hasn't, but I don't see how you get to the step of "Disney froze account for unpaid dues" without the closing company forwarding the transfer paperwork to Disney, which in turn can't happen until the deed is recorded.

It’s possible that it was acccounting or that the prepayment didn’t get applied to the correct contract?

I had monthly set up for one of my VGF contracts and it was fine in 2022 and 2023…yet, it didn’t show up for this year and my account got locked.

No clue how it changed. So, maybe that happened here and that contract showed yearly vs monthly and of course, it showed past due.

 

[AnnaKristoff2013]

It’s possible that it was acccounting or that the prepayment didn’t get applied to the correct contract?

I had monthly set up for one of my VGF contracts and it was fine in 2022 and 2023…yet, it didn’t show up for this year and my account got locked.

No clue how it changed. So, maybe that happened here and that contract showed yearly vs monthly and of course, it showed past due.

Hopefully Op will come back and update us.

 

[we"reofftoneverland]

Jeffrey Sweet for title
Jeffrey Sweet for title
Jeffrey Sweet for title

 

[Lorana]

So it turns out that *** doesn’t send payment upon closing. They only have 2 days per week they send payment to DVC. They processed closing documents on 2/29 and sent out an email informing us we were officially closed. They processed the deed on 3/1. They paid DVC for the dues on 3/5. My account was not cleared until this morning 3/7.

Lesson seriously learned: I’ll pay dues in full before closing, especially if using ***.

Note that I did not have this issue with Mason. They paid the dues balance at closing and my account was never locked or shown past due.