DVC Club Level and Home Resort Survey

[zavandor]

I was actually thinking that maybe they realized what they tried before wasn't legal based on the POS wording so they added language in the new POS to give them the ability for new resorts going forward.

Unless you're saying it's not legal to reallocate regardless of what the POS says - if that's the case then I agree it's concerning.

Florida statute was written when timeshares were all week based and I don't think they've been much updated since.
Florida laws states something obvious, you cannot sell more than 52 weeks for each unit (it's actually 51, because developer much keep 1 week or 2% for maintenance).
But how this translate into a point system? The Florida law is written in a way that the rule above applies to each unit, not to the whole resort. Can Disney say that the total amount of points must be balanced only at resort level and not a unit level? I think not, but I'm not "I'm going to bet my house on it" certain.
However, there are a few tings that make me think they cannot. For example, after such a reallocation, there will be unit for which have been sold more points than the points needed to book them year around. It doesn't seem right.
Also, a reallocation is allowed only to balance demand, but if a Unit is damaged beyond repair and it's not rebuilt, owners of that unit get payment from insurance and their contract is void. But this leaves the remaining resort unbalanced and a reallocation is not allowed by the POS to rebalance after a unit is removed.

 

[dioxide45]

Florida statute was written when timeshares were all week based and I don't think they've been much updated since.
Florida laws states something obvious, you cannot sell more than 52 weeks for each unit (it's actually 51, because developer much keep 1 week or 2% for maintenance).
But how this translate into a point system? The Florida law is written in a way that the rule above applies to each unit, not to the whole resort. Can Disney say that the total amount of points must be balanced only at resort level and not a unit level? I think not, but I'm not "I'm going to bet my house on it" certain.
However, there are a few tings that make me think they cannot. For example, after such a reallocation, there will be unit for which have been sold more points than the points needed to book them year around. It doesn't seem right.
Also, a reallocation is allowed only to balance demand, but if a Unit is damaged beyond repair and it's not rebuilt, owners of that unit get payment from insurance and their contract is void. But this leaves the remaining resort unbalanced and a reallocation is not allowed by the POS to rebalance after a unit is removed.

For a point system, they add a set amount of inventory to the trust then they put on notice that a certain number of points are allocated to that inventory. In the case of CFW, they added land that encompasses 30 cabins and they have allocated 299,820 points to that land. They can't sell more than 299,820 points from what was conveyed for those cabins and it can't cost less to book those cabins for the entire year than 299,8820 points. They can't end up in an overbooked situation where they sold more points than the cabins are worth as a whole.

Each cabin is theoretically worth 9,994 points, but they may charge premiums for certain fixed weeks vs just prime season. So someone buying week 52 week need more than week 52 would cost to reserve based on availability of a fully floating cabin.

 

[zavandor]

For a point system, they add a set amount of inventory to the trust then they put on notice that a certain number of points are allocated to that inventory. In the case of CFW, they added land that encompasses 30 cabins and they have allocated 299,820 points to that land. They can't sell more than 299,820 points from what was conveyed for those cabins and it can't cost less to book those cabins for the entire year than 299,8820 points. They can't end up in an overbooked situation where they sold more points than the cabins are worth as a whole.

Each cabin is theoretically worth 9,994 points, but they may charge premiums for certain fixed weeks vs just prime season. So someone buying week 52 week need more than week 52 would cost to reserve based on availability of a fully floating cabin.

I have not looked into the details for the Trust at all. Both because it's new and still we don't really know what's happen and also because I don't need more points and most likely I'll never buy Trust points.
I should have made it clearer: my post relates only to the existing resorts with deeded ownership.

 

[SpaceMountain77]

With the word out now that FWC will be sold exclusively as a trust product, it just seems logical that the trust was formed, at least initially, not to lump together a bunch of semi unpopular resorts to make them more attractive to buyers, but rather as part of the FWC sales strategy alone. The podcast this morning theorized it might have something to do with the cabins possibly being classified as trailers, not actual deeded property, making financing more difficult. There will be more than enough buyers who want FWC, without having to incentivize them by throwing in a grab bag of unwanted resorts.

And, after DVC’s announcement at the annual meeting, selling Poly2 as a trust would come across as an untrustworthy bait and switch kind of tactic, implying one outcome but secretly planning another, so why would they even open themselves up to that kind of criticism by answering the question to begin with?

I had posted this in another discussion thread.

The cabins are prefabricated housing. Potential buyers should inquire about the construction of the cabins and, specifically, if they are park models or mobile homes. Park models follow the ANSI A119.5 regulations created for recreational use, while mobile homes comply with HUD standards for manufactured housing. If the cabins are park models, then their lifespan will be shorter. If the cabins need to be replaced in 30 years, then it would be imperative to know who is financially responsible for their replacement.

If the cabins are, indeed, park models, then they cannot be financed as housing because of their lifespan.

 

[dioxide45]

I had posted this in another discussion thread.

The cabins are prefabricated housing. Potential buyers should inquire about the construction of the cabins and, specifically, if they are park models or mobile homes. Park models follow the ANSI A119.5 regulations created for recreational use, while mobile homes comply with HUD standards for manufactured housing. If the cabins are park models, then their lifespan will be shorter. If the cabins need to be replaced in 30 years, then it would be imperative to know who is financially responsible for their replacement.

If the cabins are, indeed, park models, then they cannot be financed as housing because of their lifespan.

Looking at the documents, there is a Master Mortgage Agreement which seems to convey rules regarding buyer financing for trust purchases. Looking at the other documents, it doesn't seem like the trust owns the cabins. Perhaps the cabins will be leased to the trust and will be a line item in the annual budget for the trust. The only thing being conveyed to the trust is acreage of the ground lease which results in points being activated for that acreage. So it seems any mortgages will be against a fraction of land that exists in the ground lease and won't be tied to the cabins themselves in any way.

Slight correction on this, it is likely that any financing a buyer of CFW takes will be secured to the beneficial interest they purchase in the trust. That beneficial interest is likely to be on a deed recorded in Orange County.

 

[Paul Stupin]

I had posted this in another discussion thread.

The cabins are prefabricated housing. Potential buyers should inquire about the construction of the cabins and, specifically, if they are park models or mobile homes. Park models follow the ANSI A119.5 regulations created for recreational use, while mobile homes comply with HUD standards for manufactured housing. If the cabins are park models, then their lifespan will be shorter. If the cabins need to be replaced in 30 years, then it would be imperative to know who is financially responsible for their replacement.

If the cabins are, indeed, park models, then they cannot be financed as housing because of their lifespan.

Would the establishment of a trust make FWC financing easier? If so, this explains why the trust was created, and all the theories of DVD blowing up their system to create a multiple resort purchase option start to sound more and more dubious.

 

[dioxide45]

Would the establishment of a trust make FWC financing easier?

I don't think it really makes a difference.

 

[Paul Stupin]

I don't think it really makes a difference.

But of course you don’t actually know. And the simplest explanation remains that selling FWC through a trust, as they are going to do exclusively, is more beneficial for DVD. Perhaps it’s tied to the fact that this is the first DVC property where the actual physical construction will not last 50 years, and the only lasting asset is the land on which it sits.

At least this makes some sense. At least more than the strategy being some part of a master plan to package together a bunch of semi unsuccessful resort properties and foist them off as a good deal. This will not be an option when purchasing FWC, for whom the trust seems to be created.

 

[SpaceMountain77]

But of course you don’t actually know. And the simplest explanation remains that selling FWC through a trust, as they are going to do exclusively, is more beneficial for DVD. Perhaps it’s tied to the fact that this is the first DVC property where the actual physical construction will not last 50 years, and the only lasting asset is the land on which it sits.

At least this makes some sense. At least more than the strategy being some part of a master plan to package together a bunch of semi unsuccessful resort properties and foist them off as a good deal. This will not be an option when purchasing FWC, for whom the trust seems to be created.

Yes!

If the cabins are park models, then they do not meet the HUD standards for manufactured housing because their construction follows regulations for recreational use. The cabins will likely need to be replaced at least once during the 50-year lease, as park models typically have a 30-year lifespan, and ground ownership, rather than unit ownership, allows DVC to replace the cabins when needed.

 

[dioxide45]

But of course you don’t actually know. And the simplest explanation remains that selling FWC through a trust, as they are going to do exclusively, is more beneficial for DVD. Perhaps it’s tied to the fact that this is the first DVC property where the actual physical construction will not last 50 years, and the only lasting asset is the land on which it sits.

At least this makes some sense. At least more than the strategy being some part of a master plan to package together a bunch of semi unsuccessful resort properties and foist them off as a good deal. This will not be an option when purchasing FWC, for whom the trust seems to be created.

But the question was about financing. Timeshare financing is pretty easy to get for most buyers. Limited credit check and the deed is the mortgaged asset. I just don't see where a deed of beneficial interest in the trust vs a deed of a fraction of an individual unit makes a difference. Perhaps I am misunderstanding the question as it relates to financing CFW.

I'm also not sure it is more beneficial for DVC to set this up as a trust. It probably is but it is probably also what had to be done given the nature of the cabins.

 

[Paul Stupin]

But the question was about financing. Timeshare financing is pretty easy to get for most buyers. Limited credit check and the deed is the mortgaged asset. I just don't see where a deed of beneficial interest in the trust vs a deed of a fraction of an individual unit makes a difference. Perhaps I am misunderstanding the question as it relates to financing CFW.

I'm also not sure it is more beneficial for DVC to set this up as a trust. It probably is but it is probably also what had to be done given the nature of the cabins.

I was just theorizing about financing. I agree with you that the more likely answer is that the formation of the trust was due to the nature of the cabins. I don’t see the trust being used for any other purpose.

 

[Sandisw]

I was just theorizing about financing. I agree with you that the more likely answer is that the formation of the trust was due to the nature of the cabins. I don’t see the trust being used for any other purpose.

I actually don’t think that. There is just too much language in there that suggest this is being done for future properties as well.

Now, I am leaning against them adding the undeclared inventory from the current selling resorts…except VDH is still on my maybe…but I think we will see more properties

I also lean now 80/20 it will be how the tower is sold.

IMO, the statement at the meeting left a lot of wiggle room for things to change and I think some have just dimsssed it.

“Our plan right now” and to add to “Poly resort” indicate a change was possible and more than just the normal things that could happen.

They have never used that language before, including with VGF when BPK was announced.

 

[BWV Dreamin]

I actually don’t think that. There is just too much language in there that suggest this is being done for future properties as well.

Now, I am leaning against them adding the undeclared inventory from the current selling resorts…except VDH is still on my maybe…but I think we will see more properties

I also lean now 80/20 it will be how the tower is sold.

IMO, the statement at the meeting left a lot of wiggle room for things to change and I think some have just dimsssed it.

“Our plan right now” and to add to “Poly resort” indicate a change was possible and more than just the normal things that could happen.

They have never used that language before, including with VGF when BPK was announced.

So Sandy in your best guesstimate do you feel the new Poly2 will be sold as both deeded and trust points? Deeded FW’s?

 

[Sandisw]

So Sandy in your best guesstimate do you feel the new Poly2 will be sold as both deeded and trust points? Deeded FW’s?

No. I think they will do one or the other. They are offering the FW option for the cabins so I think that will happen, even if sold as part of the trust association.

I think the only connection to PVB will be that both are at the Poly resort.

Obviously, just my opinion, but at least we will know in the next 4 to 5 months. Hopefully sooner.

And, what we do have to remember is that DVD has not even issued a statement regarding the trust creation or how it will work. It is just that people found the filed documents.

 

[dioxide45]

If they ever have plans to add other resorts to the Palmetto Trust with the ability to book all resorts in the trust at 11 months, I think they need to make this abundantly clear to anyone buying CFW this summer. While DVD reserve the right to later add other use plans, I would be very mad thinking I am buying cabins only for them to start selling Poly Tower with those points having equal access to CFW. If they add VDH or AUL, then all bets are off. This could effectively give them unlimited ability to sell CFW points.

 

[Paul Stupin]

I actually don’t think that. There is just too much language in there that suggest this is being done for future properties as well.

Now, I am leaning against them adding the undeclared inventory from the current selling resorts…except VDH is still on my maybe…but I think we will see more properties

I also lean now 80/20 it will be how the tower is sold.

IMO, the statement at the meeting left a lot of wiggle room for things to change and I think some have just dimsssed it.

“Our plan right now” and to add to “Poly resort” indicate a change was possible and more than just the normal things that could happen.

They have never used that language before, including with VGF when BPK was announced.

I‘d bet the language they added was put in by legal to cover every eventuality, which is typically Disney. I still think the trust is intended right now solely for FWC.

Also, I keep going back to one question. Sure, the statement at the meeting did leave some wiggle room. But why say anything at all that basically implies the same association if they’re going to introduce an entirely new system that would not make it possible for Poly1 owners to book the tower? That would be a monumental miscalculation that would just anger a ton of DVC owners, and make them appear more than a little deceitful.

Or, do you think the trust and the Poly1 association can coexist together in one combined entity? Seems unlikely to me.

 

[tidefan]

No. I think they will do one or the other. They are offering the FW option for the cabins so I think that will happen, even if sold as part of the trust association.

I think the only connection to PVB will be that both are at the Poly resort.

Obviously, just my opinion, but at least we will know in the next 4 to 5 months. Hopefully sooner.

And, what we do have to remember is that DVD has not even issued a statement regarding the trust creation or how it will work. It is just that people found the filed documents.

So just spitballing here.

Let's suppose they are going to add most of PVB2 to the Trust. I wonder if they do that, would they declare some of the units into the existing association as deeded property.

My reasoning is this (so, DVD having their cake and eating it too), I still think they will want to capture add-on sales, which I think would be significant from PVB1 owners. Maybe they could say, we have some deeded property in the Tower, but these interests could only be purchased by Blue Card PVB1 owners?

As a PVB1 owner, I am interested in PVB2, however, if I can't combine points, then it becomes a logistical problem that, to me, isn't worth it.

 

[Sandisw]

I‘d bet the language they added was put in by legal to cover every eventuality, which is typically Disney. I still think the trust is intended right now solely for FWC.

Also, I keep going back to one question. Sure, the statement at the meeting did leave some wiggle room. But why say anything at all that basically implies the same association if they’re going to introduce an entirely new system that would not make it possible for Poly1 owners to book the tower? That would be a monumental miscalculation that would just anger a ton of DVC owners, and make them appear more than a little deceitful.

Or, do you think the trust and the Poly1 association can coexist together in one combined entity? Seems unlikely to me.

It think they couldn’t answer new association because there had been no inkling regarding the trust plan at that point.

They do not tip there hand that something new is coming. I definitely think that a better answer should be the one I am getting now. We have no info to share.

And sure, some things could be for the future but things like the rental language that was really changed wouldn’t be needed to that degree IMO for just cabins.

I guess we will see soon but I just do not believe this is just for CFW. Whether they will use Poly tower as the next one? Up in the air.

But, anyone who is angry about the statement or made decisions based on it? Well, lots of caution by many was given afterward.

Of course, it can definitely still go that way, but given that VGF was clear cut from the start? Can’t see any reason why this situation would need that clarifier when VGf did not.

 

[Sandisw]

So just spitballing here.

Let's suppose they are going to add most of PVB2 to the Trust. I wonder if they do that, would they declare some of the units into the existing association as deeded property.

My reasoning is this (so, DVD having their cake and eating it too), I still think they will want to capture add-on sales, which I think would be significant from PVB1 owners. Maybe they could say, we have some deeded property in the Tower, but these interests could only be purchased by Blue Card PVB1 owners?

As a PVB1 owner, I am interested in PVB2, however, if I can't combine points, then it becomes a logistical problem that, to me, isn't worth it.

I don’t think so any longer. I think they will keep it clean and either sell deeded or sell trust use plans for all.

 

[walt34]

Of course, it can definitely still go that way, but given that VGF was clear cut from the start? Can’t see any reason why this situation would need that clarifier when VGf did not.

I agree with everything you've said with one exception: I don't think you can compare BPK at VGF and Poly2: BPK would have been a very awkward standalone association (200 studios, very similar but not quite the same as the deluxe studios at VGF) while Poly2 could theoretically serve as both: either a standalone association or an add-on to Poly. Therefore the VGF add-on was always clear cut whereas Poly 2 might have been an open question even for DVD. But I don't believe that the question was still open at the meeting in December. They knew then.