DVDMC files amendments to separate use year from unit #

[KAT4DISNEY]

DVC doesn’t pay dues on its points. They made a contractual deal common in the timeshare world where in exchange for guaranteeing any loss against their annual estimate of expenses, their points are shielded from dues.

That said, if an even small percentage of members default, DVC will have to make up for any (potentially massive) shortfalls in the year where defaults were triggered and then decide in future years to either:

1. Continue to eat losses on dues, or

2. Raise dues to compensate for the losses.

Option #2 seems a no-brainer unless you know that passing off lost dues onto current members is a self-reinforcing doom that ended up being the final knife in many a timeshare:

In a time of defaults, higher dues merely exacerbate the number of defaults.

I think I recall that in the Board Meetings in December, they always vote that any remaining funds from dues be added to Capital Reserves.

But then this still means that DVC may not pay anything in on dues, correct? Yes, they guarantee that if there's a shortfall they will pay but if they do the budgets high enough then they will never pay for a portion of what is under their control? And if points returned to them fall under that scenario then it's not just points for room maintenance but all DVC controlled points?

 

[Katie L]

Gotcha. I wasn’t responding to you particularly but I’m not sure how many people are aware that DVC doesn’t pay dues on its points in the same sense that we do.

Do we know of they have to pay dues on resales? As in must they stick to terms of contract?

 

[crvetter]

But then this still means that DVC may not pay anything in on dues, correct? Yes, they guarantee that if there's a shortfall they will pay but if they do the budgets high enough then they will never pay for a portion of what is under their control? And if points returned to them fall under that scenario then it's not just points for room maintenance but all DVC controlled points?

It says they don’t have to pay on unsold inventory. I always wondered if that applied to the 2% they are required to maintain and those points they get back but ROFR and foreclosure.

Though if there is an excess it goes to Capital Reserves, which I’m not 100% sure how the guarantee works if there is an excess it only defines how it works if there is a shortage to fees.