Using you numbers: If there are a million points each paying $1.00 and 100,000 of them are in defalt and not paying there 2011 dues, than the budget is $100,000 short. DVC has not taken over the points yet because it takes sometimes two or more years for a foreclosure.
It would not take nearly that long. In fact, DVC passed a resolution at the 2010 condo meeting which gives them the right to foreclose simply for non-payment of dues. And unless the owner chooses to fight the proceedings (why would they if they cannot even pay the dues?), the foreclosure can be complete in a couple of months' time.
Additionally, someone who is behind on their dues cannot use the points. Vacant rooms generated by unused points would ultimately be turned over to CRO for rental to cash guests. Income from those rooms is credited back to members as Breakage Income.
During that time DVC is not going to be paying the dues.
Yes they are. Read the section of the operating budget entitled Developer Guarantee.
If someone other than DVC buys the property than the back dues should be paid by the new owner at closing. I do not think that DVC will be required to pay the back dues on property recieves due to dues not being paid.
Right on the first part. Wrong on the second part.
Additionally, bear in mind that these points are a drop in the bucket. You cited about 11,000 points for sale at TTS for Saratoga Springs. If my math is correct, that's less than 1/10 of one percent of the 11,000,000+ points at SSR. And of those resale listings, there is no reason to believe that a significant number are behind on their dues.
The post you linked referencing a resale purchase gone bad is the exception, not the rule. Changes of ownership cannot occur unless all of the mortgage and dues payments are up to date, and FAR more resale contracts go through without incident than those who encounter the issues described.
Do I think that this is going to happen with just this one rule change -- No!, but if DVC continues to make second class owners out of "members" that buy on the resell market - it could happen.
Doubt it. The bigger problem with other timeshares is that demand for a mud week in Branson, Missouri is infinitely smaller than the number of units built by developers.
As long as Walt Disney World and Disneyland stand as viable vacation destinations, there will be demand for DVC contracts. But many market forces will contribute to setting prices.
In fact, I have my doubts as to whether prices will immediately drop as a result of this change. It's a given that resale brokers will get an inordinately high number of offers over the next 2 months from buyers looking to beat the March 20 deadline. That's going to clear out a lot of inventory. In this case, the laws of supply and demand tell us that lower supply will be good for resale prices.
Then it becomes a question of whether the owners of unsold contracts will accept that their contract has a lower value. To illustrate, assume that most of the SSR contracts priced around $62-64 per point are purchased in the next 2 months. Come April, most remaining contracts are priced at $65+. The only way prices will drop is if the owner asking $65 per point today agrees that his contract is worth less and accepts an offer of, say, $59 per point.
There's enough reason to question whether that will happen.
Over time contract prices certainly will decline, but it will be due more to factors like approaching contract end dates and over-saturation of the market (the supply of DVC ownership candidates is not infinite) -- challenges DVC faces, policy changes or not.
