Most people know they can buy Disney Vacation Club points directly from The Walt Disney Company or via the resale market from brokers such as The Timeshare Store. But there is a third, far less common way to buy additional DVC points: Court ordered public foreclosure auctions.
Every month, the Orange County (FL) Clerk of the Courts auctions off dozens of DVC deeds to the highest bidder. These auctions are open to the public and are conducted electronically, so anyone who has access to the internet can register with the Clerk of the Court and participate in these auctions.
The entire foreclosure process — from a complaint being filed against a DVC owner for being in arrears on their mortgage or annual dues to final resolution — can take 9 to 12 months. But once the Court issues an order to sell a deed, the public auction process moves very quickly. Bidding is done electronically and in real time through a website managed by the Clerk of the Court. A bidder will know within a minute or two of the opening of the auction whether they have the winning bid.
In most cases, the time from making the winning bid to getting title to a DVC deed takes two to three weeks. This is a much quicker timeframe than if deeds are bought via a normal resale transaction. Since deeds bought at public foreclosure auction do not go through Disney’s Right of First Refusal, they do not have the typical 30 day delay as Disney decides whether to exercise its ROFR.
Prices paid for DVC deeds at these public auctions vary, but generally are very competitive to the prices one would expect to pay on the resale market. Several months ago, a 310-point deed for Disney’s Old Key West Resort was won at auction for about $49.35 a point. Although such deals can happen from time to time, they are not commonplace. Recently, a more realistic price occurred when a winning bidder paid $97.50 a point for a 160-point deed for Bay Lake Tower at Disney’s Contemporary Resort.
Anyone can bid on deeds at these public auctions, but Disney itself tends to place the winning bid on the overwhelming majority of auctions. In August 2015, Disney had the highest bid on all 68 deeds that were auctioned. In fact, Disney was the only bidder on 45 of the 68 deeds and was able to get title to each deed by making an initial bid of only $100. The other 23 deeds were involved in a bidding war between private parties and Disney. Records show bids steadily increasing--typically in increments of $100--until the private buyer dropped-out. The highest price paid by Disney was $16,200 for a 210-point deed for Disney’s Beach Club Villas, or about $77.14 per point.
But individuals can win, too. Earlier this year, one individual won 26 deeds at public auction. Several of those deeds are now being re-sold at a profit. The 310-point Old Key West deed won at auction for $49.35 a point was sold about three months later for about $72 a point.
By law, public notice must be given when a property is being auctioned. The Orange County Clerk of the Courts has been placing notices of auctions in the Heritage Florida Jewish News, a weekly newspaper published in Orlando, Florida, giving at least a two-week notice of the auction day and time. There are two other ways to learn about upcoming auctions. The Clerk of the Court’s foreclosure website has a calendar of upcoming auctions. However, the information on that site is difficult to navigate; all timeshare properties are labeled as “Timeshare”, so its necessary to click on each auction to determine if it involves a Disney Vacation Club deed or another timeshare property.
A more direct way to find out when a DVC property is being auctioned is by searching the Orange County Comptroller’s website for Judgment documents filed by the Circuit Court. Foreclosures can be uncovered by entering “Palm Financial” in the Grantor field and selecting “Judgment” as the document type. Each Judgment document has the legal description of the DVC property and the date and time of the upcoming public auction.
Details regarding Orange County’s public foreclosure auctions can found on the Clerk of the Courts’ foreclosure sales website. The site outlines how to participate in foreclosure auctions and the fees & taxes involved in winning a property at auction.
Bidding on DVC deeds at public foreclosure auctions is different than buying directly from Disney or through a traditional resale transaction. When buying directly from Disney, DVC Guides will guide buyers through every step of the purchase from start to finish. Third party brokers and closing agents offer similar help to their clients when they buy deeds on the resale market.
Public auction bidders must fully eductate themselves regarding all responsibilities and obligations. As stated on the Clerk of the Courts website in bold print: “Buyer Beware. Bidders are responsible for conducting their own research as to the property being sold, its location or condition, the condition of any structures or fixtures thereon, its marketability, potential uses, zoning, or whether any other potential liens or other defects in title that may exist.”
Wil Lovato is a contributor to DVCNews.com and has been a Disney Vacation Club owner since 2009. His DVC Home Resorts include Bay Lake Tower, Animal Kingdom Villas, and Aulani. He can be found posting on many Disney discussion forums under the username of “wdrl”.
