What does the Right of First Refusal mean?
Right of First Refusal, or ROFR as its commonly referred to in the DVC owners community, is a contract term that is included in all Disney Vacation Club contracts that allow “DVD” (Disney Vacation Development Inc.) to review any contracts being re-sold before the contract is transferred. During this review DVC could decide that they’re willing to purchase the contract at the same terms the seller and purchaser have agreed on.
Here are the relevant snippets from a DVC contract:
You have the right to sell your Ownership Interest, if you choose. However, DVD has a right of first refusal to repurchase your Ownership Interest on the same terms and conditions, including financing that your buyer has offered. Please note that DVD does not provide any assistance in the resale of an Ownership Interest.
DVD Right of First Refusal before Transfer. Before PURCHASER may resell, transfer, assign, or hypothecate PURCHASER’s Ownership Interest to a third party, PURCHASER is required to offer it to DVD upon the same terms and conditions, including financing, as is offered by or to the third party. PURCHASER should refer to Section 14.1.2 of the Declaration for details and requirements regarding DVD’s right of first refusal. DVD’s right of first refusal, as set forth in this Section 14.1.2, are covenants running with the land and shall be binding upon any successor in title to any Owner.
ROFR purchases are common, and DVC uses it to buy any low value contracts up from the resale market. So while you may find a bargain of a contract on the resale market, you have to consider if it’ll get through ROFR first.
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