Aggressive anti-rental email response from MS

[sndral]

The Multi-site POS has the language. It defines the Personal Use and specifically defines it as owner's guests and lessees. Since a lessee is someone who rents, I'd say it is pretty clear we can rent out the use of our ownership interests.

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Thanks, I recall reading that clause, but I interpreted it to be in the same category as the clauses requiring you to have a contract when you rent - those clauses contemplate that renting will occur & regulate it, but I don’t see anything that gives an owner a right to rent per se . Not that I think DVC would try to forbid all renting - they don’t need to given how broad their power to define & limit commercial use is. In a dispute the issue would likely be is this owner engaging in personal or commercial use rather than is DVC taking away an owner’s ‘right’ to rent.
Apparently per the POS (VGF 2013 version p. 168) they have adopted a policy regarding commercial use which may be viewed upon request.
I wonder if anyone has requested to see it lately & whether it’s still the 20 per annum presumption or if it has changed.

 

[Sammie]

The way I see it, they are protecting their interests and therefore ours too.


An advisor at the platform emailed and indicated they would be verifying the rental details and asked me to contact the resort to let them know they would be calling to "expedite" verification.

Considering what you were asking MS to do was way out of the acceptable, no way I would be complaining to them about the email sent. I would just let it go. It was on you, to know the platform can't verify at the resort or from Member Services. They have always been very clear they don't get involved in rentals. I would just chalk it up to never conduct business when not feeling well. I would not deal with a company that does not understand how DVC works. There are too many to use that do including the page sponsor.

 

[we"reofftoneverland]

I have always thought renting was iffy. And I have been waiting for dvd to crack down on it. It’s obvious to me that there are plenty of individuals and companies that are renting out dvc for commercial purposes. I suspect they will start limiting people to one rental a year. Heck, if they can decide that benefits I purchased with my contract do not transfer in resale, then they can certainly say that renting is not allowed.

 

[Sammie]

I'd have to dig but I think I might have kept the letter they sent about a decade ago that outlined 20 reservations as possibly being a trigger. It left ambiguity but defined it as much as we've ever seen,

Yep they did, it was 20 or more rentals and yes they have gone after some big commercial renters over the years. Many years ago a large group of people got their reservations cancelled due to this.

 

[Bearval]

I'm wondering if it was because you emailed member services about the rental company reaching out to them to verify (never heard of that before). Could it be a response specifically to using a third party broker ("over the internet"), as third party sites are a commercial enterprise and, in essence, advertise either points or confirmed rentals for a fee?

Just thinking pout loud here, but they may be considering using a third party site to advertise your points over the internet to be commercial activity.

I think you " hit the nail on the head" with them considering using a third party commercial site to rent out your points as " commercial" activity. I think DVC " had" to send out that form letter when they were notified by the DVC member they were using a commercial third party to rent out their points just so in the future if DVC decides to aggressively enforce the " no commercial renting of points policy".

 

[Yankee626]

I cannot see Disney trying to straddle that fence, offering villas for cash at one rate and villa rentals at another rate.

They could offer to buy-back single year points for a fixed price. But the rate would surely be lower than what rentals yield. Right now, when using exchange programs (DCL, ABD, etc.), the value Disney assigns to points is only about $9 each. And the owner still has to pay annual dues.

If DVC offered to buy-back points for $9-10 each, with members still paying dues of ~$8 each, I doubt they'd get many takers.

Rentals "work" because they are a means for getting a hotel-like villa (Studio) for less than a standard Disney hotel room. Disney can't afford to under-cut its own pricing.


For many years, people asking DVC about selling their points were referred specifically to Fidelity. I always assumed DVC had some deal to get a kick-back from Fidelity. But no hard info either way.

Why cant they offer $22 a point like they are right now for Magical beginnings for the DHV . They could still rent them out at full price.

 

[AnnaKristoff2013]

DVC would have no authority to contact the rental brokers for trips booked on someone else’s membership

Doesn’t DVC Rental Store own a decent number of contracts (the whole, buy, strip, sell thing they do), and therefore couldn’t they be contacted for that reason?

 

[AnnaKristoff2013]

Just saw somebody else (I am assuming) on Facebook who got the same email.

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Good. Long term this will be good for almost all owners (including the ones who rent). The people who were spec-booking popular times to list on the brokers, and the brokers who were buying, stripping, renting, and selling were pushing the system well past it’s intended use. There needs to be some kind of reigning in.

 

[New Mouse]

I always thought rentals would garner more attention offering the points for any available dates rather than a specific resort + room + dates. But some people started grabbing specific room types and dates to maximize their revenue. And now some rental sites have gone all-in on this idea of forcing members to pre-book dates for posting on a web site. There are organizations who have control of large blocks of points, who habitually roll their unrented reservations to new dates, tying up availability.

I have no idea what sort of Disney guest would want to buy a 1-2 day rental in a One or Two Bedroom villa. But here we are...

I would be curious to see how the statistics have changed over the years for 31 day cancellations. I would imagine a ton of these members just cancel right before the deadline and reroll into a new date hoping to find someone to buy.

 

[fumanchu2488]

Disney already knows that renting is happening. More importantly, they know what renters are spending.

If renters acted like unfavorable owners (like me) and came with APs and a sandwich from home, they'd be cracking down. Wildly speculating here that those families spend more than me in the parks, at least per night. And let's be clear about the goal here. This is all about revenue for the mouse.

But.... Disney would make even more money if members points went unused, they collected maintenance on them, and then they booked them as cash stays themselves. Those same once a year or once in a lifetime people would be spending the same amount outside the rooms and would be spending more per night directly with Disney.

 

[tjkraz]

Why cant they offer $22 a point like they are right now for Magical beginnings for the DHV . They could still rent them out at full price.

I sell back 50 Riviera points at $22 each. Disney pays me $1100. Disney takes those 50 points and turns them into a Standard View Two Bedroom on a weekday in July / August. Assuming Disney can sell that room for at least $1100, their profit margin is essentially zero on the transaction. If the room sits empty, Disney has lost $1100.

They'd be much better off putting guests in one of the 25,000 hotel rooms they already own.

Magical Beginnings is an overly-generous trade in offer that basically serves as a stealth sales incentive.

 

[fumanchu2488]

Good. Long term this will be good for almost all owners (including the ones who rent). The people who were spec-booking popular times to list on the brokers, and the brokers who were buying, stripping, renting, and selling were pushing the system well past it’s intended use. There needs to be some kind of reigning in.

Agree. And why not send an email or letter to all members that clarifies what the intent of what rentals are. That using a broker to rent points is 'commercial use' and that by profiting through rentals it can be considered 'commercial'. Essentially warning everyone that the way to rent is by selling points to family and friends at the maintenance + capital cost of the points at breakeven (or close to it). I know my break even at Riviera is somewhere around $13 per point between maintenance and what I paid for the points.

My non legal interpretation of the rule would be that renting points at $21 or $25 or $30 and profiting thousands of dollars a year is not the intent of the system. Renting points to friends and family on the occasional basis was the intent. I know we 'rent' our points to my parents to travel with us. And by that I mean I book two rooms with my points and they pay me about $13 or $14 per point to stay in their room. I think that was the original intent.

However, I wonder how much the resale value is propped up by these large point holders that do use the system for 'commercial use'? I honestly have no idea what that number in terms of a percent of points could be.

 

[sethschroeder]

Perhaps a re-read of the POS would be beneficial. I've gone to look at this part more than once. It's pretty clear - renting is allowed. You may not transfer points for cash however per the POS.

Had it open last night yet again.

It says a personal use is allowed such as and gives renter as an example. That does not mean you can make profit from that renter on your points.

Disney can argue that renting for the cost of MFs is allowed as you are making no money. Renting $10-$20/point becomes commercial though as you are actively seeking a profit.

Everything about where renters are outlined is specifically regarding it being for personal use. As soon as you start driving profit personal use possibly is no longer true since the whole purpose of the language is to stop people from buying DVC and essentially undercutting Disney's cash business.

 

[sethschroeder]

RIght why would someone own over 30 contracts?? Unless you are running a DVC rental business

Also if you split those contracts to try and hide it that is called out in the contract as well as not allowed.

I could see 30 contracts for a corporation where they give free trips to management and employees.

 

[fumanchu2488]

Had it open last night yet again.

It says a personal use is allowed such as and gives renter as an example. That does not mean you can make profit from that renter on your points.

Disney can argue that renting for the cost of MFs is allowed as you are making no money. Renting $10-$20/point becomes commercial though as you are actively seeking a profit.

Everything about where renters are outlined is specifically regarding it being for personal use. As soon as you start driving profit personal use possibly is no longer true since the whole purpose of the language is to stop people from buying DVC and essentially undercutting Disney's cash business.

I would argue that you could add the cost of your points into the equation as a breakeven. For me, I paid around $4.50 per point for my Rivieria points all said and done (which is a fixed cost the rest of my contract). So I would feel comfortable arguing that I could rent my points for the yearly MF + the $4.50 per point.

 

[sethschroeder]

Could a commercial pattern include contracts that never or very rarely get used by the actual owner(s)? This conversation is timely to discussions DH and I are having. Beside wondering the impact of DVC implementing stronger rental rules on resale values, we’re curious to the risk buying our third contract mostly just to rent out. We’re not interested in using it ourselves, mostly just for family joining us and rental. DH sent an email inquiring. Hopefully no issue here.

I think you are still looking at a tiny subset of all DVC contracts. Those looking to at times rent their points out would never be identified as well.

Example of 30 contracts is basicly not even a large portion of money sales typically let alone all contracts that exist.

 

[sethschroeder]

Heck, if they can decide that benefits I purchased with my contract do not transfer in resale, then they can certainly say that renting is not allowed.

Unless you are the OP and email them then Disney will never know. They are even less likely to know if you don't rent out spec rentals where you reserved a room then try to rent that out for a premium so you need to change names.

Disney can track how often recurring names are on reservations, if they are linked in MDE to you, if you change names of lead guest.

 

[sethschroeder]

I would argue that you could add the cost of your points into the equation as a breakeven.

I jumped to the $10-$20 spot because of this as you likely are right that it could be aruged that way.

Additionally how you view the value of the base contract going to $0 might be different than mine so while your RIV extra might be $4 mine might be $7 even with the same exact contract since I view the value depreciating faster.

In the end will never get there. Just don't tell Disney and you are fine with renting a few points at times.

 

[we"reofftoneverland]

Agree. And why not send an email or letter to all members that clarifies what the intent of what rentals are. That using a broker to rent points is 'commercial use' and that by profiting through rentals it can be considered 'commercial'. Essentially warning everyone that the way to rent is by selling points to family and friends at the maintenance + capital cost of the points at breakeven (or close to it). I know my break even at Riviera is somewhere around $13 per point between maintenance and what I paid for the points.

My non legal interpretation of the rule would be that renting points at $21 or $25 or $30 and profiting thousands of dollars a year is not the intent of the system. Renting points to friends and family on the occasional basis was the intent. I know we 'rent' our points to my parents to travel with us. And by that I mean I book two rooms with my points and they pay me about $13 or $14 per point to stay in their room. I think that was the original intent.

However, I wonder how much the resale value is propped up by these large point holders that do use the system for 'commercial use'? I honestly have no idea what that number in terms of a percent of points could be.

The legal language is vague on purpose because they knew that they would not be able to anticipate all the things dvc owners would do as far as renting. Like 30 years ago, Disney probably did not anticipate that a broker would buy contracts, strip them, make a rental profit, and then sell them. They left the language vague so that they could address any future issues that would arise.

Renting was not a problem when it was low key and not widespread. However, it’s pretty obvious that the system isn’t working the way it is supposed to work and that is partially due to large commercial renting agencies. It’s as if other companies have come in and taken over the DVC system.

 

[we"reofftoneverland]

Unless you are the OP and email them then Disney will never know. They are even less likely to know if you don't rent out spec rentals where you reserved a room then try to rent that out for a premium so you need to change names.

Disney can track how often recurring names are on reservations, if they are linked in MDE to you, if you change names of lead guest.

Yes, I agree. But I suspect Disney will put things in place to limit renting to once or twice a year per membership or something like that. The same way they limit transferring. Or maybe they will just leave the system in place and go after real commercial players. Or maybe they will say something like you cannot rent through an agency. Regardless, those emails they sent out show that Disney will definitely do something. Those are pretty serious emails.