Aggressive anti-rental email response from MS

[sethschroeder]

Given that legally all rentals should be reported on your tax return (US Federal at least) this would suggest all rentals would be banned by that definition.

I think if they mean if no profit is taken. You report it but then deduct everything bringing to $0 and thus its not commercial from their view.

 

[sethschroeder]

I just took a look at 7-11 month VGF studio availability and it is excellent. Even most of Christmas week is still available (for a Resort Studio, every night except for NYE). Looking at this kind of availability, I think the claim that commercial renters are making it too hard for people to book is a tough argument to make.

You can't look at an active selling resort. Its drastically different than a sold out resort since there is always excess rooms compared to points in the rental system for DVC members because of how they have to declare rooms.

 

[sethschroeder]

It's hard to imagine a judge going along with Disney claiming that because Bob had a hip replacement, can't travel, and used David's to rent out his unused points a few times, Bob is engaging in "commercial renting". Which is why I suspect Disney has no desire to put this question in front of a judge.

Eh not sure where the line is drawn for commercial renting. That being said during COVID I was very firm that a contract is in place and needs to be followed. You can't just ignore it because its inconvenient.

So someone's sad story may be sad and may get Disney to give them a banking exemption with essentially their bank of points but it shouldn't weigh in to the contract being fulfilled when dealing with thousands of vested interests.

 

[sethschroeder]

It is not my business what other people do with their points and it is not up to me to decide if it is a "justified" use of points - For all I care they could make reservations and not show up if they want.

Its not my business but it is DVC management companies to make sure they enforce the contract which states not commercial renting.

 

[Sandisw]

Its not my business but it is DVC management companies to make sure they enforce the contract which states not commercial renting.

It says one can not use a membership for commercial purposes and thst is currently defined as more fhs. 20 reservations in a 12 rolling month period in the names of others.

That triggers the review. And, there is nothing that anyone has to says DVC isn’t doing that for accounts that seem to go above thst.

Again, I bet there are plenty of LLCs out there structured in a way that keep them within those limits.

Unless DVC decides to define commercial purpose as something thst is the current threshold owners, including companies, has to abide by.

Things being mentioned here like spec renting is not by itself a violation of the personal use.

 

[AnnaKristoff2013]

It says one can not use a membership for commercial purposes and thst is currently defined as more fhs. 20 reservations in a 12 rolling month period in the names of others.

That triggers the review. And, there is nothing that anyone has to says DVC isn’t doing that for accounts that seem to go above thst.

Again, I bet there are plenty of LLCs out there structured in a way that keep them within those limits.

Unless DVC decides to define commercial purpose as something thst is the current threshold owners, including companies, has to abide by.

Things being mentioned here like spec renting is not by itself a violation of the personal use.

The 20 rental thing is not an inviolable rule and if LLC’s are structuring to “get around it” then Disney will adapt. Again, if large companies creating LLC’s to structure purchases around the 20 limit rule solely for the purpose of buying, stripping, renting, and selling is not “commercial use,” than nothing is. It’s certainly not “personal use.”

To the earlier question of “who is getting hurt?” I’m not naive enough to believe Disney will really get involved until Disney starts getting hurt. But with soft hotel bookings right now, and soft DVC sales, outfits like DVC Rental Store are absolutely competing against Disney themselves, and that’s going to get noticed.

Also, all these complex new rules that people are proposing is almost certainly not going to be the route Disney goes, nor are they going to take some kind of costly legal action. They’re just going to start warning and then ultimately cancelling reservations. That’s all they need to do. Why would they do anything more?

 

[Sandisw]

The 20 rental thing is not an inviolable rule and if LLC’s are structuring to “get around it” then Disney will adapt. Again, if large companies creating LLC’s to structure purchases around the 20 limit rule solely for the purpose of buying, stripping, renting, and selling is not “commercial use,” than nothing is. It’s certainly not “personal use.”

To the earlier question of “who is getting hurt?” I’m not naive enough to believe Disney will really get involved until Disney starts getting hurt. But with soft hotel bookings right now, and soft DVC sales, outfits like DVC Rental Store are absolutely competing against Disney themselves, and that’s going to get noticed.

Also, all these complex new rules that people are proposing is almost certainly not going to be the route Disney goes, nor are they going to take some kind of costly legal action. They’re just going to start warning and then ultimately cancelling reservations. That’s all they need to do. Why would they do anything more?

I guess the way I see it is that in order to prevent what people take issue with, they are going to have to make rules that will apply to all and IMO, it’s going to be tough to find rules that would stop LLCs while not crossing the line a membership is now being used for commercial purposes.

Of course, I think there are people, including brokers, who have found ways around the current rules.

And any changes to those rules would be worked around.

In terms of buying, stripping and selling, there is nothing to prevent them from doing that as all owners have the right to sell.

So, we are left with whether DVC has a way to look at collective memberships vs individual ones and what they have the power to do to stop rentals

I honestly don’t believe it’s worth DVCs times and while we do pay for them to make sure our program is run correctly, I don’t see it as a pervasive enough of a problem to lose services we have now in order to then go after the small number of LLCs out there who may be renting collectively more than they should.

Because, in the end, we, as owners, will be paying for it via our management fee and not DVC.

In terms of cancellation? They have to be 110% sure that what they are canceling is a rental as part of a memgerhsip that has been determined to be in violation of the commercial purpose clause. Thst is easer said than done.

Again, as long as one of the owners of the membership is listed as a guest, they can not cancel anything.

 

[we"reofftoneverland]

The 20 rental thing is not an inviolable rule and if LLC’s are structuring to “get around it” then Disney will adapt. Again, if large companies creating LLC’s to structure purchases around the 20 limit rule solely for the purpose of buying, stripping, renting, and selling is not “commercial use,” than nothing is. It’s certainly not “personal use.”

To the earlier question of “who is getting hurt?” I’m not naive enough to believe Disney will really get involved until Disney starts getting hurt. But with soft hotel bookings right now, and soft DVC sales, outfits like DVC Rental Store are absolutely competing against Disney themselves, and that’s going to get noticed.

Also, all these complex new rules that people are proposing is almost certainly not going to be the route Disney goes, nor are they going to take some kind of costly legal action. They’re just going to start warning and then ultimately cancelling reservations. That’s all they need to do. Why would they do anything more?

I agree they will start cancelling reservations. I do think they will give warning first. But they have pretty complicated rules for a lot of other things. So I wouldn’t be surprised if they implement additional hurdles for people trying to rent. I do think their goal is not just limiting rentals but also limiting resale. They want more control of their product.

 

[take36]

I agree they will start cancelling reservations. I do think they will give warning first. But they have pretty complicated rules for a lot of other things. So I wouldn’t be surprised if they implement additional hurdles for people trying to rent. I do think their goal is not just limiting rentals but also limiting resale. They want more control of their product.

Wyndham fixed it pretty quick, sent a few letters then canceled reservations.

 

[CaliAdventurer]

If they cancel a few reservations, word will travel fast across the rental pages in socials and forums like this. That will be enogh to spook the market. If I were a renter, and sometimes, I am, I would be asking the owner a LOT of questions about their rental and contract history and even then I dont think I would bother to rent any longer because the room is just one small expense compared to flights, tix (which must now be purchased by date) etc. What would I do instead? I’d buy more points. And THAT would make DVC very happy, and they know it.

 

[take36]

If they cancel a few reservations, word will travel fast across the rental pages in socials and forums like this. That will be enogh to spook the market. If I were a renter, and sometimes, I am, I would be asking the owner a LOT of questions about their rental and contract history and even then I dont think I would bother to rent any longer because the room is just one small expense compared to flights, tix (which must now be purchased by date) etc. What would I do instead? I’d buy more points. And THAT would make DVC very happy, and they know it.

I don’t own at Wyndham but have family that do. Wyndham pretty much said certain dates and at certain resorts you get so many guest/rentals and any more is canceled. The email was sent by the COO and I believe is still on their website. It’s been like that for a year or two and I don’t think of any (successful) lawsuits to challenge Wyndham. Now there is some differences between Wyndham timeshare and Disney timeshares that can complicate things but even if it is resolved, renters will have to be wary and owners would need to reassure their renters that they fall within the guidelines and there is a backup if it’s canceled.

https://clubwyndham.wyndhamdestinat...mit-usage-LNK&pid=000095040906&pin=4320723960

 

[Sandisw]

I don’t own at Wyndham but have family that do. Wyndham pretty much said certain dates and at certain resorts you get so many guest/rentals and any more is canceled. The email was sent by the COO and I believe is still on their website. It’s been like that for a year or two and I don’t think of any (successful) lawsuits to challenge Wyndham. Now there is some differences between Wyndham timeshare and Disney timeshares that can complicate things but even if it is resolved, renters will have to be wary and owners would need to reassure their renters that they fall within the guidelines and there is a backup if it’s canceled.

https://clubwyndham.wyndhamdestinat...mit-usage-LNK&pid=000095040906&pin=4320723960

I would have to see what the POS for those timeshares say and how it is worded for rentals by owners vs commercial use of a membership.

That could make a h difference in the remedy.

In our case, I certainly do not see how they can limit how many guest reservations can be made and when , without it being a material change to the contract..which requires a vote.

 

[Upatnoon]

Wyndham did a good job of decimating the rental market by cancelling reservations and putting the fear of god into renters. Why rent if there’s a chance your reservation gets cancelled? All Disney would have to do would be to start cancelling the rentals made by brokers who are buying stripping, renting, and selling to make a real dent in the market, since nobody will trust renting from those brokers if they know there’s a chance their reservations can be cancelled at the last minute, leaving them without a hotel for their trip.

Wyndham didn't decimate the rental market.

Right now. there are 84 listings for Wyndham Bonnet Creek on eBay.
There are 41 listings on Redweek.
There are at least 100 on go-koala.
There are still points brokers out there that will rent you a reservation.

They have cracked down on some super-renters that owned millions of points. These people were truly commercial renters.

They limited some booking periods and They eliminated some of the techniques that super renters used to get incredibly profitable deals on rentals.

You likely can't get as rich as you used to via renting, but there is plenty of it going on.

 

[take36]

Wyndham didn't decimate the rental market.

Right now. there are 84 listings for Wyndham Bonnet Creek on eBay.
There are 41 listings on Redweek.
There are at least 100 on go-koala.
There are still points brokers out there that will rent you a reservation.

They have cracked down on some super-renters that owned millions of points. These people were truly commercial renters.

They limited some booking periods and They eliminated some of the techniques that super renters used to get incredibly profitable deals on rentals.

You likely can't get as rich as you used to via renting, but there is plenty of it going on.

Yes, I still plan to rent Bonnet Creek (the pools are amazing!) for future trips so I am glad renting is still a go. But the super renters which I believe the more points you own, the more priority you get which just feeds the cycle are force to share the availability with other Wyndham Club owners. Wyndham Club owners in my opinion has it super rough with a massively complex and in many ways unfair system so this is Wyndham's way of evening up the playing field a bit in terms of getting either the dates the smaller time owners want or able to rent out their points and "share" in the lucrative dates. DVC is much smaller and the problem not as bad but lets be honest, Disney is likely more controlling and more conscious of perception. A DVC timeshare presentation is nothing like a Wyndham interrogation/prison/timeshare shakedown. But in the end both are timeshares with a growing problem, it is not unreasonable for them to take a page out of each other's playbook.

 

[RoseGold]

What would I do instead? I’d buy more points. And THAT would make DVC very happy, and they know it.

Maybe you would. But plenty of people (well, LLCs) would sell.

 

[Huskerpaul]

Wyndham fixed it pretty quick, sent a few letters then canceled reservations.

Big difference is Wyndamn would rather owners who can't use thier points just waste those points. They benefit if no one uses the room.

DVC wants those rooms used all the time - because those people are buying park tickets and spending money in the parks. And that is where the real daily profit potential of a DVC room resides for the Mouse.

 

[take36]

Big difference is Wyndamn would rather owners who can't use thier points just waste those points. They benefit if no one uses the room.

DVC wants those rooms used all the time - because those people are buying park tickets and spending money in the parks. And that is where the real daily profit potential of a DVC room resides for the Mouse.

I am unsure of Wyndham's business model but I assume enough people complained that they felt they had to do something. And from their awful/non existent customer service and zero respect for their members with less then 800k points, I am guessing their bar to doing anything about it was pretty high. Again, two different products and companies with imo vastly different values but the problem appears similar so who knows.

I have been "shut out" of dates and resorts I want but I do not have many points and my dates are not very flexible so I chalk it up to its me not dvc. I am ok staying cash or off site so companies taking all the good dates and resorts is not too bothersome to me as long as I can use up all my relatively low amounts of points and not lose any. But I can see how it bothers others and will always side with the individual owner trying to get a Christmas reservation for their family or renting out because finances are tough and they can't afford the dues versus even the board sponsors. I am sure most of us in the same camp.

 

[AnnaKristoff2013]

I would have to see what the POS for those timeshares say and how it is worded for rentals by owners vs commercial use of a membership.

That could make a h difference in the remedy.

In our case, I certainly do not see how they can limit how many guest reservations can be made and when , without it being a material change to the contract..which requires a vote.

Wyndham did two different things. They did change a bunch of rules. But they **also** figured out who the mega renters were, and first warned them, and then started cancelling their reservations, even if those mega renters were **technically** following the new rules. Because Wyndham had a general catch-all just like Disney does about commercial renting. It’s the second thing that Wyndham did that tanked the rental market, because it put the fear of cancellation into renters. It’s the reason I’m a Wyndham owner now (because I want to be able to stay at Bonnet Creek and I’m not going to risk renting and maybe having my reservation cancelled). Disney only needs to do that second thing to have a significant impact. And I’m sorry, I know we seem to disagree on this, but I think Disney is on firm footing if they start targeting the brokers who are buying/stripping/renting/selling. DIsney woudn’t have to take legal action against thr brokers, the brokers would have to take legal actions against Disney, and good luck to them with that.

 

[AnnaKristoff2013]

Big difference is Wyndamn would rather owners who can't use thier points just waste those points. They benefit if no one uses the room.

DVC wants those rooms used all the time - because those people are buying park tickets and spending money in the parks. And that is where the real daily profit potential of a DVC room resides for the Mouse.

DVC is fine with breakage. They get to rent it out themselves and if it exceeds the percentage cap (I forget what that is) over which they’re contributing to fees, then they get to keep the profits.

 

[GoingSince1990]

Are we certain that this “buying/stripping/renting/selling” is actually taking place on a large scale? Because according to efficient market theory, the value of a loaded contract should equal (1) the value of a stripped contract, plus (2) the rental value of the points that have been stripped from the loaded contract. In this case there would be no arbitrage opportunity from buying, stripping, renting and selling; this would in theory be a breakeven series of transactions, but in practice, given frictional costs such as broker fees, advertising, and so on, probably a slight loss. Anyone engaged in this strategy would also be exposed to market movements between buying and selling. By far the more guaranteed money making strategy for companies like DVC Rental Store is to match renters with owners, charging the renters $24 per point and paying the owners $18 per point (for example).