Changes to Home Resort Rules and Regulations?

[bobbiwoz]

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I'm still getting my $10 either way. If Goliath was taking all of these points and making spec ressies that would be one thing, but I don't believe this to be the case.
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Chris

We don't know, we have no way of knowing.

My interpretation of "commercial renting" was much broader than many of the people here. We had no experience with time shares before buying into DVC and of course I read the papers given, but I certainly didn't make out all of the nuances that are there.

I'm in favor of the changes. It may not matter to DVD, but it's more along the lines of what I was expecting when I bought DVC.

Bobbi

 

[Chuck S]

I can see a benefit to members that don't want to rent their points. It may help prevent these website from booking popular times without having a renter already lined up. Booking Christmas/NYE during the 11 month window on the speculation of being available to rent the reservation later would block many members out that do want to travel to their resorts during that time frame.

If the members that rented their points through that time of website did so because they didn't want to deal with the hassle of renting, they may rethink the whole idea of renting, and choose not to rent their points, and not pre-book speculation reservations.

Members that bought additional point solely for rental, IMO, bought for the wrong reason. Timeshares are NOT an "investment", ask any financial advisor.

 

[logan115]

We don't know, we have no way of knowing.


Bobbi

Agree

I can see a benefit to members that don't want to rent their points. It may help prevent these website from booking popular times without having a renter already lined up. Booking Christmas/NYE during the 11 month window on the speculation of being available to rent the reservation later would block many members out that do want to travel to their resorts during that time frame.

Agree with this also. If someone has access to enough points to make a ton of spec ressies for a given time period that shuts other members out than that stinks. But, I'll also say that if you're planning on going during a peak period you should be on the phone with MS when they open right at your 11 month window. If someone is shut out because they can't get a reservation at 9 months for Christmas I don't have as much pity for them.
Members that bought additional point solely for rental, IMO, bought for the wrong reason. Timeshares are NOT an "investment", ask any financial advisor.

True - not an investment per se. But hypothetically buying SSR in the low $60s, and renting for $11/pt gives you roughly at 10% return pre-tax which is pretty juicy.

Chris

 

[SuzanneSLO]

I can't see why people would be glad this change has been made.

The new rule doesn't appear to benefit DVC members; in fact, I see only the opposite. The only possible beneficiary is the Walt Disney World Company's profits.

How can eliminating a service which helps DVC members be beneficial for DVC members? The new rules mostly impacts the member who occasionally has to rent out excess points or loose them.

I guess if you've taken a hard stance or philosophical view that all renting is "wrong", than maybe you'd be glad that this rule change was introduced, as it will make it harder to members to rent out their excess points as they'll have to do all the footwork themselves.

But, since renting is specifically allowed in the DVC POS, members have the option of unloading excess points rather than simply loosing them.

I also agree with DVC Mike. I have always had in the back of my mind that if a tragedy were to strike, my family could use a service such as that which is currently offered to get value out of my DVC points until they decided whether to sell them or learn how to use them.

On the other hand, for someone doing a lot of such transactions, I think they will continue to operate and just find another way to stay within the new rules. The real loser will be the hapless individual who is helping out family memebrs who are also owners and will no longer able to be an associate on their family members' accounts.

 

[Chuck S]

The real loser will be the hapless individual who is helping out family members who are also owners and will no longer able to be an associate on their family members' accounts.

Four or more accounts is a lot of individual memberships for one family. I have a master contract and three add-ons. It is still "one account" under this rule. Thus, I could control my membership, and the individual memberships of 4 other family members under this rule. And that would really be the exception rather than the norm for the vast majority of members.

And this rule could also have negative consequences for DVC Sales. If enough "commercial renters" see that renting is no longer as easy, that may increase the number of resale contracts, driving prices lower, negatively impacting the sales of new contracts, and increasing ROFRs, meaning DVD will have a lot of outflow cash if they want to continue price supports of the resale marlet at all. Plus they could have a glut of points acquired through ROFR, increasing DVDs portion of dues and property taxes.

 

[DVC Mike]

My interpretation of "commercial renting" was much broader than many of the people here. We had no experience with time shares before buying into DVC and of course I read the papers given, but I certainly didn't make out all of the nuances that are there.

All timeshares allow renting -- DVC included.

I view using the rental service as no different then me paying a travel agent to book my travel arrangements for me. They are both offering a service for a fee.

 

[drusba]

One question asked is whether the new associate rule can apply to members who purchased before the adoption of the rule. Disney reserves the right to make changes to rules but at the same time it is legally restricted in that it cannot make changes that would have a material impact on the ownership rights of the owners absent a vote of the owners. The associate himself would have no right to challenge it. However, it is probably a closer issue than many may believe as to whether the owner could succeed in a challenge because the rule limits what was hertofore an unfettered right to add an associate.

There is also another interesting issue that few ever think about when you are dealing with rentals and it is the issue of taxes. Under Florida law, those in the "business" of renting hotel rooms, timeshare rooms, homes, condominiums, etc. for short terms (anything less than 6 months at a time) are required to charge and collect the usual rental taxes charged in Florida (the ones you pay when renting through CRO). The "business" of renting excludes those who rent only on occassion but it does include the current broker services who advertise on line and rent via becoming an associate member with the DVC member. Now, I am going to take an educated guess: none of those brokers are charging and collecting that tax. If the tax is not collected and paid, the government agencies can basically go after the broker and those who aided the broker in his business who received the rental income or any part of it. Those who knowingly fail to collect and remit the taxes can be fined besides having to pay all taxes not collected plus interest. The problem an owner has by allowing the broker to become an associate member is that may be enough aiding in the business to make the owner liable for the tax the broker should have collected and paid on the rental related to that owner even though the owner himself only rents on occassion. Another close issue.

 

[Chuck S]

All timeshares allow renting -- DVC included.

I view using the rental service as no different then me paying a travel agent to book my travel arrangements for me. They are both offering a service for a fee.

Yes, but travel agents are licensed/certified and have a relationship with the companies that pay them commission on the bookings.

And many states require that realtors be licensed to handle rental home transactions. I doubt the site in question has either type of certification.

 

[Deb & Bill]

All timeshares allow renting -- DVC included.

I view using the rental service as no different then me paying a travel agent to book my travel arrangements for me. They are both offering a service for a fee.

Of course DVC allows renting a reservation. It says so in the POS. But it also says that commercial renting is not allowed. And a travel agent - or points broker - is commercial.

And, regarding taxes, that's how Al Capone went down.

 

[Chuck S]

It may also be that DVC/MS could be held responsible, as all reservations, including those from that site, have to go through MS. Can you imagine a dues line item for rental taxes?

 

[Doctor P]

Legally they can't prevent renting as long as they themselves are doing so. I wouldn't agree that renting is outside the spirit, IMO, there really isn't a "spirit" but a set or rules and regulations and state laws. The "spirit" is more in the eye of the beholder.

As Ronald Reagan would say, "here we go again." Unless there is a SPECIFIC clause in Florida law that prohibits them from doing so, they can do so based on the way condominium laws have generally been interpreted. Because this is a "condominium", the developer generally is able to reserve rights or is given rights that can extend beyond those given to ordinary owners. A common manifestation of this is that the developer is allowed to rent units while other owners are prohibited from doing so (this has been true in two condominium associations of which I have been a part, one of which challenged the practice in court and lost and the developer was able to continue renting even though owners were not allowed to do so).

 

[Doctor P]

I suspect we all have our own definition of commercial renter but DVC's released "definition" is far more liberal than most on DIS would like to believe.

DVC did not release a definition. They released a "presumption rule" which is quite different. They did enhance the description, for example, to include anyone who had a website for rental as being "commercial".

 

[Plutofan]

There is also another interesting issue that few ever think about when you are dealing with rentals and it is the issue of taxes. Under Florida law, those in the "business" of renting hotel rooms, timeshare rooms, homes, condominiums, etc. for short terms (anything less than 6 months at a time) are required to charge and collect the usual rental taxes charged in Florida (the ones you pay when renting through CRO). The "business" of renting excludes those who rent only on occassion but it does include the current broker services who advertise on line and rent via becoming an associate member with the DVC member. Now, I am going to take an educated guess: none of those brokers are charging and collecting that tax. If the tax is not collected and paid, the government agencies can basically go after the broker and those who aided the broker in his business who received the rental income or any part of it. Those who knowingly fail to collect and remit the taxes can be fined besides having to pay all taxes not collected plus interest. The problem an owner has by allowing the broker to become an associate member is that may be enough aiding in the business to make the owner liable for the tax the broker should have collected and paid on the rental related to that owner even though the owner himself only rents on occassion. Another close issue.[/QUOTE]

Where did you find the business of renting definition? Based upon my dealing I do not believe there are any written exceptions. Of course limited rentals are probably not worth Florida's time.

 

[drusba]

It may also be that DVC/MS could be held responsible, as all reservations, including those from that site, have to go through MS. Can you imagine a dues line item for rental taxes?

Fortunately, that one is not a real risk as the liable parties are limited to those who received all or part of the rental income paid. DVD could face some risks if it expressly permitted rentals by members that would usually require taxes to be collected and evade the taxes but the "commercial purpose" prohibition protects it from any such claim (and probably one of the reasons the restriction was orginally adopted). Since it has a term prohibiting members from engaging in the business of renting, it faces no risk.

 

[bumbershoot]

I can't see why people would be glad this change has been made.

The new rule doesn't appear to benefit DVC members; in fact, I see only the opposite. The only possible beneficiary is the Walt Disney World Company's profits.

How can eliminating a service which helps DVC members be beneficial for DVC members? The new rules mostly impacts the member who occasionally has to rent out excess points or loose them.

I guess if you've taken a hard stance or philosophical view that all renting is "wrong", than maybe you'd be glad that this rule change was introduced, as it will make it harder to members to rent out their excess points as they'll have to do all the footwork themselves.

But, since renting is specifically allowed in the DVC POS, members have the option of unloading excess points rather than simply loosing them.

I am fine with a member renting out their points to someone. That is totally cool with me.

I am in favor of them working toward stopping commercial renting. And I view the adding of someone as an Associate so they can do your work for you as being commercial renting.

I was fine with things the way they were, but *compared to what they could have done*, this change is fine. They aren't, as I said, throwing baby out with the bathwater. They aren't ending renting altogether...renting is a great way to show people what the places are like, and get those people to buy! They are just trying to make it members renting to people, without the middleman businessperson.

If I want to rent our points (or rather set it up so hubby rents his points, uhoh, am I that middleman businessperson? I kind of am!) I'll take it on. If I want to sell something on ebay, I'll take it on. We once sold a bunch of stuff on ebay through a middleman, and got SO taken! They said they were experts in bundling and pricing and they were NOT; we got a tiny tiny fraction of what we should have gotten if we'd taken the time to bundle and price, it was awful. No middlemen! And that's how I feel, now that I know they exist, about middlemen who are put on as Associates so that they can do the work for them. Even though I, as the SAHM/researcher Associate, am that person, if I think about it too hard. How much does it cost to add a spouse to the deed?

 

[logan115]

I am fine with a member renting out their points to someone. That is totally cool with me.

I am in favor of them working toward stopping commercial renting. And I view the adding of someone as an Associate so they can do your work for you as being commercial renting.

I was fine with things the way they were, but *compared to what they could have done*, this change is fine. They aren't, as I said, throwing baby out with the bathwater. They aren't ending renting altogether...renting is a great way to show people what the places are like, and get those people to buy! They are just trying to make it members renting to people, without the middleman businessperson.

If I want to rent our points (or rather set it up so hubby rents his points, uhoh, am I that middleman businessperson? I kind of am!) I'll take it on. If I want to sell something on ebay, I'll take it on. We once sold a bunch of stuff on ebay through a middleman, and got SO taken! They said they were experts in bundling and pricing and they were NOT; we got a tiny tiny fraction of what we should have gotten if we'd taken the time to bundle and price, it was awful. No middlemen! And that's how I feel, now that I know they exist, about middlemen who are put on as Associates so that they can do the work for them. Even though I, as the SAHM/researcher Associate, am that person, if I think about it too hard. How much does it cost to add a spouse to the deed?

I think it's great that you're willing and able to do this, but there are many owners that don't have the time nor the desire to do this, and benefit for the service previously mentioned in this thread and still get very close to the same thing (perhaps even more) had they done this themselves.

If said person is taking these points and making spec ressies than I agree that could be a problem - but we'd have the exact same problem if members with their own points to rent were doing the same thing. But this does not appear to be the case wish said person who shall remain nameless. Given what I know of the service said person is not in the business of booking spec ressies, but rather fills ressies once they are requested.

Whether a renter gets their ressie thru said person, or another member, the result is the same - a room is booked and it is no longer available. The only ones that appear to get the short end is those renters that pay a bit above rental market prices for the ease in which this ressie is made.

Allow me to go out on a limb and say that I really doubt DVC is doing this to help those that are overpaying in the rental market

Chris

 

[jdg345]

I agree 100% with Mike. If I have points I can't use and have the option of having someone else handle the renting for me, and I still get a close to market price for my points without dealing with the headaches that sounds like a nice option to have.

Am I crazy about putting someone on my account for a short period of time as an associate, not really, but that's a decision I'd have to make after researching said person and their history.

For a second, forget about the individual that this will likely have the biggest impact on. What's the difference to me as an owner if I rent my points out to someone for a trip (making the calls to MS myself, booking DME and DDP for them, etc) for $10, or if I rent them to Goliath the Potentially Commercial Renter for $10 by making him/her an associate on my account, and he/she then rents them to someone else for $13 pt ?

I'm still getting my $10 either way. If Goliath was taking all of these points and making spec ressies that would be one thing, but I don't believe this to be the case.

For the record I don't plan on renting often, when we purchased our contract this year it had banked points we couldn't use and I did rent them out. While I did have a great experience (and a bit of fun helping this person plan their trip), I'm not sure that it's something I want to do on a frequent basis.

Now if DVC wants to put Goliath out of business, they could offer to pay $10/pt to members that can't use their points, but I think we all know how unlikely that is to happen. Assuming many owners would rather deal directly with DVC, but because they don't do this it offers an opportunity for someone else to fill the gap.

Chris

ITA!

Plus, I find it amusing that chose 'Goliath' as a nickname.

 

[tjkraz]

Of course DVC allows renting a reservation. It says so in the POS. But it also says that commercial renting is not allowed. And a travel agent - or points broker - is commercial.

I do think that there is a distinction between commercial OWNERSHIP of points for the purposes of renting vs. operating a commercial venture which accommodates the point rental process.

Daddio's service is designed to put together members who have points available and non-members seeking points--in return for a fee, of course. I don't mean to point any fingers but in many ways I don't see how this is different than the DIS rental boards. No there isn't a fee specifically tied to the transaction but the DIS itself is a commercial venture which earns revenue from advertising and sponsorships.

So in a very real way the DIS is profiting from DVC point rentals. So are PayPal, Western Union, eBay and many other entities. And personally I'm fine with that.

I'm sure DVC was within its rights to change this rule but IMO it will be the little guy who is most hurt. The individual with 20 extra points to get rid of may have to work harder or slash prices to get rid of such a small number. Big commercial renters (people who own thousands of points solely for the purposes of renting) aren't paying Daddio to rent their points--they handle all of the work themselves to earn a maximum profit. I would much rather see DVC go after these folks in some meaningful way.

 

[Brian Noble]

I'm not sure the cost/benefit works out going after such renters, though, Tim, without doing a lot of damage to the overall system. Wyndham has taken steps to make life harder for its commercial owner/renters, and it makes life even more painful for the regular owners than this change does---transaction fees, guest fees, completely eliminating transfers, etc. Commercial renters just work those costs into their prices. A few on the margins are probably driven out of business, but for most it just means their profits are a little lower.

On the other hand, Daddio's service is so high-profile that anyone doing even a modest amount of research on visiting Disney who is interested in a Villa-style stay will find him---his marketing is pretty broad. The more visible he is, the more of a threat he is to Mickey's own bottom line, and if a small change can put him out of business, even if some Members suffer a little bit, on balance Mickey finds it worth doing.

 

[CarolMN]

Commercial Renters are those members who buy up an excessive amount of points of their own for the express purpose of renting them out for profit. The new rules regarding associates will do exactly nothing to solve that problem. We'll still have the commercial renters booking prime reservations as spec bookings they hope to rent out at a nice profit. ..........

(I added the color).

I think many posters here would be very surprised to know how many "non-commercial" renters book popular times and do spec rentals. They rent one or two times per year and at 11 months choose Christmas week, one of the Easter weeks or other popular times in popular resorts & views.

IMO, spec rental is spec rental and there are many "ordinary members" who do it. I'm glad the DIS Rent/Trade policy makes it very difficult for spec renters of all types to use the power of the DIS to seek customers.

I agree with Mike that the Associate Member rule change will not do anything to harm "commercial" renters. It will just make it more difficult for some members to rent out points they cannot use in a particular year.

AFAIK, there is absolutely no evidence that the "Associate" brokers ever make spec rentals. The one "Associate Broker" that I know of appears to only make reservations after a request is made, just like many do via the DIS R/T Board. It's a win for everyone except Disney, who stands to lose money if the guest would otherwise book directly through Disney.

My opinion. OK with me if you don't agree.