Commerical Use Policy Update - New Thread!

[Sandisw]

It’s irrelevant. If they are keeping the 20 rules as the primary policy, then nothing changes. We’ll still have our “experienced renters” renting out all 1400 points they own as long as they stay under 20 rentals it’s all good.

This is incredibly disappointing and I’ll be writing to member services expressing my disgust.

Its only irrelvant if someone is actually doing that and as I said, get to 20 and you can be reviewed....once reviewed, DVC can still say that it looks like your rental income would be at a commerical level.

I think its no longer going to be an either or situation as in the past which was....stay below 20 and we ignore.....only cancel above 20...now, I suspect...and of course, it is my speculation...is that you get to 20, and be prepared for scrunity.

But, having said that, I 100% agree that you should send your disappointment to DVC....that you are not happy with how they define commerical renting....

 

[Brianstl]

I didn’t think that is what Sandi is saying, and I think it’s pretty clear it isn’t what MS is doing—they wouldn’t be flagging/reporting name changes that look like a rental if the minimum threshold was 20 reservations, and they wouldn’t have told Sandi that your dues need to be greater than your rental income—they would have mentioned the 20 or less rule.

Editing to add: the 20 res rule is clearly not what MS referred to recently because at 20 reservations you have to prove there are ZERO rentals of your first 20 reservations. This is a separate kind of scrutiny balancing total dues against rental income, which wouldn’t make sense for the zero tolerance at 20 reservation rule—in which case income and dues are both irrelevant.

They have defined what commercial purposes is in their policy. They can’t tag you for commercial purposes violation if it doesn’t fit their own definition.

 

[HyperspaceMountainPilot]

They supposedly have a definition of commercial enterprise according to the POS

They have defined what commercial purposes is in their policy. They can’t tag you for commercial purposes violation if it doesn’t fit their own definition.

While Sandi did not share the copy DVC sent her of the 2011 policy, she said it is similar to the 2008 policy, which very clearly did not make the 20 res rule the exclusive meaning of commercial enterprise. It has been stated many times by many lawyers that Disney does NOT have to spell out the exact distinction, only that they have adopted some policies which give guidelines to members…the foundational documents governing the time shares make clear Disney can prohibit all non-personal use. Disney has now decided renting points in excess of your annual dues is not personal use and therefore not permitted and there’s nothing preventing them from enforcing the interpretation (other than the very unlikely event of a court holding the restriction to be unreasonable, which only applies to the older resorts).

It doesn’t make any sense to read a new dues > income in addition to a “first 20 rentals OK” policy unless you think Disney actually wants to increase the amount and frequency of rentals (which is laughable).

 

[Sandisw]

So you don’t consider the possibility that 20 reservations is one of, but not the sole indicator that they will be using?

You can have 21 reservations and not be commercial, you just better have the documentation to back it up.

You can also have five reservations and be commercial, so you don’t consider that they’re simply going to add other criteria for reviewing commercial versus non-commercial renting?

The policy is from 2011, it’s not updated with what was announced at the prior to last HOA meeting six months ago.

Of course this could be updated in the future, and if so, then the records of the association will reflect that....however, as of today, this policy has not changed and IS the current commercial use policy that the board has adopted. If this was not in force, then it would not have been sent to me....

Nothing that was said at the HOA meeting contradicts this policy in anyway....they said large point owners who are commerical renting and its a frequent occurence.

As I mentioned, the last clause that says they can add to it is there, and it doesn't mean this is an exhaustive list, but I do think that it has to still play a role in decisions....I do not believe they can flag someone as commerical with 5 reservations, because the first line of the policy says "DVC members can make as many reservations as they desire up to 20. If they want more, then they have to prove to DVC they are all for themselves, family and friends."

If DVC can prevent something from booking more than 5 because they think they are commerical then it directly contridicts that first part of the policy.

As I have said, they can add to the policy and define other things to the policy, but they can't make rules that are in direct conflict with the policy without amending the policy.

 

[VGCgroupie]

So. I am against commerical renting. I own a lot of points. I have done a few rentals (4). But I have done ALOT of reservations for myself. In a 12 month period not counting anything cancelled/rebooked I have had 15 reservations. I am nowhere near a commercial renter and I think this 20 reservation rule is outdated for when people didnt go to the parks as often, when there was less resorts so not as many split stays. I have 3 trips where I did a split stay so I have 6 reservations for it. I have another trip where I booked 2 studios since a 2 bed was unavailable.

Is only reservations where a stay occurred that will be counted as 20 or will reservations made and then cancelled count, I assume not.

Edit to add I am not saying this isnt the rule, but rather that I am disappointed this is the rule as a large point holder who goes to the resorts alot.

 

[Sandisw]

While Sandi did not share the copy DVC sent her of the 2011 policy, she said it is similar to the 2008 policy, which very clearly did not make the 20 res rule the exclusive meaning of commercial enterprise. It has been stated many times by many lawyers that Disney does NOT have to spell out the exact distinction, only that they have adopted some policies which give guidelines to members…the foundational documents governing the time shares make clear Disney can prohibit all non-personal use. Disney has now decided renting points in excess of your annual dues is not personal use and therefore not permitted and there’s nothing preventing them from enforcing the interpretation (other than the very unlikely event of a court holding the restriction to be unreasonable, which only applies to the older resorts).

It doesn’t make any sense to read a new dues > income in addition to a “first 20 rentals OK” policy unless you think Disney actually wants to increase the amount and frequency of rentals (which is laughable).

I have chosen not to share the document publicly but I welcome anyone to request it from DVC the way that I did....however, it is clear that the policy is the 20 reservations rule.

Yes, they can add to it and it is not an exhaustive list...meaning, they can choose to give other actions, but whatever those actions are added as reasons can not directly conflict with this policy....

So, if it says "you can make as many as you desire" but if you want more than 20, then they have to meet certain conditions. I mentioned above that the addition of rental income to dues as an added definition of the policy certainly supports both, but I don't see how you can have a policy in place, and then pretty much not follow it?

If they are enforcing the multiple reservations rule below 20, then it is violating their own policy.....until such time they change it.

So, again, I do agree they can add to it, and expand to it, but they can not ignore what they are telling me as an owner I am allowed to do and it expressly says that I can have 20 reservations in a 12 month period....

Now, when they evaluate those 20, they can certainly decide too many look like rentals, or that the rental income appears to represent further commerical activity....but, canceling any reservations prior to me having 20? That simply doesn't support the language.

ETA: Nothing prevents DVC from reviewing anyone’s account at any time…but the policy indicates that reservations under 20, will be allowed to be made

 

[Brianstl]

While Sandi did not share the copy DVC sent her of the 2011 policy, she said it is similar to the 2008 policy, which very clearly did not make the 20 res rule the exclusive meaning of commercial enterprise. It has been stated many times by many lawyers that Disney does NOT have to spell out the exact distinction, only that they have adopted some policies which give guidelines to members…the foundational documents governing the time shares make clear Disney can prohibit all non-personal use. Disney has now decided renting points in excess of your annual dues is not personal use and therefore not permitted and there’s nothing preventing them from enforcing the interpretation (other than the very unlikely event of a court holding the restriction to be unreasonable, which only applies to the older resorts).

It doesn’t make any sense to read a new dues > income in addition to a “first 20 rentals OK” policy unless you think Disney actually wants to increase the amount and frequency of rentals (which is laughable).

They didn’t have to spell out the exact definition. I was on the record saying they shouldn’t in the earlier thread because it would box them in. They put in the POS that they had defined it and it was available on request. Sandi requested it and got it.

They can’t now claim you are violating that policy if it doesn’t fit their own definition of the act in that policy. Now they can change that definition, but until they make the fact they have changed the definition known to members they can’t enforce a policy using the new definition.

 

[Sandisw]

Just to be sure everyone is clear...I am reporting what I have been told by MS a few times now, is part of the policy for commerical purposes as well as posting what I was given by DVC in reference to a legal request. That the 2011 policy is the policy, which includes the ability of DVC to add other activity for commerical purposes...which is where the use of rental income not exceeding dues would come into play...

However, everyone is free to ignore the information....but, since this is what I was specifically told by DVC, I will continue to report it until such time that someone at DVC tells me that the MS supervisor who told it to me was not truthful.

If anyone has something from DVC that directly disputes what I was told by the MS supervisor (and others as MS) that DVC will not be using rental income in excess of dues as part of the enforcement, please share it!

ETA: Here is the clause in the 2011 policy that supports that DVC can add to the policy, including something like the use rental income exceeding dues as a basis for enforcement, along with the 20 reservations rule.

ETA2: For further transperency, DVC knows that I am the person who sent the certified letter as well because I was upfront and honest with them that I participate with the boards. They read these and I am sure they will contact me in response to my follow up email if this is not included.

 

[Sandisw]

So. I am against commerical renting. I own a lot of points. I have done a few rentals (4). But I have done ALOT of reservations for myself. In a 12 month period not counting anything cancelled/rebooked I have had 15 reservations. I am nowhere near a commercial renter and I think this 20 reservation rule is outdated for when people didnt go to the parks as often, when there was less resorts so not as many split stays. I have 3 trips where I did a split stay so I have 6 reservations for it. I have another trip where I booked 2 studios since a 2 bed was unavailable.

Is only reservations where a stay occurred that will be counted as 20 or will reservations made and then cancelled count, I assume not.

Edit to add I am not saying this isnt the rule, but rather I disappointed in that this is the rule as a large point holder who goes to the resorts alot.

I think the 20 reservations rule within a 12 month period, across all memberships is the threshold...you can make as many as you want up to and including 20. If you want more than 20, then you have to prove to DVC that none of the ones within 20 are rentals...they can only be for yourself, family or friends.

If you booked more than 20 and you can't satisfy that the first 20 were all for yourself, family and friends, then it says they can cancel the ones above it, or if you are calling in, they won't confirm that 21st reservation.

However, I think the information that I have been given about rental income not exceeding dues would be to allow them to further go after an owner for violating the commerical purposes clause....because they could say that your reservations within 20 appear to be in violation of the T & C that says "personal use is not frequently or regulary" renting.....

I do not read the policy to mean that they can cancel those below 20 unless they have further evidence that your pattern of rental activity within that 20 appears to be commerical...we know prior to renewed attention to this, DVC did not cancel or evaluate reservations within the first 20....as long as one never went above 20, no matter what was there, DVC left the reservations intact...

The biggest surprise to me was that this 2011 policy is still the policy as many thought it was gone....it is not but with the added information I have been given, it makes sense that DVC will combine other aspects to this.

Now, I did specifically ask if this policy is to change or be updated, if it has to be approved by the state. If I don't get a response to that email by the time I get back from my cruise...I'll be gone from July 9th to July 13th...then another certified letter will be sent to them.....

 

[VGCgroupie]

Now, I did specifically ask if this policy is to change or be updated, if it has to be approved by the state. If I don't get a response to that email by the time I get back from my cruise...I'll be gone from July 9th to July 13th...then another certified letter will be sent to them.....

Thank you again for following up.

Happy Cruising!!

 

[Cyberc1978]

So the 20 reservation rule is still in play after all these years.

I assume that since the policy about not being allowed to rent more than your dues worth is not included it’s not applicable….. yet.

Let’s assume that DVC by 1st of August changes the wording to include the wording to include you can’t rent for more than your dues worth Would that apply to ALL of your reservations including those made under the old policy or would it only apply to all new reservations going forward?

Let’s also assume the LLC mega renters have know about this policy all along and they frequently request it just to ensure they always stay on the “safe” side of things. They can’t claim anything when it comes to the 20 reservation rule as that is super old. But they can then it comes to the not being allow to rent more than dues worth.

Furthermore regarding the LLC’s would it be the actual owner of the LLC that DVC would have on file or would it be the officers? If it’s the latter then the owner could continue to create LLC’ with different officers to skirt the rules?

 

[Sandisw]

Thank you again for following up.

Happy Cruising!!

It will be fun! Its a Virgin Voyage cruise...same one I sailed on in Feburary! Adult only cruise and lots and lots of fun.

I am still hopeful that more people will contact and write DVC to ask them to give us more information because I do think the more they hear from owners, the more likely we are to get even more info!!!

 

[Mouseforward]

So that Section 8 posted makes it more clear, this is a board approved policy for only one type of account activity that will flag you as commercial. They make it clear that is not the extent of activities that will deem you commercial.

We also know this because they in other areas in the POS, the check box , and contracts mention

1. Advertising or creating a website.
2. A pattern of buying and reselling resale contracts.
3. Transferring points for $

 

[Mouseforward]

It will be fun! Its a Virgin Voyage cruise...same one I sailed on in Feburary! Adult only cruise and lots and lots of fun.

I am still hopeful that more people will contact and write DVC to ask them to give us more information because I do think the more they hear from owners, the more likely we are to get even more info!!!

Loved my Virgin Cruise last October ( other than weather) - For anyone fun, who is a solo traveler , Virgin has the level of inclusive items of Disney , but significantly better deals for solo sailors. And the food was great.

 

[ShaneDJ]

Michael Scott: "Explain this to me like I'm five."

I need it simple as to what a member can do with regards to renting their points.


From the great work that Sandi has done, this is my understanding:

1. A DVC member can rent out up to 20 total reservations per year (for rental income purposes)

2. That rental income cannot exceed your annual dues


NOTES:

• The "20 total reservations" (per any 12 month period) includes both personal use or gift use (non-revenue generating) reservations...and any reservations used to rent points (to generate income).
• We are allowed to rent DVC points to cover the cost of annual dues.
• You can make as many reservations as you want (up to 20) per year, and these reservations can be for yourself or renters. But the rental income cannot exceed the cost of annual dues.

If any of the above is wrong, please let me know and I'll correct it.

 

[Sandisw]

So the 20 reservation rule is still in play after all these years.

I assume that since the policy about not being allowed to rent more than your dues worth is not included it’s not applicable….. yet.

Let’s assume that DVC by 1st of August changes the wording to include the wording to include you can’t rent for more than your dues worth Would that apply to ALL of your reservations including those made under the old policy or would it only apply to all new reservations going forward?

Let’s also assume the LLC mega renters have know about this policy all along and they frequently request it just to ensure they always stay on the “safe” side of things. They can’t claim anything when it comes to the 20 reservation rule as that is super old. But they can then it comes to the not being allow to rent more than dues worth.

Furthermore regarding the LLC’s would it be the actual owner of the LLC that DVC would have on file or would it be the officers? If it’s the latter then the owner could continue to create LLC’ with different officers to skirt the rules?

You are correct that this document has not be updated to include official written policy that they will be using rental income above dues as enforcement....however, it doesn't have to be offiically added as a metric because of the clause I mentioned above that gives DVC the right to add things to the list of what makes it commerical.

So, IMO, it still can be applicable because that specific action would fit into the T & C that says "personal use is not frequently or regularly" renting and they can say to an owner that they level of renting it appears one is doing would exceed your dues and we consider that commerical activity.....

There had been a lot of discussion that this policy was gone and its clear it is not.....again, can they update it at any time? Of course, but my understanding of FL 721, it would be considered an amendement to policy and have to go to the state for approval..which takes somewhere between 30 to 45 days?

If it was offiically amended, that docuemnt would be public record....and then would become the official document on file with DVC that owners could request, like I did to get this one.

Given that they worked on this for 6 months, and this document was not amended, leads me to speculate that either they didn't think about amending it, don't plan on amending it, or are in the process of doing such....I think we should be watching the comptrollers site for it!

For LLCs, remember, they are limited to who can be on reservations so DVC's ability to monitor and enforce against them can have nothing to do with the commerical purpose clause. They are only allowed to use their membership for officers, director, employees, etc....so, if they are looking at the reservations on a membership owned by an LLC, they could decide that there are too many reservations with too many different names that makes them believe its being used for people other than the list of people the contract says can use them....and then force the LLC to provide documentation that the guests are indeed part of the LLC.

Personally, I think that in the past, DVC has not enforced this clause at all, and hopefully, they will now....but, nothing in the 2011 policy prevents them from adding to the reasons they use to support their case that the owner is engaged in commerical activity across all memberships they have a stake in.

They just can't do something that is in direct conflict with the policy as written...so, since the 20 reservations rule is still the policy, I do not think it gives DVC the right to enforce anything against an owner until they have 20....but, once they do, they can use whatever other metrics they want to say your activity looks like you are a commerical enterprise.

One thing I noticed today when reviewing the HRR, that I had completely forget about was this:

DVC Operator may prohibit a Transfer, not permit a reservation to be made (or cancel a reservation already made) with Transferred Home Resort Vacation Points, or suspend or terminate a Club Member’s right to Transfer if DVC Operator determines, in its discretion, that the Transfer activity is for commercial purposes.

I believe this was part of the new rules, so this alone is going to impact those try to transfer points as a way to get more to rent and or the whole "strip and flip" rule.

 

[VGCgroupie]

So. I am against commerical renting. I own a lot of points. I have done a few rentals (4). But I have done ALOT of reservations for myself. In a 12 month period not counting anything cancelled/rebooked I have had 15 reservations. I am nowhere near a commercial renter and I think this 20 reservation rule is outdated for when people didnt go to the parks as often, when there was less resorts so not as many split stays. I have 3 trips where I did a split stay so I have 6 reservations for it. I have another trip where I booked 2 studios since a 2 bed was unavailable.

Is only reservations where a stay occurred that will be counted as 20 or will reservations made and then cancelled count, I assume not.

Edit to add I am not saying this isnt the rule, but rather I disappointed in that this is the rule as a large point holder who goes to the resorts alot.

I just recounted. I am at 16 not 15 reservations. I almost booked a stay today, but then didnt. I am glad I didn't, now Disney wont get that DLR ticket money from me.. With the 20 reservation rule I am actually 2nd guessing my choice to buy another contract.

 

[Brianstl]

I think the 20 reservations rule within a 12 month period, across all memberships is the threshold...you can make as many as you want up to and including 20. If you want more than 20, then you have to prove to DVC that none of the ones within 20 are rentals...they can only be for yourself, family or friends.

If you booked more than 20 and you can't satisfy that the first 20 were all for yourself, family and friends, then it says they can cancel the ones above it, or if you are calling in, they won't confirm that 21st reservation.

However, I think the information that I have been given about rental income not exceeding dues would be to allow them to further go after an owner for violating the commerical purposes clause....because they could say that your reservations within 20 appear to be in violation of the T & C that says "personal use is not frequently or regulary" renting.....

I do not read the policy to mean that they can cancel those below 20 unless they have further evidence that your pattern of rental activity within that 20 appears to be commerical...we know prior to renewed attention to this, DVC did not cancel or evaluate reservations within the first 20....as long as one never went above 20, no matter what was there, DVC left the reservations intact...

The biggest surprise to me was that this 2011 policy is still the policy as many thought it was gone....it is not but with the added information I have been given, it makes sense that DVC will combine other aspects to this.

Now, I did specifically ask if this policy is to change or be updated, if it has to be approved by the state. If I don't get a response to that email by the time I get back from my cruise...I'll be gone from July 9th to July 13th...then another certified letter will be sent to them.....

The board can most certainly promulgate additional rules or change how the define the different commercial terms, but they will make them available upon request of members before the go into force.

I think you are exactly correct about the 20 reservation number before they start looking at the income compared to dues. If you have under 20 reservations they won’t be investigating that at this time. The important section from the POS is this “The association has adopted a policy regarding what constitutes commercial enterprise, practice or purpose……”. If it doesn’t fit the definition under that policy, it doesn’t constitute of violation of their policy. That means you have to hit the 20 number then the other things come into play.

If you keep it under 20 you are most likely safe making a profit at least for now.

 

[HyperspaceMountainPilot]

So that Section 8 posted makes it more clear, this is a board approved policy for only one type of account activity that will flag you as commercial. They make it clear that is not the extent of activities that will deem you commercial.

We also know this because they in other areas in the POS, the check box , and contracts mention

1. Advertising or creating a website.
2. A pattern of buying and reselling resale contracts.
3. Transferring points for $

I think this is generally correct. Section 8 gives DVC the ability to take other actions to stop commercial enterprise activity without amending or creating a new policy, which is in an inherent right under the POS, so long as the action is reasonable.

Based on information provided, the most reasonable assumption is that either 20 reservations OR renting more income than the value of your total dues will cause Disney to review and hopefully take action against people who can’t prove they aren’t commercial renters. I would like to see them replace the 20 reservation rule in favor of a percentage of total points, but who knows what they will actually do.

 

[Sandisw]

Michael Scott: "Explain this to me like I'm five."

I need it simple as to what a member can do with regards to renting their points.


From the great work that Sandi has done, this is my understanding.

1. A DVC member can rent out up to 20 total reservations per year (for rental income purposes)

2. That rental income cannot exceed your annual dues


NOTES:

• The "20 total annual reservations" includes both personal use or gift use (non-revenue generating) reservations...and any reservations used to rent points (to generate income)
• We are allowed to rent DVC points to cover the cost of annual dues

If any of the above is wrong, please let me know and I'll correct it.

One small clarification...the 20 reservation rule is not defined as being rentals.....it says you can make as many reservations as you want up to 20...so that can be for you, yourself or renters...across any or all of your memberships. Everything counts....

However, I think the added information that I have been given by DVC about rental income not exceeding dues would be an added measure of commerical activity to support what is happening with those 20 reservations. And, the last clause of the 2011 policy gives them that right....

To me, this is what is different than how they have enforced in the past...they pretty much ignore members who had 20 or less....now, I think they will review memberships at 20 and maybe even monitor them more closely if it looks like an owner could be doing something out of sync...

So, here is how I sum it up (until we have evidence from DVC that my information about rental income in the amount of dues is wrong).

1. You can make up to 20 reservations in any 12 month period for anyone you want (unless you are an LLC and then the POS defines who can be on those.

2. If you want to have more than 20, then none of the first 20 can be rentals...only yourself, family and friends.

3. If you do hit 20, then be prepared for DVC to review how many look like rentals and if it looks like the potential income would exceed dues...be prepared for DVC to act or give you a chace to dispute it....

Prior to receiving the document, and the way that the MS supervisor conveyed things to me was that ONLY rental income above dues would count...but now that we know that the 2011 policy is still in play, I think both are in play because one is specifically the policy and the other is fits into the clause about that not being the exhaustive list of what makes it commerical.