Commerical Use Policy Update - New Thread!

[muppets3d]

If I am understanding things correctly the major change is that the 20 reservations limit is now across all memberships your name is on where as before it was only per membership. Now this is a big change but will it hit commercial renters or regular owners more?

I have 5 different memberships because I have bought different UY and when my daughter turned 18 I started adding her to our contracts. Each of those things caused different membership numbers, not because I was trying for different memberships. Having different memberships is a bit of a pain.

Anyone know a commercial renters and how they have structured their memberships and buisness. Anyone want to take a guess. I kind of feel that anyone running this as a business is going to figure out how to stay under the radar even with this change.

On the bright side my VDH contract was okayed by DVC so I was able to book my April 2026 trip to DL, first visit in over 15 years.

If DVC really uses intelligence and digs into the owners of the LLCs etc, it would make it pretty much impossible to run a profitable rental business if you can only do 20 rentals a year total. A small-time outfit of an owner of a few thousand points could make a decent living I guess, but not the "huge" DVC rental businesses as we know them today.

 

[Sykes]

If they want to prevent owners from getting to 20, then I do rhink they would be required to change that wording.

IMO, that is not accurate, but we've been around the bend enough here that it's really not worth rehashing too much. The commercial use policy that you referenced just says that if you reach 20 then they are allowed to automatically presume that you are violating the commercial use policy, even if they have no other evidence of commercial use. There is nothing that stops them from determining that someone is operating a commercial enterprise before reaching 20 reservations if they have meaningful evidence of it.

 

[Tatebeck]

IMO, that is not accurate, but we've been around the bend enough here that it's really not worth rehashing too much. The commercial use policy that you referenced just says that if you reach 20 then they are allowed to automatically presume that you are violating the commercial use policy, even if they have no other evidence of commercial use. There is nothing that stops them from determining that someone is operating a commercial enterprise before reaching 20 reservations if they have meaningful evidence of it.

Yep, definitely agree with this. There is plenty of wording and disclaimers at the beginning and end of the multiple reservation rule that make it clear that this is simply one rule of many and is only dealing with the number of reservations. So it basically boils down to something like:

A member can make as many reservations as they want (as long as they are also following all the other rules, regulations, and guidelines) but once a member books over 20 reservations in any 12 month period, DVC will assume they are commercial reservations and block the additional reservations above 20 unless/until the member proves that all of the first 20 reservations were for personal use

They 100% did NOT hamstring themselves for reservations 1 through 20, and it's clear that all other rules must be followed in addition to this one single rule purely dealing with the number of reservations made

 

[DVCPAT]

DVC/Disney is not getting hotel revenue with rentals at all right now, so if they can capture even a small percentage of ex-rental revenue then that's money in the bank for them. Even if 95% of those ex-rental guests choose to stay offsite and only 5% book direct, that's 5% they didn't get before.

If Disney was concerned about lost revenue in a sold out DVC resort, they wouldn’t have allowed renting at the start.
I think disney wants to make an attempt to please the members that can’t secure standard view rooms…they can get pretty creative in ways to increase revenue.

 

[Sandisw]

I didn’t mean to imply otherwise—but if your current interpretation of Disney’s policy is accurate such that they can’t stop commercial renters before a 21st reservation (which is contrary to my own legal analysis of the POS but don’t intend to relitigate once again), Disney would be tacitly approving the first 20 rentals for profit without any personal, which could easily be over 10,000 points a year.

Editing to address your edit—“I know you believe that the current policy of 20 is too high, but isn’t still up to the board to choose what that definition is?”— no, absolutely not. If the board is allowing 100% of points to be rented over 10,000 points a year, it has not adopted a reasonable definition commercial renting and is failing to uphold its enforcement duties under the POS. Whether or not current owners “are happy” in their ignorance of how much commercial activity is taking place, does not stop it from being a breach of fiduciary duty.

I value my relationship with Disney and have managed to make my own ownership work within the rules of the current system (including by refusing to by BWV for my personal use and always booking VGC and BCV at 11mo) so I’m not going to sue them to enforce, but I bet there are other plaintiffs lawyer-owners who may be reading updates and gearing up a suit either on behalf of DIS shareholders or member/owners for the current state if Disney is truly not enforcing anything at all or only at 20+, when that means thousands of point contracts are always rentals, year after year.

Responding to your edit…lol

We definitely are in agreement that the board should have reasonable definition of commercial purpose.

The contract uses the word commercial enterprise so for me, it should be a pretty high threshold and probably why I think the current policy and some of the other info I have fits as reasonable.

But. I also think that to stay that way, DVcMC needs to actually enforce it.

 

[muppets3d]

If Disney was concerned about lost revenue in a sold out DVC resort, they wouldn’t have allowed renting at the start.
I think disney wants to make an attempt to please the members that can’t secure standard view rooms…they can get pretty creative in ways to increase revenue.

Lots of things are happening in the world today that Disney or DVC could never have foreseen in the late 80's early 90's when what is now known as Old Key West, and thus the blueprint for the DVC program, was being designed. Resorts that have gone online in recent years have much stronger anti-renting language in the contracts.

 

[Sykes]

An important part of the 2008 commercial use policy that is often omitted when it has been shared is the following text at the end:

"This policy is not intended, and shall not be deemed, either (i) to constitute an exclusive act or statement by the Association regarding any breach of the commercial activity prohibitions set forth in the Declaration of Condominium and Membership Agreement, or (ii) to be an exhaustive list of all activities that shall be deemed to be commercial activity. Accordingly, the Association reserves the right to promulgate such additional rules or to take such additional actions or measures as it deems appropriate with respect to any breach of such prohibitions."

I'd argue that this text is mostly unnecessary--it seems clear to me from reading the rest that the 20 reservation limit is not intended to be the only allowed measure of commercial activity--but it does make that even more clear.

 

[Sandisw]

IMO, that is not accurate, but we've been around the bend enough here that it's really not worth rehashing too much. The commercial use policy that you referenced just says that if you reach 20 then they are allowed to automatically presume that you are violating the commercial use policy, even if they have no other evidence of commercial use. There is nothing that stops them from determining that someone is operating a commercial enterprise before reaching 20 reservations if they have meaningful evidence of it.

Realistically I think it would be pretty hard for anyone who is truly owns DVC for a commercial purpose not to hit 20 across all memberships they have a connection to.

But, I understand your point…

 

[Sandisw]

An important part of the 2008 commercial use policy that is often omitted when it has been shared is the following text at the end:

"This policy is not intended, and shall not be deemed, either (i) to constitute an exclusive act or statement by the Association regarding any breach of the commercial activity prohibitions set forth in the Declaration of Condominium and Membership Agreement, or (ii) to be an exhaustive list of all activities that shall be deemed to be commercial activity. Accordingly, the Association reserves the right to promulgate such additional rules or to take such additional actions or measures as it deems appropriate with respect to any breach of such prohibitions."

I'd argue that this text is mostly unnecessary--it seems clear to me from reading the rest that the 20 reservation limit is not intended to be the only allowed measure of commercial activity--but it does make that even more clear.

And it does say they can add more and it’s not an exhaustive list but if you are correct and then can set a policy and then not actually make that the policy , then I don’t know what prevents them from doing that with any other written rules where it gives them the right to add or amend.

Regardless, DVC gets to interpret and enforce the 2011 policy that is the offical one so really, it doesn’t matter what my interpretation is except for my own membership.

 

[Sykes]

Realistically I think it would be pretty hard for anyone who is truly owns DVC for a commercial purpose not to hit 20 across all memberships they have a connection to.

But, I understand your point…

I think as a practical matter they also wouldn’t bother going after the small fish—the effort vs. impact isn’t really worth it. It may be a bit pedantic, but I don’t like trying to define bright lines where they don’t really exist.

 

[Sandisw]

If I am understanding things correctly the major change is that the 20 reservations limit is now across all memberships your name is on where as before it was only per membership. Now this is a big change but will it hit commercial renters or regular owners more?

I have 5 different memberships because I have bought different UY and when my daughter turned 18 I started adding her to our contracts. Each of those things caused different membership numbers, not because I was trying for different memberships. Having different memberships is a bit of a pain.

Anyone know a commercial renters and how they have structured their memberships and buisness. Anyone want to take a guess. I kind of feel that anyone running this as a business is going to figure out how to stay under the radar even with this change.

On the bright side my VDH contract was okayed by DVC so I was able to book my April 2026 trip to DL, first visit in over 15 years.

There are two things I think that are in play for DVC. The first is the LLC's and how to enforce the clause about who can use those memberships.

Technically, it appears to me that they can deal with them without even using the commerical purpose clause or policy.

Its not just multiple memberships but any points that the owner is associated with that is capped at the 20 reservations limit based on the current official policy.

So, personal, joint, etc all count....so, just having 5 memberships doesn't impact the total points you are associated with.. even if they were all in one, it would be the same limit...20...

Then it comes to enforcement and what DVC decides to do when looking at a membership to decide it appears to be a pattern of rental activity that rises to the level its a commerical enterprise.

This policy definitely gives them the ability to cancel any above 20 because its says that "shall presume" you are in violation of using vacation points for commerical purposes, unless you prove to their satisfaction they are all personal.

However, it would still be up to DVC to decide if the information provided them by the owner was good enough to not cancel if they see more than 20....I am not even going to speculate as to what they might actually do.

But, I do believe that DVC, based on their own statements, do not want to stop the average owner from using their membership for themselves, family and friends, and renters within reason.

 

[Sandisw]

I think as a practical matter they also wouldn’t bother going after the small fish—the effort vs. impact isn’t really worth it. It may be a bit pedantic, but I don’t like trying to define bright lines where they don’t really exist.

Like I said, I hope that they don't have the ability to do something that seems to contradict a policy or rule, in the strictest sense, without actually being required to make the language match.

 

[lowlight]

If Disney was concerned about lost revenue in a sold out DVC resort, they wouldn’t have allowed renting at the start.
I think disney wants to make an attempt to please the members that can’t secure standard view rooms…they can get pretty creative in ways to increase revenue.

This point keeps coming up, and I feel that it cheapens the impact of commercial renting and spec renting in particular. The issue of commercial spec renting is inclusive of, but not exclusive to, being unable to secure standard view rooms because bots, LLC's, ne'er do wells, etc. hoard them up, walk them, etc. The issue can be resort wide at certain times of the year where the demand is high and the points are low (early December, and a few others). Making it sound as if it's limited to such a small group of rooms and members is not being honest about the issue owners are facing.

 

[Cyberc1978]

If I am understanding things correctly the major change is that the 20 reservations limit is now across all memberships your name is on where as before it was only per membership. Now this is a big change but will it hit commercial renters or regular owners more?

I have 5 different memberships because I have bought different UY and when my daughter turned 18 I started adding her to our contracts. Each of those things caused different membership numbers, not because I was trying for different memberships. Having different memberships is a bit of a pain.

Anyone know a commercial renters and how they have structured their memberships and buisness. Anyone want to take a guess. I kind of feel that anyone running this as a business is going to figure out how to stay under the radar even with this change.

On the bright side my VDH contract was okayed by DVC so I was able to book my April 2026 trip to DL, first visit in over 15 years.

The funny part is that it’s not a change, the 20 reservations rule across memberships have been there since 2011 - the enforcement however has been lacking as in nonexistent.

Regarding your VDH contract did DVC try to stop you or weren’t they okay with you buying or how should I understand that part?

 

[mkatsy]

Interesting ... the national park service was plagued by "walkers" (who knew it existed outside of our little world) and they instituted a policy to stop it.

Why Does the Waiting Period for Modifications and Cancellations Exist?​

The Waiting Period for Modifications and Cancellations prevents those customers who have confirmed reservations from continuously extending their reservations before other customers have a chance to book the newly available sites. It ensures that newly released campsites are available to everyone before an existing reservation can “slide” into it. This rule is necessary to ensure fairness to all campers to have a chance at securing a campsite at highly coveted locations.

For reservations that include dates beyond the end of the available booking window, you are not able to make changes or cancel your reservation until four days after the site is available to the general public. For more information, please read the No Modification Rule for Reserved Nights Beyond the Booking Window Help Center article.

 

[DougEMG]

If DVC really uses intelligence and digs into the owners of the LLCs etc, it would make it pretty much impossible to run a profitable rental business if you can only do 20 rentals a year total. A small-time outfit of an owner of a few thousand points could make a decent living I guess, but not the "huge" DVC rental businesses as we know them today.

Did DVC stop enforcing the 20 reservations limit at some point.

 

[DougEMG]

The funny part is that it’s not a change, the 20 reservations rule across memberships have been there since 2011 - the enforcement however has been lacking as in nonexistent.

Regarding your VDH contract did DVC try to stop you or weren’t they okay with you buying or how should I understand that part?

That was my poor attempt at humour. Some people here probably think I rent too many points. I just got the email from DVC saying they had approved my purchase and my points would be loaded into my account shortly. There were no problems with buying it all all.

 

[DougEMG]

This point keeps coming up, and I feel that it cheapens the impact of commercial renting and spec renting in particular. The issue of commercial spec renting is inclusive of, but not exclusive to, being unable to secure standard view rooms because bots, LLC's, ne'er do wells, etc. hoard them up, walk them, etc. The issue can be resort wide at certain times of the year where the demand is high and the points are low (early December, and a few others). Making it sound as if it's limited to such a small group of rooms and members is not being honest about the issue owners are facing.

I think DVC is correct that it is a small problem in regards to (1) the number of owners vrs commercial owners and (2) the number of points being used commercially compared to the total points in the system.

It is just that the impact is high because those points are targetting specific rooms.

Even when I first bought BWV in 2011 I would walk my standard studio because I wanted to make sure I got the room I wanted at the time I wanted. Back then there was no talk around it being commercial renters causing that problem. It was us BWV owners causing the problem. But I also own SSR and there is never any problem getting a room there back then or now.

Spec renters are what the problem is and it doesn’t matter if that is an owner doing it to maximize their income or a commercial business doing it. Someone else had what I thought was an excellent description of the problem this causes because of ‘ghost’ reservations. Someone else really there should be some kind of limit around how many times you are allowed to make a lead guest change on your account.

 

[Mouseforward]

DVC/Disney is not getting hotel revenue with rentals at all right now, so if they can capture even a small percentage of ex-rental revenue then that's money in the bank for them. Even if 95% of those ex-rental guests choose to stay offsite and only 5% book direct, that's 5% they didn't get before.

Everyone keeps bringing up lost hotel revenue, assuming Disney corporate is somehow competing with DVC renters. But that’s not really how it works.

If Disney truly saw DVC rentals as competition with its own hotel bookings, properties like Big Pine Key (BPK) or Poly Island Tower (PIT) would never have happened—they would have remained hotels, or reopened, as traditional cash-only hotels.

BPK is the best example: Walt Disney World’s hotel division effectively said, “We can’t reliably book these rooms at profitable rates, so it’s better to lease them to Disney Vacation Development (DVD) for the next 40 years.” In doing so, WDW Hotels got an upfront lease payment for the property, and the DVD division earned revenue selling decades’ worth of reservations through DVC points.

As long as the points for those rooms are sold, DVD has already been paid for renting out that room for 40 years in advance. And since both DVD and WDW Hotels are under the same corporate umbrella, the Walt Disney Company benefits either way.

Some argue Disney could earn $1,000 per night from cash guests in those rooms—but the economic reality is they weren’t getting that consistently before converting properties like BPK to DVC. Instead, Disney secured, say, $30,000 upfront for renting the same room for the same week each year over 40 years, plus they effectively offloaded staffing and maintenance costs to DVC owners through dues.

And if the rooms sit empty, it’s Walt Disney World’s parks and restaurants that care more, since DVC members or renters are highly likely to visit the parks and dine on property—generating revenue elsewhere.

Does Disney care whether it’s a DVC owner or a renter occupying the room? Not really. The room was already sold for the next 40 years, and Disney’s profit came when the points were originally purchased. As long as a park going, restaurant eating ,warm body is in the room they make the same money.

Considering Disney keeps building new DVC properties and converting existing hotels into timeshares, it’s clear they prefer this model.

Contrast that with Universal, which partners with Loews Hotels to build and manage its signature resorts. Neither company aggressively pursues luxury hotel cash rentals as a primary revenue driver the way people often assume Disney does.

 

[Sandisw]

This point keeps coming up, and I feel that it cheapens the impact of commercial renting and spec renting in particular. The issue of commercial spec renting is inclusive of, but not exclusive to, being unable to secure standard view rooms because bots, LLC's, ne'er do wells, etc. hoard them up, walk them, etc. The issue can be resort wide at certain times of the year where the demand is high and the points are low (early December, and a few others). Making it sound as if it's limited to such a small group of rooms and members is not being honest about the issue owners are facing.

Do you really not think it depends on how owners view the rental market or the experiences they have in whether this as a big or small problem?

Even in our small group here on the DIS, there is no consensus on what should be considered commercial renting or whether the rental market is made up of a lot of commercial renters vs a lot of average owners renting occasionally.