Commerical Use Policy Update - New Thread!

[Sykes]

If DVCs offical policy says it takes a certain number of reservations before one is considered to be commercial purpose, or enterprise, then yes.
...
You are free to interpret the way you do, and i have always said that each owner has to decide how they view and interpret the contract absent of clear answers from DVC.

In several posts your language has conveyed your interpretation that they have absolutely 0 enforcement ability until someone hits 20 reservations as fact rather than opinion, but the text of the policy that has been posted here (and elsewhere) says nothing of the sort--in fact, nothing even remotely close to that. It just lists one specific situation where Disney is allowed to automatically assume that the activity is commercial. It doesn't limit Disney to only using that metric (and explicitly says as much), nor should it (because no corporation in its right mind would choose to limit itself in that way).

It's possible that the version you alone have says something different, but I guess we won't know unless someone else requests the policy.

One thing that is becoming abundantly clear is that Disney wants us to believe that a lot of forms of renting are not allowed, even if that is not the official policy they plan to enforce. Because of that, I'd wager that Disney's lawyers would disagree with your interpretation of how limited their ability is to enforce the commercial use restrictions under the current policy. Or it's possible that MS is just lying through their teeth. (I know which option Occam's Razor points to.)

 

[Girlstar30]

So under Florida law, could they do away with renting to strangers if the majority of the board votes for it?

 

[LoveToDisney]

I have to say I have been fascinated reading these related threads. It certainly becomes obvious where people stand regarding renting. We bought a long time ago when Beach Club was actively selling and almost immediately realized our first 160pt purchase was not enough. We gradually added more points at BCV and other resorts that we liked and finally settled on the number of points we have. Whenever I have points that I can’t use within my use year, I BANK them into the next use year. I’m always able to use those leftover points first along with more points from the current year and if necessary some of next use year. I’m usually delighted that I can bank some points because that gives me more options the next use year. We are conservative and only wish to pay for maintenance on points we can use so we didn’t overbuy. We could afford to purchase more but never imagined buying additional points to rent like the current situation is. Back then, before SoMe became a thing, one bought with the intent to USE your points for yourself and family, not rent. When the contract said one could rent, it meant at the time to us that someone got sick or something unforeseen happened so you could not use your points AND banking them was also not going to work. Even with occasional illness, banking has always been enough and no need to rent out points. I understand it would be different with loss of job or prolonged illness.

 

[supersnoop]

So under Florida law, could they do away with renting to strangers if the majority of the board votes for it?

I haven't read the POS in a while, so take this with a grain of salt (or trust the people who correct me later).

This type of change would require a membership vote. But we automatically assign our voting rights to the board. But they have a fiduciary responsibility to us. So, if they did vote to take it away, they could face a backlash, which results in the AG getting involved, which results in a lawsuit which could strip Disney of board seats, which is something they really wouldn't want to happen.

Basically, if the board does not work in the member's best interest, they could lose control. They walk a fine line and I'm not sure they want to risk it, considering the political environment in Florida.

 

[JackosinDIS]

In several posts your language has conveyed your interpretation that they have absolutely 0 enforcement ability until someone hits 20 reservations as fact rather than opinion, but the text of the policy that has been posted here (and elsewhere) says nothing of the sort--in fact, nothing even remotely close to that. It just lists one specific situation where Disney is allowed to automatically assume that the activity is commercial. It doesn't limit Disney to only using that metric (and explicitly says as much), nor should it (because no corporation in its right mind would choose to limit itself in that way).

It's possible that the version you alone have says something different, but I guess we won't know unless someone else requests the policy.

One thing that is becoming abundantly clear is that Disney wants us to believe that a lot of forms of renting are not allowed, even if that is not the official policy they plan to enforce. Because of that, I'd wager that Disney's lawyers would disagree with your interpretation of how limited their ability to enforce the commercial use restrictions under the current policy. Or it's possible that MS is just lying through their teeth. (I know which option Occam's Razor points to.)

I have to disagree with your view on this. If you go back a few steps:

1. The POS permits use of the units as a vacation home for the owner and their lessees.
2. The POS prohibits use for commercial purpose, which is clarified by saying this includes regular or frequent renting that could be deemed to constitute a commercial enterprise.
3. The POS then goes on to say the DVC has adopted a policy of what constitutes a commercial enterprise.
4. That policy is specifically that they deem a commercial enterprise to be in existence where there are more than 20 reservations and the first 20 are not only the owner, family or friends.

If the multiple reservation rule has not been satisfied, then DVC cannot establish, according to its own policy, that the pattern of rental activity constitutes a commercial enterprise.

It would be farcical to set a policy to determine a question and then not follow that policy.

 

[Girlstar30]

I haven't read the POS in a while, so take this with a grain of salt (or trust the people who correct me later).

This type of change would require a membership vote. But we automatically assign our voting rights to the board. But they have a fiduciary responsibility to us. So, if they did vote to take it away, they could face a backlash, which results in the AG getting involved, which results in a lawsuit which could strip Disney of board seats, which is something they really wouldn't want to happen.

Basically, if the board does not work in the member's best interest, they could lose control. They walk a fine line and I'm not sure they want to risk it, considering the political environment in Florida.

And who chose this board, im assuming Disney?

There will definetely be a lot of backlash, but they're definetely cooking something

 

[Sykes]

4. That policy is specifically that they deem a commercial enterprise to be in existence where there are more than 20 reservations and the first 20 are not only the owner, family or friends.

If the multiple reservation rule has not been satisfied, then DVC cannot establish, according to its own policy, that the pattern of rental activity constitutes a commercial enterprise.

It would be farcical to set a policy to determine a question and then not follow that policy.

But the 2008 policy itself says otherwise very directly:

"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."

Again, it's possible that the 2011 policy is different and Disney for some reason left similar clauses out, but I don't know one way or another. But in every version I've seen, the policy just enumerates one very specific situation in which they are allowed to automatically presume commercial use, which is necessary because it allows them to apply that standard absent any other indications of commercial use. There is no reason to believe that they are not still allowed to use their reasonable judgment to identify other situations where someone is violating the personal use requirement.

 

[JackosinDIS]

But the 2008 policy itself says otherwise very directly:

"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."

Again, it's possible that the 2011 policy is different and Disney for some reason left similar clauses out, but I don't know one way or another.

Yes, but don’t forget that the ‘commercial activity prohibitions’ in the POS also cover a wide range of activities which are everything other than the ‘use of the units as vacation accommodation’.

There are a huge number of other activities that would constitute commercial activities… using the unit as a shop, a restaurant, as a film set etc etc.

This specific policy is narrowly defined to elaborate on what DVC considers to be a level of renting that constitutes a ‘commercial enterprise’.

I agree, it also gives them leeway to make additional future policies, but until they do, it is the only policy.

 

[Sandisw]

In several posts your language has conveyed your interpretation that they have absolutely 0 enforcement ability until someone hits 20 reservations as fact rather than opinion, but the text of the policy that has been posted here (and elsewhere) says nothing of the sort--in fact, nothing even remotely close to that. It just lists one specific situation where Disney is allowed to automatically assume that the activity is commercial. It doesn't limit Disney to only using that metric (and explicitly says as much), nor should it (because no corporation in its right mind would choose to limit itself in that way).

It's possible that the version you alone have says something different, but I guess we won't know unless someone else requests the policy.

One thing that is becoming abundantly clear is that Disney wants us to believe that a lot of forms of renting are not allowed, even if that is not the official policy they plan to enforce. Because of that, I'd wager that Disney's lawyers would disagree with your interpretation of how limited their ability is to enforce the commercial use restrictions under the current policy. Or it's possible that MS is just lying through their teeth. (I know which option Occam's Razor points to.)

I have always said that I believe that the way the rule is written (and the analysis that I have done with others versed in contract law) is that they can not cancel reservations until someone reaches the 20 reservations threshold because of the language.

They can review, they can put someone on notice that they risk cancelations if they get to 20 based on what they are seeing

I have said others disagree with me, but that the only ones interpretation that matters is DVCs and to date, everything that I have gottetn from DVC, in writing, and through my conversations, seems to support my reading of it....

Obviously, you disagree, and if we get evidence that DVC is indeed interpreting it your way, and canceling reservations or locking owners out of their accounts, when they have less than 20 reservations in play, then it means that my interpretation does not match DVCs.

We know that in the past, DVC's interpretation matched mine....they allowed all reservations within 20 to stand and only those above 20 were canceled....which is exactly what the policy states will happen.

If we don't get something more from DVC either in written rules changes or enforcement stories, then its just as possible that the DVC lawyers have weighed in and that enforcement without policy changes would be needed if they want to take a stricter approach.

All we know is that DVC could have...and may still....change this policy since its from 2011....there is a reason they have not yet done it and the obvious reason could simply be that they have decided that holding 20 reservations across all memberships one is attached to is a reasonable level of reservations in the names of others.

Let's be fair...your take would allow DVC to see 5 resservations in the names of others, decide that is commerical and cancel, even though the policy and the POS says "you can make as many reservations as you want"? without actually having to communicate that to owners that counts as commerical?

I have said...they can decide to define it any way they believe fits the contract and the law, but I don't agree they get to set a policy in place and then act in direct conflict of that policy because they said it can be other things, but then keep those other things secret and kept from owners when asked.

ETA: Again, the POS states that "the board has adopted a policy on what constitutes commerical enterprise, practice or purpose and as an owner, I am entiteled to review it.

If what they sent me is not all of it....because of the clause regarding it not being an exhaustive list....then they didn't provide me with what the POS entitles me to...as I said, I asked for everything, including anything else that would be in existence that would be covered under the clause about it not being exhaustive....the response I got was I was given everything but with the caveat that rules may change.

So, if they have other policies in place that are not written in the 2011 document that they use, then those would be a record of the association as well and should be provided to owners who request them....so far, they have stated that only this is the official policy....

 

[Sykes]

There’s no need for a revised policy or additional language because the POS already gives the board discretion to use its reasonable judgment to identify violations of the personal use requirement. There is no reason to rehash that in the commercial use policy when it is already enumerated in the POS (and, in fact, doing so would introduce opportunities for inconsistencies between the documents). I would only expect them to revise the commercial use policy if they anticipate enforcing the restrictions in a way that the dictionary or contract law definitions of “personal use” or “commercial use” don’t already give them the power to do so (such as the presumption that 20 reservations are commercial).

 

[Sandisw]

There’s no need for a revised policy or additional language because the POS already gives the board discretion to use its reasonable judgment to identify violations of the personal use requirement. There is no reason to rehash that in the commercial use policy when it is already enumerated in the POS (and, in fact, doing so would introduce opportunities for inconsistencies between the documents). I would only expect them to revise the commercial use policy if they anticipate enforcing the restrictions in a way that the dictionary or contract law definitions of “personal use” or “commercial use” don’t already give them the power to do so (such as the presumption that 20 reservations are commercial).

We can agree to disagree and wait to see which interpretation DVC seems to be taking.

ETA: The HRR does say that DVC can cancel or fail to confirm reservations with transferred points they believe to be commerical and I have stated several times that this would be an exception to the 20 reservation rule.....because DVC has put in the actual rules it is an exception to that rule.

 

[DougEMG]

Im wondering if the reason why we haven’t heard of any enforcement is the word “friends”

As others have already said a “friend” can more or less be anyone. Back when DVC was founded SoMe wasn’t a thing, it wasn’t anything. A friend on SoMe could just as well be a friend you know IRL or just a friend on SoMe.

Can DVC define what a friend is or even tell you who is or who isn’t your friends?

A friend is the 1000+ people you have on your Facebook friends list! I think I better go on Facebook and make some new friends.

 

[DougEMG]

So, my takeaway from all this confusion that DVC is causing is that normal members needing to rent out their points might hesitate to now rent, while commercial renters will continue with their current practices until they are sent a letter telling them to stop or else (assuming that is even happening).

 

[VGCgroupie]

So, my takeaway from all this confusion that DVC is causing is that normal members needing to rent out their points might hesitate to now rent, while commercial renters will continue with their current practices until they are sent a letter telling them to stop or else (assuming that is even happening).

100% you nailed it. That is what is happening.

 

[JackosinDIS]

So, my takeaway from all this confusion that DVC is causing is that normal members needing to rent out their points might hesitate to now rent, while commercial renters will continue with their current practices until they are sent a letter telling them to stop or else (assuming that is even happening).

I agree. There is no shortage of posts from the usual folks on Facebook renting out confirmed reservations. No outward signs that they are bothered by all this noise in the slightest!

 

[Sandisw]

Let me add one more point of clarification to the clause in the 2011 policy that states it’s not to be seen as the only things…

I completely agree that DVC can add other definitions and choose to enforce them but I believe that those other definitions and enforcement need to be communicated to owners in some official document before DVC can act on them.

Absent of other definitions provide to owners, the only two offical thresholds identified by DVC that allow for cancelations to date, as it relates to commercial purposes policy, are the ones above 20 and with transferred points.

 

[lowlight]

Here's the million dollar question-

If we can safely assume that Member Services cast members are not going "rogue" and giving out their own personal hot takes on commercial renting, that means this information exists on paper in the form of scripted responses to certain questions asked by membership. This information would have been given to all Member Services cast members with training on how to respond to questions about commercial renting.

Do we believe:

A) DVC skipped legal review and is giving their cast members false information to disseminate to the membership in the hopes to spread FUD and put a wrinkle in the rental market without having to lift a finger.

or

B) DVC ran the scripted responses through their legal department before training Member Services cast members and these are not "training issues", but rather the intended responses?

That may seem like an obvious answer, but somehow DVC has managed to outdo the CIA when it comes to sowing doubt and distrust, to quote a former CIA director-

“We’ll know our disinformation program is complete when everything the American public believes is false” William Casey (CIA Director, 1981)”

Option A only exists if DVC doesn't care about any potential member lawsuits, Option B only exists if they are certain they have the legal standing to defend the statements.

 

[Sandisw]

Here's the million dollar question-

If we can safely assume that Member Services cast members are not going "rogue" and giving out their own personal hot takes on commercial renting, that means this information exists on paper in the form of scripted responses to certain questions asked by membership. This information would have been given to all Member Services cast members with training on how to respond to questions about commercial renting.

Do we believe:

A) DVC skipped legal review and is giving their cast members false information to disseminate to the membership in the hopes to spread FUD and put a wrinkle in the rental market without having to lift a finger.

or

B) DVC ran the scripted responses through their legal department before training Member Services cast members and these are not "training issues", but rather the intended responses?

That may seem like an obvious answer, but somehow DVC has managed to outdo the CIA when it comes to sowing doubt and distrust, to quote a former CIA director-

“We’ll know our disinformation program is complete when everything the American public believes is false” William Casey (CIA Director, 1981)”

Option A only exists if DVC doesn't care about any potential member lawsuits, Option B only exists if they are certain they have the legal standing to defend the statements.

Option B…

So far, we have CMs refusing to say renting to strangers is prohibited. CMS says it is and CMs stating that you are allowed to rent to anyone

And DVC stating that the updated T and C and the 2011 policy is the offical one.

None of those say that owners are prohibited from renting to strangers or that renting can only be done with family and friends

So, IMO, Disney lawyers reviewed the scripted responses to allow them to imply something they know DVC can’t legally state in the updated T and C or officially commercial use document.

And we all want the offical documents to match whatever offical rules there are.

After yesterday, I don’t think it’s poor training any longer. It’s definitely response they are being told to say.

The problem is those responses don’t match the rules as written.

 

[lowlight]

So, IMO, Disney lawyers reviewed the scripted responses to allow them to imply something they know DVC can’t legally state in the updated T and C or officially commercial use document.

I hope some of the lawyers here pipe in, but isn't that bound to get them in some legal hot water? Being intentionally deceitful or lying by omission? I have no idea, but it seems like it would be a legal quagmire.

 

[Tatebeck]

Let me add one more point of clarification to the clause in the 2011 policy that states it’s not to be seen as the only things…

I completely agree that DVC can add other definitions and choose to enforce them but I believe that those other definitions and enforcement need to be communicated to owners in some official document before DVC can act on them.

Absent of other definitions provide to owners, the only two offical thresholds identified by DVC that allow for cancelations to date, as it relates to commercial purposes policy, are the ones above 20 and with transferred points

This is not exactly true. The lockout portion of the Home Resort Rules and Regulations allows them to cancel reservations (among many other things) of a member who breaks any rules of any of the governing documents. It says (bolded by me for emphasis)

"Pursuant to the governing documents for each DVC Resort and applicable law, DVC Operator is authorized to deny membership privileges to any Club Member who fails to pay Annual Dues with respect to any Ownership Interest that the Club Member owns or fails to adhere to the requirements of any of the governing documents for their Home Resort or another DVC Resort or the Club (“Lock-out”). Reservations associated with a Club membership that is in Lock-out status may be canceled and all cancellation fees or penalties will be the responsibility of the Club Member. Lock-out status will prevent the Club Member from making any reservations with respect to their Club membership either at their Home Resort or at any other DVC Resort through the DVC Reservation Component, checking in at any DVC Resort in the event of an already confirmed reservation, Banking or Borrowing Home Resort Vacation Points, Transferring Home Resort Vacation Resorts, making an External Exchange Program reservation, or accessingor using any other Club Member benefit program"

And then in the POS documents as you mentioned earlier they specifically say that they expressly prohibit "a pattern of rental activity or other occupancy that the Board of each DVC Resort Association, in its reasonable discretion, could conclude constitutes a commercial enterprise or activity"

So as long as you believe that they can establish a pattern in less than 20 reservations per year, then they have indeed expressly given themselves the right to cancel reservations before they get to 20 total reservations in a year. And in fact, they can cancel reservations, or do anything else mentioned if you break any rule or fail to do anything required by any of the governing documents. And there are many small things mentioned in the documents that they could cancel reservations for if they really wished.

IE You can be considered to be doing "commercial activity" even if you don't have enough reservations (Over 20, that include rentals) to meet their secondary definition of a "commercial enterprise"