Commerical Use Policy Update - New Thread!

[Sandisw]

To add, it’s why I have always advocated thst owners should be contacting DVC about it to share what they think about it all.

 

[Tatebeck]

If this is true, then everyone’s interpretation of what frequently and regularly renting looks like is correct.

Everyone’s interpretation of the 2011 offical and current policy would be correct as well,,,

I think that everyone's interpretation simply cannot be correct when there are differing interpretations and the document specifically says that only DVC's interpretation is correct.

Take spec renting of hard to get rooms, if DVC doesn’t identify that as a pattern of rentals that meets the commercial purpose standard, then owners are left to interpret aspects of the contract language to decide if it’s allowed or not.

Sure, there is language that makes it seem like it should be but other language that make it seem like it’s not…and the only one who can say which interpretation is right is DVC…

Exactly. They get to choose how they want to interpret it. We do not.

Right now, DVC has done nothing to change the rules or policy in place…and when pushed about who we can rent to, they admitted it’s to anyone, not family and friends.

Even your words that you can rent “a small amount” is your interpretation of what level of renting should be appropriate, isn’t it?

It isn't really my interpretation. It's implied by the contracts themselves. I can't give specific numbers because DVC doesn't give us those numbers. It's either under the limit or over the limit

• Renting a small amount is ok (documents say renting is ok, up to the point it looks commercial IE a small amount according to DVC)
• Renting a large amount is not ok (enough points to make DVC think you are commercial IE too large of an amount according to DVC)

It just gets weird because they don't choose a specific amount ahead of time, they have just chosen to use the "we'll know it when we see it" approach so far.

All we know for sure is that DVC has identified clearly two actions by owners that count as of bounds…more than 20 reservations in a rolling 12 months and using transferred points in a way that looks commercial. .

So, we are stuck waiting to see if DVC decides to penalize an owner for other things.

If they do, then everyone, will know what they are thinking…which is why I believe the info they gave me…we will know when and if rules are updated.

IMO, owners deserve better from DVC.

I agree this is indeed where we are at.

And I can definitely understand why it may frustrate some members, as it would be much easier to use if we had clear limits. But at the same time I can also put myself in DVC's shoes and understand why they may not want to put forth limits like these to retain tighter control over their products.

 

[Sandisw]

I think that everyone's interpretation simply cannot be correct when there are differing interpretations and the document specifically says that only DVC's interpretation is correct.

Exactly. They get to choose how they want to interpret it. We do not.

It isn't really my interpretation. It's implied by the contracts themselves. I can't give specific numbers because DVC doesn't give us those numbers. It's either under the limit or over the limit

• Renting a small amount is ok (documents say renting is ok, up to the point it looks commercial IE a small amount according to DVC)
• Renting a large amount is not ok (enough points to make DVC think you are commercial IE too large of an amount according to DVC)

It just gets weird because they don't choose a specific amount ahead of time, they have just chosen to use the "we'll know it when we see it" approach so far.

I agree this is indeed where we are at.

And I can definitely understand why it may frustrate some members, as it would be much easier to use if we had clear limits. But at the same time I can also put myself in DVC's shoes and understand why they may not want to put forth limits like these to retain tighter control over their products.

We all agree that DVC gets to interpret it and that was my point…everyone’s personal interpretation is valid and correct until DVC comes out with something that disputes it.

IMO, being vague actually benefits not only DVC but also benefits those who have patterns that most would agree should be defined as commercial.

If DVC has yet to identify an action as commercial and isn’t penalizing owners for doing certain things, than doesnt that imply that maybe they have decided not to count certain things as rising to the commercial level?

That's why I personally think owners should expect more from DVC…regardless of what level of renting you believe should count.

I would think we’d all want it to be as specific as possible if for no other reason to ensure enforcement is consistent for all owners.

 

[Cyberc1978]

My post just before yours basically answered this.

The easiest answer would be to rent "as little as possible" or "only as absolutely necessary." The amount would then depend on the owner and their situation but could be rather restrictive.

As little as possible is still not clear. That could be 1 reservation or it could be “I have a renter wanting 7 nights in a GV” which could be 800 points or even more.

A more lenient answer would actually mirror what your MS supervisor mentioned a while back, which could be as long as you aren't renting for more than dues and still using the vast majority of your membership for personal/family stays then you likely wouldn't have been joining DVC for income/profit as a commercial entity.

Use your points, rent as little as possible or rent only when you have to. So don't do it often.

If they don’t want us to rent for more than dues, all they need to do is update the policy - correct?

You have to look at the first part as well (and everywhere else in the rules where it's mentioned) where it says it is ONLY for personal use. Buying specifically to flip would certainly seem to be outside personal use.

"for personal use and enjoyment only"

It’s not that I disagree about this part. Problem is the rules are not clear. To understand and adhere to one or more rules the purpose can not and must not be that you need to read 10 different § to understand a single rule - that’s at least to me not what the definition of clear is.

 

[Mouseforward]

The rule boils down to: don't engage in any rental or rental-related activities that DVC thinks/feels is a commercial pattern.

This reminds me of a "cherished customer" that I consulted for years ago who told me to "never bring up an idea in a meeting that she doesn't like"

 

[xdan0920]

If they do, then everyone, will know what they are thinking…which is why I believe the info they gave me…we will know when and if rules are updated.

They don’t need to update the rules, IMO, they just need to enforce the rules they already have.

So if they start taking action, it doesn’t mean rules have changed, it means they are finally enforcing their existing policies.

They’ve turned a blind eye to wildly obvious commercial entities. They’ve turned a blind eye to sketchy owner groups. They’ve turned a blind eye to owners clearly using a majority of their points to rent to make weight.

They have done essentially zero enforcement to this point.

And to be honest, I don’t see that changing. Despite my constant emails and calls.

 

[xdan0920]

IMO, being vague actually benefits not only DVC but also benefits those who have patterns that most would agree should be defined as commercial.

Only if they continue their “pattern” of no enforcement.

 

[Mouseforward]

IMO, being vague actually benefits not only DVC but also benefits those who have patterns that most would agree should be defined as commercial.

Exactly what I let my guide know he should bring up in his next sales meeting-DVC current plan of vague warnings will make some of the "whales" in the comma club think twice before adding on more points, and not doing anything will discourage the little fish with 100 point contracts who cant get a studio... No member is happy.

 

[Cyberc1978]

That is true, they did give us the right to rent sometimes as long as is a small amount and it doesn't make DVC think that we are acting commercially. So personal use can definitely include renters, but only up to a point that DVC allows and gets to subjectively decide (before they feel it is commercial)

Still a “small amount” is super unclear and anything that’s subjective is a no-go unless the BOD is asking for problems that’s at least how my understanding of HOA/COA rules need to be - clear, understandable and not subjective.

DVC (and maybe some members) do not want a strict definition on the number or rentals, points rented, percentage of points rented etc, because then commercial renters have something concrete that they can try to workaround/skirt. (IE if the limit is 1000 points rented per year, there will be a ton of renters renting 999, with their wife renting 999, kids renting 999, etc. Even if it would require some retitling, etc). And it could possibly tie DVC's hands to certain situations. So I do think it is in a way "smart" for DVC to let it be vague and say that they can decide on a case by case basis if and when they decide they see commercial activity. It gives them more power but makes it murkier for the members.

I agree with you - but if clear and understandable rules are a requirement then DVC needs to follow through - or make them unclear and UNenforceable.

If past performance (or lack thereof) is an indicator for future enforcement - then nothing will happen.

However I do believe that DVC will go after the LLC’ as the rules are super clear - no renting allowed.

It would 100% make my membership easier to use with more defined limits, but I understand that that would have negatives as well.

They have communicated the actual rules to members, they are in our documents already (or the last rule that some have requested and have ben granted). The rules just give them subjective authority to decide for each member.

What they have communication is the current policy - which frankly is anything but clear. All members wishes to follow the rules - but DVC themselves make it difficult.

 

[Tatebeck]

As little as possible is still not clear. That could be 1 reservation or it could be “I have a renter wanting 7 nights in a GV” which could be 800 points or even more.


If they don’t want us to rent for more than dues, all they need to do is update the policy - correct?

As little as possible is very clear. It just changes depending on the member. If you broke a hip and can't travel, then renting 100% of your points for a year is probably going to be fine. If you bought a ton of loaded cheap distressed contracts totaling 4000 points, never even tried to use them yourself, then immediately put them all up for rent, that's most likely not fine.

Also if you are saying to yourself "I have a renter that wants..." then you are probably too close to commercial already IMO. You should have the number of points left over that you can't/won't use in mind up front before attempting to rent.

As for renting for no more than dues, if they wanted to make that the sole policy then sure they could change the rule specifics and update it to that. But that would require them to check on the actual price of rentals which is difficult and it may hamstring or limit them in what they can do after that. So I understand why they are hesitant to make new very specific rules/limits.

 

[Tatebeck]

Still a “small amount” is super unclear and anything that’s subjective is a no-go unless the BOD is asking for problems that’s at least how my understanding of HOA/COA rules need to be - clear, understandable and not subjective.


I agree with you - but if clear and understandable rules are a requirement then DVC needs to follow through - or make them unclear and UNenforceable.

If past performance (or lack thereof) is an indicator for future enforcement - then nothing will happen.

However I do believe that DVC will go after the LLC’ as the rules are super clear - no renting allowed.



What they have communication is the current policy - which frankly is anything but clear. All members wishes to follow the rules - but DVC themselves make it difficult.

The rule itself is easily understandable. What that means for each member out in the wild can vary greatly and is decided on a case by case or member by member basis.

Also there is nothing I have seen anywhere (even in the blurbs you posted) that says that rules made by condo associations cannot have subjective elements. You seem to have added that yourself trying to read too much into it.

DVC does not make it hard to follow the rules. They make it hard to skirt the rules or "walk the line" as it were. If you honestly try to use all of your points every year, and only rent when absolutely necessary, I can almost guarantee that DVC will have zero problems with you as a member. It's members who rent a lot of points and often that will be on their radar. And if you are doing that long term, you probably have too many points

 

[Mouseforward]

Also there is nothing I have seen anywhere (even in the blurbs you posted) that says that rules made by condo associations cannot have subjective elements.

After running a HOA for a decade , you can have subjective elements and you can use phrases like at the boards sole discretion.

However, while they may hold up for something like the color of a fence, for something material like renting rights the arbitrator will give the board some business judgment latitude or "presumption of good faith" but it will still apply a "reasonable" standard for how the board decides.

So if they were to say any renting is commercial, with the history of no enforcement for 30 plus years - I would not bet that it would hold up.

But if they had some objective, published guidelines, consistently enforced, like less than 20 rentals , not advertised, personal use by owner for the majority of the time... I would bet that it would hold up.

But I have had shocking decisions from arbitration in the past so who knows, and there is no chance this ends in court with the arbitration clause in the contract.

 

[Sandisw]

They don’t need to update the rules, IMO, they just need to enforce the rules they already have.

So if they start taking action, it doesn’t mean rules have changed, it means they are finally enforcing their existing policies.

They’ve turned a blind eye to wildly obvious commercial entities. They’ve turned a blind eye to sketchy owner groups. They’ve turned a blind eye to owners clearly using a majority of their points to rent to make weight.

They have done essentially zero enforcement to this point.

And to be honest, I don’t see that changing. Despite my constant emails and calls.

As I mentioned, to enforce something they have to define it, even if it initially starts as an internal definition kept out of documents and from owners.

Thst why is think owners should hold DVC to a high standard to identify it in some way.

It’s going to continue to be frustrating to owners who want certain things stopped if they don’t expect DVC to actually update things to reflect it.

And why I think pushing them to explain is important because then they at least have to try to explain.

Even finding out the 2011 policy is still what DVC management told me is the current policy is something that most thought was no longer in play.

But, I really do believe that if DVC plans to actually enforce things not included in that policy…they will let owners know.

At the very least, we might know if we get reports from owners caught up in it.

 

[Sandisw]

The rule itself is easily understandable. What that means for each member out in the wild can vary greatly and is decided on a case by case or member by member basis.

Also there is nothing I have seen anywhere (even in the blurbs you posted) that says that rules made by condo associations cannot have subjective elements. You seem to have added that yourself trying to read too much into it.

DVC does not make it hard to follow the rules. They make it hard to skirt the rules or "walk the line" as it were. If you honestly try to use all of your points every year, and only rent when absolutely necessary, I can almost guarantee that DVC will have zero problems with you as a member. It's members who rent a lot of points and often that will be on their radar. And if you are doing that long term, you probably have too many points

The terms “as little as possible” isn’t anywhere though.

Isn’t that why we can have this conversation. Your idea of as “little as possible” may not be the same as the next owner and it may not even match what DVC would say “as little as possible” means.

And, the rules and enforcement need to have some level of consistency to them.

They can make exceptions, absolutely, but owners should expect that DVC is actually setting policy and rules and enforcement that are indeed can be seen as “reasonable and a pattern”.

An example is the transfer rule. It was only one in or out but they allowed owners with multiple memberships to do more, until they saw a problem and now enforce as written.

Would owners really be okay if the transfer rules didn’t actually say how many and then leave it up to DVC to do it willy nilly?

Even if one doesn’t agree with DVC interpretation of the contract or their definition, IMO, owners should never be okay with DVC acting in secret, no matter what it relates to when it comes to using our membership.

 

[mkatsy]

The terms “as little as possible” isn’t anywhere though.

Isn’t that why we can have this conversation. Your idea of as “little as possible” may not be the same as the next owner and it may not even match what DVC would say “as little as possible” means.

And, the rules and enforcement need to have some level of consistency to them.

They can make exceptions, absolutely, but owners should expect that DVC is actually setting policy and rules and enforcement that are indeed can be seen as “reasonable and a pattern”.

An example is the transfer rule. It was only one in or out but they allowed owners with multiple memberships to do more, until they saw a problem and now enforce as written.

Would owners really be okay if the transfer rules didn’t actually say how many and then leave it up to DVC to do it willy nilly?

Even if one doesn’t agree with DVC interpretation of the contract or their definition, IMO, owners should never be okay with DVC acting in secret, no matter what it relates to when it comes to using our membership.

I doesn’t help that there is no representation from the membership on the board of directors. I was in the annual meeting when they were asked to add a seat for a member representative and they declined the request.

 

[Tatebeck]

The terms “as little as possible” isn’t anywhere though.

Isn’t that why we can have this conversation. Your idea of as “little as possible” may not be the same as the next owner and it may not even match what DVC would say “as little as possible” means.

And, the rules and enforcement need to have some level of consistency to them.

They can make exceptions, absolutely, but owners should expect that DVC is actually setting policy and rules and enforcement that are indeed can be seen as “reasonable and a pattern”.

An example is the transfer rule. It was only one in or out but they allowed owners with multiple memberships to do more, until they saw a problem and now enforce as written.

Would owners really be okay if the transfer rules didn’t actually say how many and then leave it up to DVC to do it willy nilly?

Even if one doesn’t agree with DVC interpretation of the contract or their definition, IMO, owners should never be okay with DVC acting in secret, no matter what it relates to when it comes to using our membership.

I know DVC didn't say "as little as possible" in the rules, I was saying that that is the easiest way to make sure that you do not run afoul of their (intentionally?) vague rules

 

[xdan0920]

As I mentioned, to enforce something they have to define it, even if it initially starts as an internal definition kept out of documents and from owners.

It’s my opinion that they already have. It’s your opinion that they haven’t.

Either way, it’s irrelevant, since they don’t enforce anything. Yet.

 

[Cyberc1978]

The rule itself is easily understandable. What that means for each member out in the wild can vary greatly and is decided on a case by case or member by member basis.

Also there is nothing I have seen anywhere (even in the blurbs you posted) that says that rules made by condo associations cannot have subjective elements. You seem to have added that yourself trying to read too much into it.

DVC does not make it hard to follow the rules. They make it hard to skirt the rules or "walk the line" as it were. If you honestly try to use all of your points every year, and only rent when absolutely necessary, I can almost guarantee that DVC will have zero problems with you as a member. It's members who rent a lot of points and often that will be on their radar. And if you are doing that long term, you probably have too many points

If I said they can’t have subjective wording or rules I’m sorry, my point is they shouldn’t have it as it would lead to legal problems. Any rule there is open for mine, yours and most importantly the BOD’s interpretation is a legal problem waiting to happen.

Moreover what’s the point of having rules and regulations if no one understands them and are able to follow them?

We all know we are allowed to rent, but as it stands no one except the BOD knows how much we are allowed. What they deem acceptable today could be unacceptable tomorrow - that’s not how rules work if you need anyone to adhere to them.

 

[Cyberc1978]

After running a HOA for a decade , you can have subjective elements and you can use phrases like at the boards sole discretion.

However, while they may hold up for something like the color of a fence, for something material like renting rights the arbitrator will give the board some business judgment latitude or "presumption of good faith" but it will still apply a "reasonable" standard for how the board decides.

From the reading I have done, it seems to suggest that you have clear rules not open for interpretation as that would be a legal problem waiting to happen.

 

[HyperspaceMountainPilot]

wait a minute ... what is this " should not be purchased by any purchaser for resale" ... as of now, I've only seen discussion focused on renting your ownership interest but to me this clearly reads that you are not to purchase with the intent to SELL your ownership interest. (presumably for a profit) This would be the "flipping" part of the equation. This is incredibly simple to prove as the Orange County Comptroller provides a "print" button, and you can pull up an LLC's entire buy/sell history. Why isn't this being enforced? Some of these brokers own tens of thousands of their own points. They are NOT just matchmakers for other members. Add it to the list for the September meeting. Better yet ... I'll just bring the print outs with me to the meeting. I have one here on my desk, 428 buy/sell transactions ... in nobody's world is this personal use.

An idea so nice, I wish I could like it twice.

If this is true, then everyone’s interpretation of what frequently and regularly renting looks like is correct.

Everyone’s interpretation of the 2011 offical and current policy would be correct as well,,,

This seems logistically impossible and, unless I am not understanding you, is not how the law works. And honest misunderstanding of the contract is not a defense to breaching it unless it is reasonable, and I’ve seen a lot of unreasonable takes on the commercial renting threads over the past two months.

If DVC doesn’t actually identity actions that are out of bounds, then what do they enforce?

They have clearly set themselves up to enforce against anyone they believe is regularly and frequently renting as well as LLCs renting to guests— why they haven’t is anybody’s guests— and I agree with you we deserve better than the uncertain (and I would add lax to zero enforcement).

Right now, DVC has done nothing to change the rules or policy in place…and when pushed about who we can rent to, they admitted it’s to anyone, not family and friends.

Did you share where they said you can rent to anyone, not just friends and family you know personally? I looked at the attachments you referenced last time and didn’t see it in there. If I missed it, my sincere apologies, hopefully someone will point it out to me. I’m on the member cruise with family and following less closely than usual.

IMO, owners deserve better from DVC.

Hopefully we all agree on this, except the people getting rich as DVC landlords.