Commerical Use Policy Update - New Thread!

[lowlight]

I honestly dont think that they can lower it - if they could they would have done it.

After the FL stat 718.110 came into force in 2021 the ship has more or less sailed for DVC in terms of restricting the number of times owners can rent. They can restrict it for future owners, but that doesn't help them with the current ones.

That might also be why we haven't seen an updated policy - any limitation would require a vote, and only apply for those in favor of it.

DVC and owners for that matter is more or less stuck with what we have.

I am not sure what DVC is doing, but it's definitely not this. I think what constitutes personal use and commercial use are valid subjects to debate, but it is very naive to debate what power DVC has granted themselves. It's spelled out in so many different legal documents that you've signed that I haven't really seen a lawyer here dispute that DVC's power is significantly more than they've chosen to wield (up to this point). They are most certainly not negotiating from a position of weakness. The only legal position I've seen those knowledgeable in legal matters all agree to is that DVC cannot get rid of all renting, because that is baked into state law and also the contracts we've signed. The limits they can put to that renting are vast, undefined, and as of now, underutilized/not utilized. I am not sure if this is a coping mechanism for renters, but DVC certainly is not "stuck with what we have".

 

[Cyberc1978]

I am not sure what DVC is doing, but it's definitely not this. I think what constitutes personal use and commercial use are valid subjects to debate, but it is very naive to debate what power DVC has granted themselves. It's spelled out in so many different legal documents that you've signed that I haven't really seen a lawyer here dispute that DVC's power is significantly more than they've chosen to wield (up to this point). They are most certainly not negotiating from a position of weakness. The only legal position I've seen those knowledgeable in legal matters all agree to is that DVC cannot get rid of all renting, because that is baked into state law and also the contracts we've signed. The limits they can put to that renting are vast, undefined, and as of now, underutilized/not utilized. I am not sure if this is a coping mechanism for renters, but DVC certainly is not "stuck with what we have".

Maybe you are right, maybe you aren't. There must be a reason why we haven't seen an update yet. Its been 8 months since the meeting and all DVC got to show is updated T&C and text associated to a checkbox.

Until we see an updated policy, which restrict the current policy even further - I stand by what I wrote.

 

[mkatsy]

I am not sure what DVC is doing, but it's definitely not this. I think what constitutes personal use and commercial use are valid subjects to debate, but it is very naive to debate what power DVC has granted themselves. It's spelled out in so many different legal documents that you've signed that I haven't really seen a lawyer here dispute that DVC's power is significantly more than they've chosen to wield (up to this point). They are most certainly not negotiating from a position of weakness. The only legal position I've seen those knowledgeable in legal matters all agree to is that DVC cannot get rid of all renting, because that is baked into state law and also the contracts we've signed. The limits they can put to that renting are vast, undefined, and as of now, underutilized/not utilized. I am not sure if this is a coping mechanism for renters, but DVC certainly is not "stuck with what we have".

I understand your point, but what does it matter how much power you have if you refuse to use it?

 

[Mouseforward]

As you know, these contracts are considered real estate by the state of Florida. Anytime a property is used as collateral for a loan the transaction is recorded at the comptroller. In this case, batches of contracts are used as collateral to the equity firm. Both the name of the funding source, and the number of each contract appears on the document. Just another reason to invest in a title search when buying resale

VC can have the LLC as collateral, not the timeshares. Nothing has to be on the timeshare.

 

[lowlight]

I understand your point, but what does it matter how much power you have if you refuse to use it?

I agree with you. At first I thought they were gearing up for something, but now I don’t think they will enforce a thing. It just doesn’t have anything to do with them not being legally able to. Maybe they realize with Riviera and PIT not sold out, a huge stinker at CFW, and another huge stinker at LSL coming up, they would rather those contracts sell to commercial renters than not at all. It’s a bit like a Ponzi scheme where there has to be constant investment or the product dies, so development can never really stop, except they are running out of desirable locations to plop these things down. Or maybe they are big dummies, that’s also a distinct possibility.

 

[Cyberc1978]

I agree with you. At first I thought they were gearing up for something, but now I don’t think they will enforce a thing. It just doesn’t have anything to do with them not being legally able to. Maybe they realize with Riviera and PIT not sold out, a huge stinker at CFW, and another huge stinker at LSL coming up, they would rather those contracts sell to commercial renters than not at all. It’s a bit like a Ponzi scheme where there has to be constant investment or the product dies, so development can never really stop, except they are running out of desirable locations to plop these things down. Or maybe they are big dummies, that’s also a distinct possibility.

Even though we might not see eye to eye on all aspects of this I do hope that at least DVC start to enforce on LLC’.

 

[Brianstl]

Dont know why, but I always thought that the LLC' bought the contracts outright using cash. If they own thousands and thousands of points, they make a lot of money. Assuming each LLC owns 8,000 points (they probably own more) and they rent them at an average at $25, thats $200,000 before dues and around $120,000 after dues. Thats a nice income, just for a single LLC.

And in many cases that single LLC is just one of many controlled by one individual. It is how you get around the point ownership restrictions.

 

[Brianstl]

I honestly dont think that they can lower it - if they could they would have done it.

After the FL stat 718.110 came into force in 2021 the ship has more or less sailed for DVC in terms of restricting the number of times owners can rent. They can restrict it for future owners, but that doesn't help them with the current ones.

That might also be why we haven't seen an updated policy - any limitation would require a vote, and only apply for those in favor of it.

DVC and owners for that matter is more or less stuck with what we have.

I don’t think that law restricted other timeshare companies from going after previous owners who rent the in what they determine to be in a commercial fashion in the last few years.

 

[Brianstl]

I agree with you. At first I thought they were gearing up for something, but now I don’t think they will enforce a thing. It just doesn’t have anything to do with them not being legally able to. Maybe they realize with Riviera and PIT not sold out, a huge stinker at CFW, and another huge stinker at LSL coming up, they would rather those contracts sell to commercial renters than not at all. It’s a bit like a Ponzi scheme where there has to be constant investment or the product dies, so development can never really stop, except they are running out of desirable locations to plop these things down. Or maybe they are big dummies, that’s also a distinct possibility.

I don’t know if they plan on doing nothing. If they don’t do anything they are going to leave themselves open to a class action suit from members for not enforcing DVC’s own policies stated in the contracts the members own. That is a failure of board members to do their fiduciary duty.

 

[Mouseforward]

I don’t think that law restricted other timeshare companies from going after previous owners who rent the in what they determine to be in a commercial fashion in the last few years.

Bonnet creek applied the new rental rules June 2021 , the Florida law effective date was July 2021 - it was not a coincidence.

 

[Mouseforward]

I don’t know if they plan on doing nothing. If they don’t do anything they are going to leave themselves open to a class action suit from members for not enforcing DVC’s own policies stated in the contracts the members own. That is a failure of board members to do their fiduciary duty.

That’s not the case in Florida,- Florida courts have ruled boards have business discretion to not enforce or prioritize enforcement of a covenant if they act in good faith for the best interest of the community.

A common use of this is not enforcing a covenant because it would cost the association more than the perceived benefit.

Not to mention their failure to enforce it in 30 years, can be ruled as the board waving the covenant.

 

[Mouseforward]

I say that if DVC doesn't do this is because they don't really want to kill the rental market

I think that it is closer to say DVC will enforce it to the point where it is a net positive on the bottom line. So it will happen only If they think the benefit outweighs the risk. I would not doubt that number crunching has been going on for the past few months.

 

[Cyberc1978]

I don’t think that law restricted other timeshare companies from going after previous owners who rent the in what they determine to be in a commercial fashion in the last few years.

Unless the other timeshare companies had the restriction prior to the FL stat coming into force.

 

[Cyberc1978]

Bonnet creek applied the new rental rules June 2021 , the Florida law effective date was July 2021 - it was not a coincidence.

That’s exactly my point. They knew it would be a problem changing the policy afterwards.