Davids DVC: Rental reimbursement or rescheduling?

[DisneyBB]

I

The decision was made farther back when he opted not to hold the buyer's money in escrow until the end of the transaction. It'd be like going to close on a resale DVC deed where the title company couldn't disburse the seller's part because it spent some on overhead and were counting on new contracts behind yours to cover it. He should not have paid himself (the business) until the end of the contract. Then, this wouldn't be an issue. Clearly, he rode the float, and here we are with "vouchers", which are almost definitely not worth the digital paper they're printed on.

I think that even if he had done that he would still be short. Because of his contract he has to give a voucher even when the owner can’t pay back the 70% so he has to cover that. But yes everything else should be there and not spent until the checkin date.

 

[SherylLC]

yeah--that money is coming straight out of his pocket to the extent any point owners didn't return the 70%.

It's actually much less since he also collected a booking fee and additional money for points.

 

[Cyberc1978]

Sorry, I know it is possible what you say has already been confirmed by PayPal, but if not, I really do not believe that a transaction to rent a room at a DVC resort is a "timeshare transaction." It is a vacation rental transaction.

I don't understand what your trying to say here. Are you saying that you don't believe PayPal doesn't allow payments for a timeshare rental?

Quoted from a Q&A from the PayPal site:
services and real estate are actually ineligible. We'll gladly process the payment for you for simplicity's sake, but if there's any issues and you would need to open a dispute, we would not be able to make a determination on it.

I recently had a dispute filed in Paypal from my renter which wanted the money back due to the corona. My renter used G&S.

Long story short, Paypal ruled in my favor not the renter.

PayPal didn’t state any reason for ruling in my favor.

Even though PayPal don’t allow timeshare transactions they didn’t void this one. Maybe they ruled in my favor due to the nature of the transaction I don’t know.

If renters file a dispute (if they used PayPal) then David’s may win too. However if David’s files a dispute with owners he might lose.

I don’t know if my renter used a CC to fund the transaction in that case I might see a charge back filed too.

 

[McCrae]

I recently had a dispute filed in Paypal from my renter which wanted the money back due to the corona. My renter used G&S.

Long story short, Paypal ruled in my favor not the renter.

PayPal didn’t state any reason for ruling in my favor.

Even though PayPal don’t allow timeshare transactions they didn’t void this one. Maybe they ruled in my favor due to the nature of the transaction I don’t know.

If renters file a dispute (if they used PayPal) then David’s may win too. However if David’s files a dispute with owners he might lose.

I don’t know if my renter used a CC to fund the transaction in that case I might see a charge back filed too.

I would think it is because Paypal Protection doesn't extend to real estate related extensions.

 

[McCrae]

The decision was made farther back when he opted not to hold the buyer's money in escrow until the end of the transaction. It'd be like going to close on a resale DVC deed where the title company couldn't disburse the seller's part because it spent some on overhead and were counting on new contracts behind yours to cover it. He should not have paid himself (the business) until the end of the contract. Then, this wouldn't be an issue. Clearly, he rode the float, and here we are with "vouchers", which are almost definitely not worth the digital paper they're printed on.

The rental market would virtually die if all funds were held in Escrow. Owners won't take the risk of losing out in a dispute that could end up with them having points they can't use.

 

[DisneyBB]

I recently had a dispute filed in Paypal from my renter which wanted the money back due to the corona. My renter used G&S.

Long story short, Paypal ruled in my favor not the renter.

PayPal didn’t state any reason for ruling in my favor.

Even though PayPal don’t allow timeshare transactions they didn’t void this one. Maybe they ruled in my favor due to the nature of the transaction I don’t know.

If renters file a dispute (if they used PayPal) then David’s may win too. However if David’s files a dispute with owners he might lose.

I don’t know if my renter used a CC to fund the transaction in that case I might see a charge back filed too.

Did you have a contract in writing with the renter? I am quite nervous about renting directly because of issues like this.

 

[Cyberc1978]

I would think it is because Paypal Protection doesn't extend to real estate related extensions.

That could very well be the reason.

 

[Cyberc1978]

Did you have a contract in writing with the renter? I am quite nervous about renting directly because of issues like this.

Yes I had a contract which PayPal asked for and got.

 

[lawboy2001]

I don't understand what your trying to say here. Are you saying that you don't believe PayPal doesn't allow payments for a timeshare rental?

Quoted from a Q&A from the PayPal site:
services and real estate are actually ineligible. We'll gladly process the payment for you for simplicity's sake, but if there's any issues and you would need to open a dispute, we would not be able to make a determination on it.

OR

Are you saying DVC isn't a timeshare?

I am saying that, IMHO, a rental through David's is a vacation rental transaction, not a timeshare or real estate transaction. Someone had commented that these transactions weren't covered because they were "timeshare" transactions. The timeshare transaction is when you purchased DVC, not when you rent out some of your points.

As for your quote from the PayPal site, that does not say that "real estate" transactions cannot be processed through PayPal, only that their payment protection will not apply. Some poster much further up this chain seemed to be saying that Paypal couldn't be used for these rental transactions.

 

[Cyberc1978]

I am saying a rental through David's is a vacation rental transaction, not a timeshare or real estate transaction.

As for your quote from the PayPal site, that does not say that "real estate" transactions cannot be processed through PayPal, only that their payment protection will not apply.

According to my link you can’t use PayPal for timeshare rentals rights. I would say DVC fall under that category.

https://www.paypal.com/us/smarthelp...cy-regarding-the-sale-of-real-property-FAQ799

 

[Madame]

According to my link you can’t use PayPal for timeshare rentals rights. I would say DVC fall under that category.

https://www.paypal.com/us/smarthelp...cy-regarding-the-sale-of-real-property-FAQ799

Yup.

 

[cmrdgrs]

I am saying that, IMHO, a rental through David's is a vacation rental transaction, not a timeshare or real estate transaction. Someone had commented that these transactions weren't covered because they were "timeshare" transactions. The timeshare transaction is when you purchased DVC, not when you rent out some of your points.

As for your quote from the PayPal site, that does not say that "real estate" transactions cannot be processed through PayPal, only that their payment protection will not apply. Some poster much further up this chain seemed to be saying that Paypal couldn't be used for these rental transactions.

I don't know. I personally know someone who's PayPal acct was frozen bt PayPal due to a DVC rental situation.

I'll find the PayPal rule and post it.

NVM - DIDN'T READ ABOVE

 

[Cyberc1978]

I don't know. I personally know someone who's PayPal acct was frozen bt PayPal due to a DVC rental situation.

I'll find the PayPal rule and post it.

I already did it. See above

 

[lawboy2001]

Yup.
View attachment 490340

Wow, I suppose David's transactions could be described as offers to "rent rights to the periodic use of a property" -- so if I owned a vacation rental, I can use PayPal, but if my vacation rental is a timeshare, I can't. Seems a bit of a distinction without a difference?

 

[Cyberc1978]

Wow, I suppose David's transactions could be described as offers to "rent rights to the periodic use of a property" -- so if I owned a vacation rental, I can use PayPal, but if my vacation rental is a timeshare, I can't. Seems a bit of a distinction without a difference?

I wonder if there is a difference seen from PayPal perspective if I rent and either send an invoice to the renter, send a request or if the renter send me the funds using F&S or G&S

 

[cmrdgrs]

Brokers should not be accepting payments in this fashion from PayPal. Now maybe PayPal just turned a blind eye to David due to the volume, but others have had their PayPal accounts locked for the same type transaction.

 

[cmrdgrs]

I

I think that even if he had done that he would still be short. Because of his contract he has to give a voucher even when the owner can’t pay back the 70% so he has to cover that. But yes everything else should be there and not spent until the checkin date.

Yes, in this scenario, David would be short because we know that some owners were paid 70% of their funds on expiring points. Some of those owners will not rebook and they won't return the 70% to David because the money is spent and they don't plan to dig down into their own pocket to reimburse David.

The way I see this, is as a business you sometimes lose money. David has been lucky to run a business for a long time that has seen very little loss. High profit low return as my DH likes to say. This day of reckoning was bound to happen. Obviously, no one saw a pandemic, but if he didn't plan for a 2 - 3 month shutdown, or think about banked/borrowed points, or how to handle some type of major disruption to his renters due to a war or other type of major event, he wasn't thinking at all. I wouldn't be able to sleep at night handling that many transactions and not worry about a major disruption to my business.

But, that's just me. I never spend the money my renters give me until they have checked in to their room and I know they are happy and settled in. I even go so far as to set the funds for rentals aside in a separate account for both tax reasons, and to ensure I don't spend money I don't really have until it's all said and done. I'm sorry, I just don't see why a broker can't do the same.

 

[Dracula]

Yup.
View attachment 490340

I wonder what is meant by “periodic use of a property”. According to the dictionary, ”periodic” is an event occurring at regular intervals, say week 23 every year. The transactions that David intermediates are rather rental rights for occasional use of a timeshare property.

 

[crisi]

Periodic can also mean occasional. Its been a long standing Paypal policy that they don't deal in timeshare rentals. Not that they follow it, but with that in writing, its another example of Caveat Emptor - I wouldn't expect Paypal to get involved in recovering funds at all. The most action I believe they would take is that Paypal shuts down the participants accounts - and it wouldn't necessarily just be the owner - so renters looking to this for redress may with to be careful about what they wish for.

 

[cmrdgrs]

Periodic can also mean occasional. Its been a long standing Paypal policy that they don't deal in timeshare rentals. Not that they follow it, but with that in writing, its another example of Caveat Emptor - I wouldn't expect Paypal to get involved in recovering funds at all. The most action I believe they would take is that Paypal shuts down the participants accounts - and it wouldn't necessarily just be the owner - so renters looking to this for redress may with to be careful about what they wish for.

There are other ways to take a payment with a credit card. Why not just use one that accepts a credit card? I use SquareUp for my credit card transactions. Why break a rule that you know you're breaking (and your renter does not know you're breaking happily thinking they have protection with PayPal) -- that's my question [to David].