Davids DVC: Rental reimbursement or rescheduling?

[Kaufeegurl]

I personally don't rent points very often but going forward, if I need to rent points, the reservation will be only with current years points, before the banking window OR within 2 months of the start of my use year so that there is an opportunity to bank or rebook a cancelled reservation due to a crisis such as the one we are experiencing.

 

[CarolMN]

I doubt the rental market is going to change. People love disney. People want to save money.
What is going to change is the brokers market will change. Less brokers, and less people who trust brokers.
To me it has always been better and safer to find a good owner to rent from then a broker.

I think what is going to change - at least in the short term, is the number of people who will be able to afford a Disney vacation. For example, just this morning, I read that in Minnesota, over 50,000 have applied for unemployment insurance. Last year at this time, the number was 2,000. Even a few weeks of no or reduced pay will make a big difference to a whole lot of people. It will take time for people to recover.

https://www.cnbc.com/2020/03/20/the...-be-unlike-anything-the-us-has-ever-seen.html
We also need to consider that the rental prices are closely related to Disney Hotel cash prices. If Disney has to offer discounted stays to get people back, that will certainly depress rental prices. And it's anybody's guess how much the rental prices will have to decline to get people to forget the losses associated with the COVID-19 resort closures and accedpt "non-refundable" reservations again.

 

[_auroraborealis_]

I have to agree this is temporary. And people are still going to take the risk for the most popular and expensive resorts.

 

[poofyo101]

I think what is going to change - at least in the short term, is the number of people who will be able to afford a Disney vacation. For example, just this morning, I read that in Minnesota, over 50,000 have applied for unemployment insurance. Last year at this time, the number was 2,000. Even a few weeks of no or reduced pay will make a big difference to a whole lot of people. It will take time for people to recover.

https://www.cnbc.com/2020/03/20/the...-be-unlike-anything-the-us-has-ever-seen.html
We also need to consider that the rental prices are closely related to Disney Hotel cash prices. If Disney has to offer discounted stays to get people back, that will certainly depress rental prices. And it's anybody's guess how much the rental prices will have to decline to get people to forget the losses associated with the COVID-19 resort closures and accedpt "non-refundable" reservations again.

I agree with both those statements

 

[heynowirv]

I think what is going to change - at least in the short term, is the number of people who will be able to afford a Disney vacation. For example, just this morning, I read that in Minnesota, over 50,000 have applied for unemployment insurance. Last year at this time, the number was 2,000. Even a few weeks of no or reduced pay will make a big difference to a whole lot of people. It will take time for people to recover.

https://www.cnbc.com/2020/03/20/the...-be-unlike-anything-the-us-has-ever-seen.html
We also need to consider that the rental prices are closely related to Disney Hotel cash prices. If Disney has to offer discounted stays to get people back, that will certainly depress rental prices. And it's anybody's guess how much the rental prices will have to decline to get people to forget the losses associated with the COVID-19 resort closures and accedpt "non-refundable" reservations again.

100,000 applied in Pa as per the reports this morning.

 

[Lewisc]

I definitely agree this will impact the brokers but I also believe that many renters would not be expected to understand that no refunds applies even if the resort closed. Yes, it’s no ones fault, but in Most other cases, if you buy something non refundable and it’s not delivered to you, a refund is processed.

That’s why I think it will impact rentals all around, including the price because I know I wouldn’t recommend it to anyone unless the get CFAR insurance. Once you do that, it may not be a huge saving over cash bookings...and Just not worth the risk.

I think you have it reversed. Members "owners" posting in this threat don't understand their contract isn't valid, is voided, if the resorts are all closed. We're not talking about a guest being moved from GFV to OKW. We're not talking about a guest who doesn't want to travel or who can't get off work. We're talking aout a guest who paid for a resort stay which is unavailable. Some are suggesting an agreement which basically says if for any reason DVC resorts are closed all payments made by the renter are considered to be a gift. I question if that agreement would even be legal.

Once the resorts open many renters, JMO, won't have the $$ available, or time off from work, to take their planned vacation. I don't know how brokers will operate. A kind owner might offer a partial refund if the points can be re-rented. Win-Win the member makes additional money and the renter gets some money back. I see both sides.

The contract says non-refundable. It also lists my dates and accommodations. You have the choice, convince Disney to open the resort or refund the renter.

 

[CraigInPA]

I think you have it reversed. Members "owners" posting in this threat don't understand their contract isn't valid, is voided, if the resorts are all closed. We're not talking about a guest being moved from GFV to OKW. We're not talking about a guest who doesn't want to travel or who can't get off work. We're talking aout a guest who paid for a resort stay which is unavailable. Some are suggesting an agreement which basically says if for any reason DVC resorts are closed all payments made by the renter are considered to be a gift. I question if that agreement would even be legal.

Once the resorts open many renters, JMO, won't have the $$ available, or time off from work, to take their planned vacation. I don't know how brokers will operate. A kind owner might offer a partial refund if the points can be re-rented. Win-Win the member makes additional money and the renter gets some money back. I see both sides.

The contract says non-refundable. It also lists my dates and accommodations. You have the choice, convince Disney to open the resort or refund the renter.

There's a lot of your argument that ignores that any contract (except for those which are plainly illegal, such as a contract to kill someone) between two adult parties is binding on both parties, no matter what happens.

When the owner made the reservation, and kept the reservation open for the member, he sold something of value. The value of those points could be reduced to zero if the points are expiring soon, or be reduced greatly if the points are expiring in 2020 (because there are few rooms available between September and January).

The renter has paid money for a reservation. That money was paid to a broker. The broker collects $4.50 per point for his commission and pays the owner $10.15 per point immediately. The broker then holds $3.35 per point until the day of check-in, when it is then released to the owner.

The key problem here is that the contracts do not have a Force Majeure clause, which would state what would happen in the event the contract becomes impossible to fulfill due to the actions of a third party.

One could claim that the renter should get their money back in full. The broker would say, "But I spent time and money to make this match up, so I should be paid!". The owner would say, "I rented those points when they had value, and now they have none, so I should be paid!". Because the broker is holding the $3.35 per point, and has already collected his $4.50 per point commission, and has a "no refund" contract with the renter, he believes he is in the driver's seat.

But, ultimately, the broker is the one responsible. It is a tenet of law that the person who drafts the contract is ultimately responsible for its content, even if it works against him because of his own incompetence in drafting it. By failing to have a Force Majeure event, even though it was completely foreseeable that one would be needed (Hurricanes and 9/11 shut down Disney in the past), David's has exposed themselves to liability on both sides: refunds for the renters, and full compensation for the owners. They rented reservations which, through no fault of the renter or owner could not be fulfilled. I'm sure David's knows this, so they are scrambling to re-book as many clients as they can, and trying to keep as much cash in the bank to cover the coming charge backs from people who cannot be accommodated with a re-book.

I see major changes coming to every broker's contract due to this event, and changes as to how these brokers operate.

 

[lauraleh]

I think you have it reversed. Members "owners" posting in this threat don't understand their contract isn't valid, is voided, if the resorts are all closed. We're not talking about a guest being moved from GFV to OKW. We're not talking about a guest who doesn't want to travel or who can't get off work. We're talking aout a guest who paid for a resort stay which is unavailable. Some are suggesting an agreement which basically says if for any reason DVC resorts are closed all payments made by the renter are considered to be a gift. I question if that agreement would even be legal.

Once the resorts open many renters, JMO, won't have the $$ available, or time off from work, to take their planned vacation. I don't know how brokers will operate. A kind owner might offer a partial refund if the points can be re-rented. Win-Win the member makes additional money and the renter gets some money back. I see both sides.

The contract says non-refundable. It also lists my dates and accommodations. You have the choice, convince Disney to open the resort or refund the renter.

I haven't waded into this conversation yet because it's obviously very owner heavy board but OMG this!

I am a renter. I paid for a hotel stay. You can't provide that hotel stay? I get my money back. I'm not involved with the logistics of when your points expire.

 

[Mainsail Minnie]

There's a lot of your argument that ignores that any contract (except for those which are plainly illegal, such as a contract to kill someone) between two adult parties is binding on both parties, no matter what happens.

Um, not really. I do my job under a contract. If I don't work, though, I won't get paid, regardless of the fact that the contract states that my employer will pay me. That's because my part of the contracted deal (working) is not being upheld, so that would release my empolyer from its part of the deal (paying me). Same principle applies here.

 

[_auroraborealis_]

I am a renter. I paid for a hotel stay. You can't provide that hotel stay? I get my money back. I'm not involved with the logistics of when your points expire.

You paid for a timeshare stay. Changes a lot about it. PayPal protection applies on hotels. Not timeshares. Even your credit card terms vary.

The contract says no refunds.

 

[Beachmom0317]

I haven't waded into this conversation yet because it's obviously very owner heavy board but OMG this!

I am a renter. I paid for a hotel stay. You can't provide that hotel stay? I get my money back. I'm not involved with the logistics of when your points expire.

Respectfully, I think that’s where the confusion lies. It is not a hotel reservation where you can simply cancel within the cancellation window, take refund and reschedule. Renting timeshare points, DVC in particular, means you are involved with the circumstances, such as renting points close to expiring, banked points that can’t be moved forward legally, or the limited availability when trying to rebook. It’s two different things. I get the frustration. It sucks for both sides in certain scenarios.

 

[CraigInPA]

Um, not really. I do my job under a contract. If I don't work, though, I won't get paid, regardless of the fact that the contract states that my employer will pay me. That's because my part of the contracted deal (working) is not being upheld, so that would release my empolyer from its part of the deal (paying me). Same principle applies here.

Not even close. You willfully chose not to work.

A better analogy is where you are the owner of a building and you hire a contractor to install a kitchen. The contractor buys the cabinets and puts them in the building. Before they could be installed, the building burns down. At this point, it is impossible to install any kitchen because the building is gone. Regardless of the fact that the cabinets the contractor brought in were destroyed, you, as the owner of the building, say that you aren't going to pay the contractor anything because he didn't complete the contract to install the whole kitchen? That, in a nutshell, is your argument.

Now, let's expand that analogy a bit... Let's say that only half of the custom order was delivered before the fire, but cancelling the rest of the order is impossible. It's possible, but unlikely, the contractor will ever be able to use those cabinets, so he sells them at a significant loss. Now, it's clear that the cabinets destroyed in the fire should be paid for by you, the building owner. But, what about the cabinets not destroyed? Do you have to pay for them, subject to a credit for whatever the contractor got for them? Or, do you not have to pay for them at all, since they didn't get to the job site? Or, do you have to pay full price for them, because they were ordered for your job?

This is why a Force Majeure clause is important in a contract. That clause would dictate what happens when an event caused by neither party occurs that would prevent, curtail, or change the contract.

 

[Nennie]

David's seems to be a great company, and they are trying to do the right thing for both the owners and the renters. Hopefully the owners without expiring points will outweigh those with expiring points, and David's can make up the difference. I would hate to see this company be forced out of business.

With regard to the contract terms, and whether the owner or the renter is on the hook, since points have a limited shelf life and the points were GOOD at the time of the rental, I don't think the owner should have to return the funds (but does have to rebook if the points didn't expire).

My analogy is that I receive a $100 gift certificate for a local restaurant that expires 12/31/20. I don't like the restaurant and I sell the gift certificate to someone for $80. The buyer makes a reservation for 8/1/20. On 7/31/20, the restaurant goes out of business and closes. The buyer can't come back to me for a refund, b/c the GC was good when I sold it, and it's not my fault that they waited to use it, and certainly isn't my fault that the restaurant went out of business. It isn't the buyers fault either of course, but they buyer is the own left with a worthless GC in this scenario.

DVC owners could have sold those points to someone with a Feb 2020 reservation, or used the points themselves. It's a tragic situation all around, but in the case of expiring points, the owner should not have to refund.

I hope that David's can either reach into its own pocket (or perhaps has insurance???) that can cover the renters in the cases of expiring points. Fingers crossed for everyone involved!

 

[MICKIMINI]

There's a lot of your argument that ignores that any contract (except for those which are plainly illegal, such as a contract to kill someone) between two adult parties is binding on both parties, no matter what happens.

When the owner made the reservation, and kept the reservation open for the member, he sold something of value. The value of those points could be reduced to zero if the points are expiring soon, or be reduced greatly if the points are expiring in 2020 (because there are few rooms available between September and January).

The renter has paid money for a reservation. That money was paid to a broker. The broker collects $4.50 per point for his commission and pays the owner $10.15 per point immediately. The broker then holds $3.35 per point until the day of check-in, when it is then released to the owner.

The key problem here is that the contracts do not have a Force Majeure clause, which would state what would happen in the event the contract becomes impossible to fulfill due to the actions of a third party.

One could claim that the renter should get their money back in full. The broker would say, "But I spent time and money to make this match up, so I should be paid!". The owner would say, "I rented those points when they had value, and now they have none, so I should be paid!". Because the broker is holding the $3.35 per point, and has already collected his $4.50 per point commission, and has a "no refund" contract with the renter, he believes he is in the driver's seat.

But, ultimately, the broker is the one responsible. It is a tenet of law that the person who drafts the contract is ultimately responsible for its content, even if it works against him because of his own incompetence in drafting it. By failing to have a Force Majeure event, even though it was completely foreseeable that one would be needed (Hurricanes and 9/11 shut down Disney in the past), David's has exposed themselves to liability on both sides: refunds for the renters, and full compensation for the owners. They rented reservations which, through no fault of the renter or owner could not be fulfilled. I'm sure David's knows this, so they are scrambling to re-book as many clients as they can, and trying to keep as much cash in the bank to cover the coming charge backs from people who cannot be accommodated with a re-book.

I see major changes coming to every broker's contract due to this event, and changes as to how these brokers operate.

I believe your statement is the most articulate and accurate I have read on disboards… Thank you.

 

[foreUT]

There's a lot of your argument that ignores that any contract (except for those which are plainly illegal, such as a contract to kill someone) between two adult parties is binding on both parties, no matter what happens.

When the owner made the reservation, and kept the reservation open for the member, he sold something of value. The value of those points could be reduced to zero if the points are expiring soon, or be reduced greatly if the points are expiring in 2020 (because there are few rooms available between September and January).

The renter has paid money for a reservation. That money was paid to a broker. The broker collects $4.50 per point for his commission and pays the owner $10.15 per point immediately. The broker then holds $3.35 per point until the day of check-in, when it is then released to the owner.

The key problem here is that the contracts do not have a Force Majeure clause, which would state what would happen in the event the contract becomes impossible to fulfill due to the actions of a third party.

One could claim that the renter should get their money back in full. The broker would say, "But I spent time and money to make this match up, so I should be paid!". The owner would say, "I rented those points when they had value, and now they have none, so I should be paid!". Because the broker is holding the $3.35 per point, and has already collected his $4.50 per point commission, and has a "no refund" contract with the renter, he believes he is in the driver's seat.

But, ultimately, the broker is the one responsible. It is a tenet of law that the person who drafts the contract is ultimately responsible for its content, even if it works against him because of his own incompetence in drafting it. By failing to have a Force Majeure event, even though it was completely foreseeable that one would be needed (Hurricanes and 9/11 shut down Disney in the past), David's has exposed themselves to liability on both sides: refunds for the renters, and full compensation for the owners. They rented reservations which, through no fault of the renter or owner could not be fulfilled. I'm sure David's knows this, so they are scrambling to re-book as many clients as they can, and trying to keep as much cash in the bank to cover the coming charge backs from people who cannot be accommodated with a re-book.

I see major changes coming to every broker's contract due to this event, and changes as to how these brokers operate.

Your statement that "the broker is the one responsible" appears to be at the crux of the issue. Not sure how many years this particular broker has been in business, but I believe it's a decade or more. Every business whose major job is to act as the money pipeline for a transaction between two parties should be cognizant and prepared for the possibility, no matter how remote, that catastrophic events do occur. It's an easy route to follow that the guy who originally got the money becomes the guy expected to pay. Vacation rental companies mitigate their chargeback losses by channeling the cc payments directly to the Owner. In chargebacks, VRBO might lose their Service Fees, but the home-rental monies come directly from the home-owner bank accounts (where they were originally deposited by the credit card companies.) David's didn't use this business plan. It might have been difficult to do so w a timeshare, but the downsides of taking all the money are enormous. I'm very surprised that a contingency plan wasn't in effect and plans made to immediately address issues resulting from DVC closures.

 

[Deb & Bill]

David's seems to be a great company, and they are trying to do the right thing for both the owners and the renters. Hopefully the owners without expiring points will outweigh those with expiring points, and David's can make up the difference. I would hate to see this company be forced out of business....

I think the brokers are trying to do the best for them first. They could return the 30% they held from the owner and their percentage and call it good. I don't think the future is looking good for any of the brokers or renting points for that matter. There is very little action on the point rental sites.

But if the point owners can make another reservation before the points expire for the non-owners, that will be the best. But if the reservation costs more the owner should be reimbursed for that extra cost. The non-owners might not be able to get the resort or size villa they had before since they are looking at summer and fall.

 

[Kaufeegurl]

I don't think the future is looking good for any of the brokers or renting points for that matter. There is very little action on the point rental sites.

Only time will tell. I think the market for DVC rentals may be depressed for the short term as this crisis will impact many Americans (and internationally) financially. Discretionary spending on Disney vacations will evaporate and Disney may have to reduce resort pricing - reducing the premium of a deluxe stay through Disney nearer to the cost to rent DVC. In the longer term, things will bounce back (including cruising) as people have short memories and time softens and blurs the impact. Renters will still want to rent DVC for the substantial price savings, owners will still want/need to rent points, but I am quite sure there will be new contract wording in place spelling out exactly what will happen should this scenario happen again.

 

[chicagodisneyguy]

I don't think the future is looking good for any of the brokers or renting points for that matter.

I completely agree with you on this. I think it will be hard for either side (renter or dvc owner) to really trust that going forward their interests are 100% protected in these transactions.

Many renters did everything right, bought insurance, and still lost some or all their vacation monies.

Many owners also did everything right. They supplied the points, made the reservations, added dining plan MDE etc. In these unprecedented times, many owners have been accommodating...allowing for changes or even refunding some/all their rental income. While the owners have seemed to come out of this better than renters, depending how long this goes I'm guessing that owners could be taking some hits (unpaid 30% or being left with unusable, expiring points).

Going forward, I'd be extremely hesitant to participate on either side of this transaction in the current form. As a renter I'd now never pay 100% upfront and have a chance, at no fault of my own, to lose 100% of the funds. As an owner I'd be hard pressed to rent my points knowing I could, at the last second, be asked to refund some/all the rental income and be left with worthless/expiring points. The only way to really give either side more protection is to take it away from the other. David's could keep more money in escrow for the renter in case of the reservation not being available but that gives the owner less money/protection up front. Davids could go the other way and give the owner more than 70% upfront, but that obviously means the renter is even less likely to get relief if issues come up.

I agree with the poster above, and many others with the same sentiment, that the rental agencies must spell out to the letter what happens in a futures case like this. That way at least everyone going in knows what they are entitled to in all cases and can decide if the transaction is worth the risks.

 

[MICKIMINI]

My guess is there will not be many of us owners renting in the future regardless of rewritten agreements. No owners means no points available to renters. It seemed to work well until this crisis, but I know I'm just going to wait out the two I have in the pipeline and that's the end. I'm honest and ethical (like most DVC members) and don't like to be put in a position where it seems I am not, through no fault of my own...just not going there again.

From now on when the parks reopen renters will have to deal with low levels of points available due to scared owners which "may" increase prices despite what is being said on these threads. It is still a supply and demand economy and is yet to be seen how DVC rentals survive. Be well.

 

[DGsAtBLT]

My guess is there will not be many of us owners renting in the future regardless of rewritten agreements. No owners means no points available to renters. It seemed to work well until this crisis, but I know I'm just going to wait out the two I have in the pipeline and that's the end. I'm honest and ethical (like most DVC members) and don't like to be put in a position where it seems I am not, through no fault of my own...just not going there again.

From now on when the parks reopen renters will have to deal with low levels of points available due to scared owners which "may" increase prices despite what is being said on these threads. It is still a supply and demand economy and is yet to be seen how DVC rentals survive. Be well.

Yeah, everything you said makes sense and is likely accurate from most owners POV, and then from my POV, a renter, the ever shrinking savings of renting points just does not seem worth it anymore when this brand new risk has now revealed itself as a real possibility. It will forever be in the back of my mind. And all that is ignoring the IMO likely scenario of true room rates (the post discount rates) coming down.

Doesn’t look good for the rental industry when there’s a good chance demand decreases on both sides.