Davids DVC: Rental reimbursement or rescheduling?

[CraigInPA]

I am also not a lawyer. Can someone please explain how they can make changes to an original contract, then say that this new one goes in place of the one thrown out? Wouldn’t that require all parties to agree and sign acknowledging such?

Also, if he up and made changes without the consent of either party, does this not breach the original contract anyway? How does it give them authority to make changes but everyone gets told they are not authorized to do so?

If all parties to the original agreement agree to amend or replace the original contract, it can be changed. David's cannot unilaterally enforce new terms upon you and the owner. As such, his travel voucher scheme only works if you sign off on it. You don't even owe him a response, since his travel voucher is considered an "offer" to amend the agreement.

 

[OrangeCountyCommuter]

Do you really believe that David's are going to go bankrupt? Would be typical considering we have just rented 230 points to them for February 2021 reservations! Personally think there will be more than enough people renting points for next year to keep cash flow moving and as soon as Disney re-open in the next couple of months, things will start to get back to normal.

I think there’s definitely a cash flow situation here that could lead to bankruptcy. The fact that they want money back from the owners but are not refunding it to renters tells me they’re using that cash to meet day-to-day expenses. But no cash is coming in. And the fact that they have done this to the owners means that there may not be much inventory. You are going to pay them going forward if they don’t have points to rent. The house of cards could be close to collapse.


I also think Disney is going to open the floodgates on discounts once they reopen. And that’s going to make renting less attractive to a lot of people. If I can get a good deal on a Disney hotel without the risk of a renting or the hassle of renting that’s what I do. I wouldn’t even bother looking at renting. I was just reading another thread on here where somebody got beach club for about $100 more than renting a studio at Beach club Villa would’ve cost. No brainer I’ll be at Beach club and ignoring this whole renting nonsense

 

[New Mouse]

So if I am Davids...you use your voucher to request points for an AKL club DVC room for 2 weeks. You initiate the trasnaction...Davids cant find a renter. Davids is now off the hook according to what Im reading.

If Davids does find a renter, he pays the seller $15.50 per point 70% up front and gets $0 in return...that is someone basically kicking the can down.the road.

If I am an owner, why would I take that risk with 30% of my money?

If Davids is providing cash reservations, whos to say the price you and I can find is the price youll get? Again there is 0 incentive for that to be the case.

As for future owners 30%, if I am ever to use a broker again, I would require my money be kept in escrow. Looking back, there is no reason he shouldnt have a pool of money right now that isnt allowed to be touched.

 

[BWV Dreamin]

I have never rented or dealt with David. But I have dealt with bankrupt firms before. I’ve been on teams trying to untangle the mess so that the new owners can figure out what they got. And everything about this tells me David’s has a cash flow problem. He has been living off of the holdback money. That money has not been properly secured to be available to pay the owner. Basically as long as the cash kept flowing the game worked. Cash is no longer flowing the game is not working and he is trying to claw back payments to stave off financial collapse.


If you are an owner realize that if you return the cash it’s only going to keep the company going. I don’t think he legally has any right to it. I’ve never seen a bankruptcy where paying legitimate creditors was reversed

If you are a renter, file a chargeback on your credit card TODAY. Do not wait. This is probably not going to end well

Communicate with the renter. If they do not get the chargeback, then as an owner, refund the renter. Worry about David’s later.

 

[Madame]

Communicate with the renter. If they do not get the chargeback, then as an owner, refund the renter. Worry about David’s later.

No! If David’s initiated a PayPal chargeback against the owner, the owner will need those funds! This is not a handshake deal world we live in.

 

[CraigInPA]

So, I was doing some research and found some interesting things.
...
Based on that, I am theorizing that everyone owes everyone there money back. I believe, from a legal perspective, the DVC Member owes David his money back, and David owes the renter their money back. Essentially, everything is undone as if the contract were never signed.

If you're dealing only in contract law, the contract became frustrated or impossible.

However, when it became impossible, the owner may have suffered a financial loss to the value of his points. Many owners rented banked points due to expire. When the owner rented them 11 months ago, they had a value (per the contract with David's) of $14.50 per point. Getting them back with a very short window to use them, if they are usable at all (they could expire while the resort is closed, or there may not be reservations available before they expire) means they are worth considerably less than $14.50 per point. So, the owner should be compensated for the loss if the contract is impossible.

But, step beyond contract law, and it gets more complicated. Consumer protection laws exist to prevent consumers from paying money and getting nothing of value in return. Because the risk of a resort closure was known (Hurricanes have closed various DVC resorts in the past), it should have been covered in the contract under a force majeure and all parties would then be aware of the risk. Because the force majeure was not there, the risk is likely unknown to the renter. Under most consumer protection laws, the renter is due a refund.

And back to contract law... the party drafting a contract cannot claim incompetence in drafting as a defense. David's wrote the contract. David's acted as a reseller. He rented a reservation expressed in "points" from the owner, and sold it to to the renter as a "reservation". He collected the purchase price from the renter, and dispersed payment to the owner. He is responsible to the renter for a refund. He is responsible to the owner for paying the value of the distressed points. Had be operated as a true broker, with the renter paying the owner directly, and the owner paying David's a commission, or the renter paying David's a commission and the owner the cost of the rental, David's would be in a very different position at this moment.

 

[BWV Dreamin]

No! If David’s initiated a PayPal chargeback against the owner, the owner will need those funds! This is not a handshake deal world we live in.

Well one would know that, right? Look, it’s a mess. Still need to communicate with the renter.

 

[lpereira]

I keep seeing where David's contracts state they are governed under Canada law. The state of Florida might differ. Especially given that Davids recognizes he is subject to Florida law when he registered with them. States generally have mechanisms in place to businesses from jurisdiction hopping to bypass their consumer laws. Or employment laws. Etc.
Davids DVC-RENTAL LLC is registered with the State of Florida as a Seller of Travel. Registration No. ST42053.
Im willing to bet you could file on him in Florida.

 

[Madame]

Well one would know that, right? Look, it’s a mess. Still need to communicate with the renter.

No. Literally that is why people used a broker. If an owner wants to, sure, but David’s has been twisting conversations between owners & renters to suit themselves (been there, done that). David’s is no small Mom & Pop shop, assume it is at your own peril.

 

[yankeesfan123]

Does David’s know if the points the owner is booking the reservation with are “expiring”.

As a renter, I certainly don’t know that. So if they are distressed, as a renter, that is not something I should have to concern myself with when talking about the difficulties of contract law with the doctrines of frustration or impossibility. I just rented points for a room, and a that’s all my contract says.

I really hope people stop accepting the voucher from David’s and push them to negotiate with me individually. I’d rather have 2/3 of my cash back than a voucher for the full amount.

 

[BWV Dreamin]

Does David’s know if the points the owner is booking the reservation with are “expiring”.

As a renter, I certainly don’t know that. So if they are distressed, as a renter, that is not something I should have to concern myself with when talking about the difficulties of contract law with the doctrines of frustration or impossibility. I just rented points for a room, and a that’s all my contract says.

I really hope people stop accepting the voucher from David’s and push them to negotiate with me individually. I’d rather have 2/3 of my cash back than a voucher for the full amount.

Exactly. That is what owners should be doing. I am an owner that rents. If I had a horse in this race, it would be to communicate with my renter and come up with some acceptable solution. It’s not rocket science. Owners do not need to hide behind the agreement with David’s. That is another issue that does not concern the renter. Wish people would do the right thing.

 

[McCrae]

I keep seeing where David's contracts state they are governed under Canada law. The state of Florida might differ. Especially given that Davids recognizes he is subject to Florida law when he registered with them. States generally have mechanisms in place to businesses from jurisdiction hopping to bypass their consumer laws. Or employment laws. Etc.
Davids DVC-RENTAL LLC is registered with the State of Florida as a Seller of Travel. Registration No. ST42053.
Im willing to bet you could file on him in Florida.

Potentially you could file against the company registered In Florida. I would guess it will have almost no assets. More likely to be a virtual company. It would also depend on who your contract is listed with. If the company listed in Florida is different to the company your contract is with then you will hit a block.
The easiest option to recover cash remains charge back. If that’s not successful you may struggle with any legal action.

 

[Sandisw]

Well one would know that, right? Look, it’s a mess. Still need to communicate with the renter.

The issue is still that an owner has a contract with Davids. They have to be careful what they do, even if they contact the renter. A y changes or cancelations by the owner is a breach of the contract,

That requires the money to be paid back, along with other expenses. One might not know that a chargeback to Paypal from Davids before doing something for the renter,

I have a renter with an August reservation. I will contact the renter if I need to if the company goes under, as I plan to offer them the reservation regardless, and eat the 30% I am owed.

 

[Sandisw]

Does David’s know if the points the owner is booking the reservation with are “expiring”.

As a renter, I certainly don’t know that. So if they are distressed, as a renter, that is not something I should have to concern myself with when talking about the difficulties of contract law with the doctrines of frustration or impossibility. I just rented points for a room, and a that’s all my contract says.

I really hope people stop accepting the voucher from David’s and push them to negotiate with me individually. I’d rather have 2/3 of my cash back than a voucher for the full amount.

Which is why your issue is with Davids and not the owner. Davids has a contract with the owner as well that states nature of the points.

Basically, Davids is on the hook for both renter and owners. As a renter, if you believe you are due a refund, then do a chargeback to your CC, because it has been mentioned several times, even owners who are returning the funds to Davids, are being told that money is not going to the original renter,

 

[dsnymnkyuncle]

I like and appreciate your effort here. Quite interesting because Wiki is a 'broader' less focused view that I think would show what most people believe or expect those things to mean. But I disagree that everyone owes the money back. It will depend on who was damaged. For example an owner who got money and points back will not be able to double dip. An owner with money but wasted points will get treated differently. Dave's appears to be the great loser if court happens which is imo why Dave is trying to throw so much against the wall

So, I was doing some research and found some interesting things.

I am going to start by saying that i'm not a lawyer. This is not legal advice. This is just some interesting things i've found in researching force majeure.

So, my understanding is that since (before this COVID stuff started) David's rental contracts did not have a Force Majeure clause the contracts would fall to one of two possibilities: Frustration of Purpose or the Doctrine of Impossibility.

Some sources:
https://en.wikipedia.org/wiki/Force_majeurehttps://en.wikipedia.org/wiki/Frustration_of_purposehttps://en.wikipedia.org/wiki/Impossibility
Okay. Things are probably very strange here. A court and a bunch of high-priced lawyers will actually have to figure out what's going on. But i'm offering a legal thought experiment.

In order for Force Majeure to apply, the contracts would have to have explicit Force Majeure clauses in them. They don't, so we then move on to Frustration of Purpose or the Doctrine of Impossibility.

According to the wikipedia article on Frustration of purpose, it applies when the reasonably known purpose of a contract can no longer be fulfilled...but the specific terms of the contract CAN still be fulfilled. To put this in DVC terms: The reasonably known purpose of the contract to rent DVC points is that the family wanted to enjoy a Disney Vacation. If the parks had closed, but the resorts had stayed open, then this would fall in to the "frustration of purpose" bucket.

The Doctrine of Impossibility applies when it is impossible to fulfill the obligations of the contract. In this case, Disney, the government, etc. have closed the resorts and it is literally impossible to have a reservation that the renter can check in to. It is impossible to perform the duties specified in the contract.

In the doctrine of impossibility, everyone is excused from all of their duties. The DVC member is excused from their duty to provide the reservation. David's is excused from their duty to pay David's. The renter is excused from their duty to pay David's.

Once thing that I thought was interesting from the article on the Doctrine of Impossibility though:


Based on that, I am theorizing that everyone owes everyone there money back. I believe, from a legal perspective, the DVC Member owes David his money back, and David owes the renter their money back. Essentially, everything is undone as if the contract were never signed.

 

[Sandisw]

Exactly. That is what owners should be doing. I am an owner that rents. If I had a horse in this race, it would be to communicate with my renter and come up with some acceptable solution. It’s not rocket science. Owners do not need to hide behind the agreement with David’s. That is another issue that does not concern the renter. Wish people would do the right thing.

Owners are not hiding behind an agreement, but rather making sure they are not breaching a contract they have with Davids,

Yes, renters have an issue here, but so do owners, and I don’t think it’s fair to criticize an owner who doesn’t want to put themself in a legal breach.

 

[yankeesfan123]

Which is why your issue is with Davids and not the owner. Davids has a contract with the owner as well that states nature of the points.

Basically, Davids is on the hook for both renter and owners. As a renter, if you believe you are due a refund, then do a chargeback to your CC, because it has been mentioned several times, even owners who are returning the funds to Davids, are being told that money is not going to the original renter,

I have no problem with the owner. My statement was only indicating a problem with David’s.

 

[dsnymnkyuncle]

I am not sure if Dave is DVC-rental LLC. Someone had posted Dave is a sole proprietor and there was no LLC in Canada. Did you check the assumed name act or something?

I keep seeing where David's contracts state they are governed under Canada law. The state of Florida might differ. Especially given that Davids recognizes he is subject to Florida law when he registered with them. States generally have mechanisms in place to businesses from jurisdiction hopping to bypass their consumer laws. Or employment laws. Etc.
Davids DVC-RENTAL LLC is registered with the State of Florida as a Seller of Travel. Registration No. ST42053.
Im willing to bet you could file on him in Florida.

 

[BWV Dreamin]

Owners are not hiding behind an agreement, but rather making sure they are not breaching a contract they have with Davids,

Yes, renters have an issue here, but so do owners, and I don’t think it’s fair to criticize an owner who doesn’t want to put themself in a legal breach.

Yes but regardless renters have no reservation and owners have most of their money. Let your conscience be your guide.

 

[JETSDAD]

Yeah, that LLC is not Davids. Just google it you'll see what company it is.