Define "A pattern of rental activity for profit"

[PrincessJasmine08]

This new rule just seems so vague to me. What is a "pattern?" Renting once to a few renters? Renting over a long period of time? I don't see how Disney can enforce this rule if they don't define it better. If someone rents all of their points for a use year to a few different renters to pay for a Disney cruise, is that a pattern? Or is it just someone who is doing this every year?

Also, since DVC just posted this rule, I don't see how they can cancel any reservations that were made prior to the rule.

I have never rented my DVC points, and never plan to, but I would really like to better understand this rule. It just seems so vague.

 

[RobDoc]

This new rule just seems so vague to me. What is a "pattern?" Renting once to a few renters? Renting over a long period of time? I don't see how Disney can enforce this rule if they don't define it better. If someone rents all of their points for a use year to a few different renters to pay for a Disney cruise, is that a pattern? Or is it just someone who is doing this every year?

Also, since DVC just posted this rule, I don't see how they can cancel any reservations that were made prior to the rule.

I have never rented my DVC points, and never plan to, but I would really like to better understand this rule. It just seems so vague.

This is not a "new" rule. It has been included in every DVC contract since 1991 and the wording has not changed.

The email newsletter merely restated the policy that has always been present. Whether or not Disney can enforce would certainly be interesting to watch, but most members will never be in the position of having to defend themselves from that activity.

While we may each have our own definition of pattern of commercial activity, the only definition that would matter is one created by the DVC Board of Directors. The real test would then be whether that could be defended thru the legal system.

IMO, no one currenty making reservations for others thru this site would meet the definition.

 

[Deb & Bill]

To me, if my name is on a lot fewer reservations that I make than other names, it might be construed as commercial. We make three or four reservations a year, but our name is on every one. We're not going to be mistaken as commercial renters. But if I make four or five reservations a year, and my name is only on one of those a year, .... could be tough times ahead.

Again, just my interpretation and not official DVC policy.

 

[Dean]

There is NO definition. We could all come up with our own. For DVC to definite it, they will need to do so in hard terms and without any perceived intent as part of the criteria and they will need to enforce it uniformly for it to hold up. Something like the number of rentals or amount of points rented. And given the POS language, it'd have to include a several year history of the same consistently. It will have to be noticed and voted upon by the voting representative.

 

[JimMIA]

While we may each have our own definition of pattern of commercial activity, the only definition that would matter is one created by the DVC Board of Directors. The real test would then be whether that could be defended thru the legal system.

Doc's right -- ugly is in the eye of the beholder! DVC doesn't need a precise definition; all they need to be able to do is recognize commercial renting when they see it. Identifying commercial renters will be simple and easy to do -- their accounts won't look anything like yours or mine.

I'm not worried about them defending themselves in court. I'm sure Disney's armies of lawyers will thoroughly vette any enforcement before they take action to be sure they are on solid legal footing.

The question is not what is commercial renting, but what type of commercial renting are they interested in stopping?

Do they want to stop individual DVC owners who rent out points occasionally, or even every year in modest numbers? I doubt it. I don't think 99% of the DVC owners have anything to worry about.

Do they want to stop large commercial renters who have thousands of their own points which they rent without "working the system?" I don't know.

Do they want to stop commercial renters who buy distressed points on the cheap, transfer them to small resorts and book speculative ressies during peak times using their ability to morph the points into the receiving resort -- thereby depriving BCV , VWL, and sometimes BWV owners of their rightful 11-month windows?

I'd think so. I hope so.

 

[JimMIA]

But if I make four or five reservations a year, and my name is only on one of those a year, .... could be tough times ahead.

I don't think you'd have any worries.

What would be problematic, I suspect, is if you made 50-100 ressies a year, including a dozen at BCV at the opening of the 11-month window for F&W, and another dozen at VWL at the opening of the 11-month window for the holiday season -- and you maintained a website for commercial DVC rentals or kept half-a-dozen auctions going all the time on eBay.

I think those are the people DVC is concerned about, and that's why I say DVC doesn't need a precise definition to take action in egregious situations.

 

[PrincessJasmine08]

This is very interesting. I was just curious about this, not because I rent my points, but because it seems so many on this board do. It seems like every time someone mentions booking a Disney cruise with points someone else tells them to rent the points and pay cash. So what if a person rented all of their points to 10 people or so and then the next thing they know Disney is cancelling all these reservations? This could get ugly! Although, what JimMIA said sounds more probable-that Disney just wants to start watching out for those taking advantage of distressed points and filling up the small resorts at the 11 month window. I am interested to see how Disney ends up enforcing this.

 

[CarolMN]

...(snip).....The question is not what is commercial renting, but what type of commercial renting are they interested in stopping?

Do they want to stop individual DVC owners who rent out points occasionally, or even every year in modest numbers? I doubt it. I don't think 99% of the DVC owners have anything to worry about.

Do they want to stop large commercial renters who have thousands of their own points which they rent without "working the system?" I don't know.

Do they want to stop commercial renters who buy distressed points on the cheap, transfer them to small resorts and book speculative ressies during peak times using their ability to morph the points into the receiving resort -- thereby depriving BCV , VWL, and sometimes BWV owners of their rightful 11-month windows?

I'd think so. I hope so.

The only one of the three you mentioned that I really care about stopping is the last one. I'm a BWV owner who prefers the standard view and Boardwalk view rooms and is willing to book day by day at the 11 month window to get them (if I have to). Until the 7 month window opens, I should only have to compete with real BWV points - not those that are magically transformed into BWV points or given a longer life via a transfer.

I don't care if someone rents a lot of points - as long as they aren't taking advantage of the system to get around the booking windows or extend the life of points beyond their legitimate expiration date.

Best wishes -

 

[DisDaydreamer]

As I have said before, we haven't rented in either direction, YET!, I am stupid when it comes to this stuff. I surely see the advantages of renting out by taking on more points than I can use, and renting them out... I am struggling with what is right and what is wrong, and I am having a real hard time figuring out what is right. We are just members, owners, but we see the possibilities... Bottom line is we see the potential of exploiting the system. Are we stupid not to?

 

[JimMIA]

The only one of the three you mentioned that I really care about stopping is the last one. I'm a BWV owner who prefers the standard view and Boardwalk view rooms and is willing to book day by day at the 11 month window to get them (if I have to). Until the 7 month window opens, I should only have to compete with real BWV points - not those that are magically transformed into BWV points or given a longer life via a transfer.

I don't care if someone rents a lot of points - as long as they aren't taking advantage of the system to get around the booking windows or extend the life of points beyond their legitimate expiration date.

Best wishes -

FWIW, I agree 100%. I don't care if people rent legitimately. I do care if they dilute the ownership rights of other owners, even though I'm not directly affected.

 

[dumbo71]

Good question. Also, would renting at a loss be allowed? As far as I'm concerned I'm still renting at a loss. Until my buy in money is recovered I'm renting "at a loss."

DVC better be careful with this subject. They would lose if this goes to court. For those of you that think big bad DVC would squash me and other renters in court, think again. The courts do not look favorably on the big corporation trying to stick it to the little guy.

Unless they can prove you've rented enough times to cover the money spent for the points then you are still "renting at a loss", trying to recoup your intial investment. Also what if one of the ressies puled is a family member or friend? What a PR nightmare.

Renting is allowed and is going nowhere. The booking of peak weeks is only going to get worse after the email.

 

[dumbo71]

The only one of the three you mentioned that I really care about stopping is the last one. I'm a BWV owner who prefers the standard view and Boardwalk view rooms and is willing to book day by day at the 11 month window to get them (if I have to). Until the 7 month window opens, I should only have to compete with real BWV points - not those that are magically transformed into BWV points or given a longer life via a transfer.

I don't care if someone rents a lot of points - as long as they aren't taking advantage of the system to get around the booking windows or extend the life of points beyond their legitimate expiration date.

Best wishes -

This is the best post I've seen on the DIS. I agree 100%. Renting isn't the problem here. It is the morphing of points through transfers. It isn't fair that owners of the small resorts are now competing with non owners who have taken advantage of a loophole DVC should fix. Lets be honest, There are some on these boards doing exactly that. Points should maintain there home resort regardless if transferred or not.

Those loking to "game" the system always end up hurting those who follow the rules.

 

[Doctor P]

Disney doesn't need to "define" the terms or attempt to deal with anything in a "gray area" in order to enforce things and make a dent in commercial renting. I think the average DVC owner, including those who rent occasionally, has little to worry about regarding the email's statement. Those who were "buying" points from other DVC owners via transfers as many as 50 or 100 times a year and then re-renting those points at a higher price through 15 or 20 transactions a month would be ones who would have more reason for concern.

 

[Deb & Bill]

...DVC better be careful with this subject. They would lose if this goes to court. For those of you that think big bad DVC would squash me and other renters in court, think again. The courts do not look favorably on the big corporation trying to stick it to the little guy...

You haven't heard about the Mom&Pop Daycare Center that was sued by Disney for painting Disney characters on the walls of the day care?

 

[Sammie]

I am sure prior to issuing the now famous email and renting statment, DVC was very familar with the definition of Commecial Renting and their legal team was fully aware of any legal aspects of the warning.

They did not just set down one day and say, "Hum, looks like the Commercial Renting is getting out of hand, lets send out a warning email." They are a Fortune 500 company, the 2nd largest media company and they don't make rush decisions without legal counsel.

 

[doubletrouble_vb]

I figure they are going after anything that is clearly commerical renting...hence pursuing E-bay stores. To do anything more and I would think that maybe, just maybe, an enterprising law firm would say "hmmm deep pockets". And presto change-o....class action suit.

 

[TCPluto]

You haven't heard about the Mom&Pop Daycare Center that was sued by Disney for painting Disney characters on the walls of the day care?

This is more than just a little different. They had the Disney characters painted on the outside of their daycare, as if to advertise it as a "Disney" daycare.

DVC poperty is an ownership interest that each one of us have purchased. While they can set limits on our use of that property, there are limits to what they can limit (say that fast!).

As others have mentioned, if they rent the same piece of property to which they retain an interest, they can't prevent the other owners of doing the same thing.

 

[rinkwide]

...As others have mentioned, if they rent the same piece of property to which they retain an interest, they can't prevent the other owners of doing the same thing.

Yep. Disney needs to recognize that there are positive and negative aspects to selling on-site timeshare interests. The obvious positive benefit to them is the huge up-front profit they get. The negative they don't seem to want to accept is that they give up total control of how the property is used.

I predict that Disney's frustration will continue since they are powerless to raise point costs or maintenance fees proportionate to their ever-increasing rack rates. As a result, renting for profit is only going to become more popular.

 

[tjkraz]

As others have mentioned, if they rent the same piece of property to which they retain an interest, they can't prevent the other owners of doing the same thing.

No, but what they could do is likely demonstrate that DVC does so in a much more responsible manner than the individuals being targeted as "commerical renters."

In recent days there have been second-hand reports of members controlling many more points than is permitted by the POS and using those points to reserve large blocks of rooms (15-25 rooms) for the same dates during high-demand periods. If DVC can demonstrate that it uses a more arbitrary process to select the dates / rooms / resorts set aside for cash guests, it would go a long way toward differentiating the actions of the two groups.

One could also argue that Disney's "rental" of points is a means-to-an-end rather than a profit center. The existence of The Disney Collection (Disney cruises, DL resorts, etc.) and the Concierge Collection (direct redemption of DVC points for use at non-Disney properties) is 100% reliant upon DVC's ability to use member points to recover their costs incurred under these programs. Eliminate Disney's ability to "rent" the applicable points and you also eliminate ANY use of points outside of the 7 DVC properties and II exchanges.

Our POS includes a waiver of trial by jury and designates the venue of any challenges as being an Orange County circuit court. Challenging DVC would be an uphill battle.

I don't see a class action lawsuit as being an option. In order to form a class, you need to have a group of sufficient size with actual damages suffered. Even if DVC does start canceling reservations of alleged "commercial renters", 99.9% of us have suffered no damages. Clearly this isn't an attempt to shut down renting altogether--it's aimed at a select group of individuals. The most likely option would seem to be a small group of "commercial renters" banding together to sue DVC.

IMO, with the resale prices continuing to climb, these folks would do a lot better to sell their ownership interests, count the profits, and look for a new money-making venture. Worst case they spend hundreds-of-thousands of dollars in legal fees for a ruling in Disney's favor.

 

[littlestar]

This is more than just a little different. They had the Disney characters painted on the outside of their daycare, as if to advertise it as a "Disney" daycare.

DVC poperty is an ownership interest that each one of us have purchased. While they can set limits on our use of that property, there are limits to what they can limit (say that fast!).

As others have mentioned, if they rent the same piece of property to which they retain an interest, they can't prevent the other owners of doing the same thing.

Disney collects the proper taxes when they rent their inventory. I doubt most commercial renters were collecting and paying taxes - big difference. I think the limit on transfers will help that problem. How would a commercial renter that's not paying taxes on their business have a leg to stand on and expect Disney to "let" them use their property to do something illegal? To me there's a big difference between someone that can't use all their points and rents them and somebody that's running a DVC rental business.