Disney to Stop Commercial Bookings?

[Cyberc1978]

I had a thought about this…I have read over the years about people buying for their own use under an LLC.

Do you think that might play a role in the decision on enforcing the no rentals at all for an LLC?

Yes, we know that LLCs have rented, and we know that there are lots of LLCs out there that own DVC.

I don’t know the answer to this…but just wondered if that could be part of it?

The other part could be in the legal realm and preventing it under different rules, even though the contract has the language it does in who can be a guest on a reservation owned by an LLC, isn’t as easy as it sounds?

Especially since they have always allowed it?

ETA: the simplest answer could be true too…DVcs assessment of what is happening across all memberships and owners, based on their definition and policy, doesn’t rise to a level of major concern or issues. ?

If regular owners setup a LLC then I don’t think it would be a problem even though they are in breach of the rules. Their LLC will most likely not hold thousands and thousands of points which DVC can see are being used by people who are not connected with the LLC.

Well legally I have absolutely no idea if DVC can enforce the no renting clause for LLC’s.

Also if the simplest answer holds true, WHY have a commercial use clause? If no one is ever considered in breach even with owning thousands of points and for the most part is booking studios which are never used by the owners themselves.

IF an argument is: we have always allowed it. Then all renting is allowed regardless of how it’s done.

I remember @DougEMG telling us a year or so ago, that back in 2011-2012 he was notified by DVC for too many rentals. The limit was 20 reservations in a 12 months rolling period. @DougEMG do you remember at the time if they contacted you because you had much more than 20 reservations in total during those 12 rolling months, in both your and renters name or just because you hit the 20 limit with reservations in your name which you intended to rent?

 

[Sandisw]

If regular owners setup a LLC then I don’t think it would be a problem even though they are in breach of the rules. Their LLC will most likely not hold thousands and thousands of points which DVC can see are being used by people who are not connected with the LLC.

Well legally I have absolutely no idea if DVC can enforce the no renting clause for LLC’s.

Also if the simplest answer holds true, WHY have a commercial use clause? If no one is ever considered in breach even with owning thousands of points and for the most part is booking studios which are never used by the owners themselves.

IF an argument is: we have always allowed it. Then all renting is allowed regardless of how it’s done.

I remember @DougEMG telling us a year or so ago, that back in 2011-2012 he was notified by DVC for too many rentals. The limit was 20 reservations in a 12 months rolling period. @DougEMG do you remember at the time if they contacted you because you had much more than 20 reservations in total during those 12 rolling months, in both your and renters name or just because you hit the 20 limit with reservations in your name which you intended to rent?

That is the thing…they do have a commercial policy clause.

And, the contract says “to encourage personal use one is capped at 8000 points”.

That’s pretty high so does it mean anything in terms of what the intent of the commercial purpose clause might mean?

I would think that DVC would remain consistent in applying rules to LLCs…meaning treat them under the same limitation.

Either use the LLC clause as written, or decide to treat LLCs using the same commercial use policy in play for all…

It comes down to what and how DVC sees it…and per the info to me, they do monitor and enforce the policy…what that looks like and the specifics?

Who knows…but what we know is that DVC gets to evaluate memberships and owners and make the final decions on what actions, if any, violated the policy.

The new POS inserts have been loaded into our accounts…with the 2026 budgets…and there was no updates to the Multi Site POS as of today nor is there any updated HRR.

Last ones were 2024 when the transfer rules changed. So, at least right now, we are status quo.

 

[RoseGold]

The old buried terms said that anyone on the board of the LLC got Blue Card, I can't find anything close to that now. I would guess they closed that in newer buys. But the owner of the contract is the LLC, not any person.

LLCs could be a really smart way to hold with multiple owners or commercial interests. Or even just in complicated estate planning. Completely legit way to hold real estate like this.

LLCs are still buying these in foreclosure, just saw one this week that appears to be affiliated with a commercial real estate broker that does short term rental, no surprise there.

My SSR contracts are really weak on this. It would be interesting to see the new ones.

An LLC can't have personal use. Seems like the obvious target. So where's the crackdown?

 

[Sandisw]

The old buried terms said that anyone on the board of the LLC got Blue Card, I can't find anything close to that now. I would guess they closed that in newer buys. But the owner of the contract is the LLC, not any person.

LLCs could be a really smart way to hold with multiple owners or commercial interests. Or even just in complicated estate planning. Completely legit way to hold real estate like this.

LLCs are still buying these in foreclosure, just saw one this week that appears to be affiliated with a commercial real estate broker that does short term rental, no surprise there.

My SSR contracts are really weak on this. It would be interesting to see the new ones.

An LLC can't have personal use. Seems like the obvious target. So where's the crackdown?

The language in the contract for LLCs terms it as recreational use…not personal use.

It’s a good question for anyone who is interested to ask DVC to explain why they allow LLCs to have guests other than those who fall into the categories listed in the POS.

 

[drusba]

If regular owners setup a LLC then I don’t think it would be a problem even though they are in breach of the rules. Their LLC will most likely not hold thousands and thousands of points which DVC can see are being used by people who are not connected with the LLC.

Well legally I have absolutely no idea if DVC can enforce the no renting clause for LLC’s.

Also if the simplest answer holds true, WHY have a commercial use clause? If no one is ever considered in breach even with owning thousands of points and for the most part is booking studios which are never used by the owners themselves.

IF an argument is: we have always allowed it. Then all renting is allowed regardless of how it’s done.

I remember @DougEMG telling us a year or so ago, that back in 2011-2012 he was notified by DVC for too many rentals. The limit was 20 reservations in a 12 months rolling period. @DougEMG do you remember at the time if they contacted you because you had much more than 20 reservations in total during those 12 rolling months, in both your and renters name or just because you hit the 20 limit with reservations in your name which you intended to rent?

The POS's do not actually prohibit LLCs from renting. What the clause in the POS prohibits is that use of the rooms by "corporations or other business entities is strictly limited to the recreational use by their directors, officers, principals [i.e., main shareholders], or employees" of such an entity. E.g., BWV Component Site POS, §III Public Offering Statement Text ¶5a(1). That effectively prohibits an LLC from renting to anyone other than those corporate-related persons, and that is legally enforceable by DVD/DVC if the LLC is renting to others. It does not seem that DVD/DVC has actually done much in the past to enforce that particular corporation clause against LLCs but nothing prevents it from doing so now or in the future. Some may assume the LLCs could argue DVD/DVC has waived the issue as to many such entities because of the failure to raise the issue in the past. However, such waiver is not a defense that such a corporate member could raise if DVD/DVC pursued the issue now or in the future, because the POS expressly provides that its failure to enforce any provisions in the POS in the past does not constitute a waiver of it doing so in the future. See, e.g., BWV Declarations §15.3. My guess is there may be a practical difference for DVD/DVC to follow. If there are LLC's acting like business entities doing large numbers of rentals, then they can be shut down for violating the commercial use rule and the rule that prohibits corporations from doing any rentals to persons other than those associated with the LLC. If they are just a member who has set up an LLC for some reason other than to do rentals, and just acts like many members who do a few rentals to recover some dues, have things going on that prevent them from using their points for a year and thus do some rentals, or doing rentals when they have a reservation they can no longer use, DVD/DVC can just treat them like other similar members whose rentals are not really at issue.

As to the question raised by the OP, DVD/DVC cannot really pursue brokers such as David's or DVC Rental Store unless those organizations are using their own points to do lots of rentals. They are the brokers through which members can do rentals and DVD/DVC has no contract with those brokers. That does not necessarily mean DVD/DVC can do nothing to effect their businesses because if it actually goes after members that are doing an excess number of rentals that could lower somewhat the number of rentals for which those organizations are acting as brokers, but its pursuit of the rental issue needs to focus on the members doing rentals not the brokers. Note that the DVC Rental Store is an actual corporation, not an LLC. Moreover, David's is neither an LLC nor a full Corporation. It is a Canadian company that is actually a sole proprietorship, i.e., the business is David the individual. Canada does not have LLC's.

 

[TinkAgainU]

So far there haven't been any reports of any widespread action being taken. It's possible they've cancelled some reservations, tapped on some member's shoulders, etc., but those affected haven't spoken out about it. Until DVC starts taking action there isn't really any use in altering your behavior because we have no idea what behavior DVC finds objectionable.

I'll add, in my personal legal transactions with DVC, they've slapped Very strong "prohibited from disclosing under penalty of X..." type language on their legal documents. I could see that threat keeping any Disney versus Individual "Commercial" Owners interactions very quiet. My interactions were not rental / commercial related, but I'm pretty sure their strong arm legal approach is consistent lol.

 

[muppets3d]

I'll add, in my personal legal transactions with DVC, they've slapped Very strong "prohibited from disclosing under penalty of X..." type language on their legal documents. I could see that threat keeping any Disney versus Individual "Commercial" Owners interactions very quiet. My interactions were not rental / commercial related, but I'm pretty sure their strong arm legal approach is consistent lol.

The "tour guides" who were banned from wdw property a while back sure were vocal about their experience though.