Does David's tell you if the renter cancels?

[Yinn]

The airlines are asking for 58B. Maybe we just collectively get together, owners and renters. Let's ask for a $25B bailout package to fund our vacations. Who's in?

 

[Sandisw]

If you bought a concert ticket on Stubhub and were told NO REFUNDS, then the concert was canceled and Stubhub refused to give you your money back, you could dispute that with the credit card company and it would be a slam-dunk win. This is similar. If you use a credit card to pay for something that is not provided through no fault of your own, you are covered, regardless of any “nonrefundable” verbiage.

Which is why this could leave the broker forced to pay back the money to the renter,

Which then if that happens, does the broker than decide they need to get money back from owner?

I fell like this has become an episode of the Twilight Zone

 

[Sandisw]

Maybe, but maybe not. I read on another board that that private vacation rentals in Florida which had to be cancelled due to weather (like hurricanes) have been taken to court and it was determined that the owner was not at fault since it was out of their control and it was on the renter to purchase travel insurance to protect themselves in a non-refundable private rental.

I wonder, though, since many are saying that travel insurance excludes something like this, would that tip the scales?

 

[fsjking]

In essence, they're renting points from me and not renting a resort from me. Which as I type this makes me wonder. Perhaps we're looking at this wrong or perhaps this is where the market will go. We may not be renting our rooms anymore in terms of language. We may simply be renting out points plus a service to make a reservation.

Will DVC allow you to transfer points to a non-owner? If not, this situation would still be there. DVC returns the points to you and you are still required to provide what the renter paid for.

The more likely result will be all future contracts will have a "resort closure" clause, and one for every other scenario imaginable. It'll either be spelled out that if the resort closes the owner is required to return the money or that the renter gets no refund. While I know the owners would prefer the first way, after this, I think not many renters would agree to that.

 

[chicagodisneyguy]

I'm surprised the contracts David's uses doesn't spell out what happens in a resort closure. Obviously no one could see a global pandemic coming. But a massive hurricane hitting Orlando could happen which could lead to the resorts being closed suddenly for an extended period of time. It would be very similar results so I'm very surprised the contract they use didn't cover this subject in at least a broad term.

I think if the rental companies survive they will almost have to change the language to renters are renting/buying the points...not a reservation. I would also think that going forward the type of points and use year of points will need to be disclosed. I think the whole process will be reworked.

I know some have talked about chargebacks. Can you call the credit card company 11 months after the fact? I thought Visa/MasterCard had time limits on initiating one.

 

[MICKIMINI]

Which is why this could leave the broker forced to pay back the money to the renter,

Which then if that happens, does the broker than decide they need to get money back from owner?

I fell like this has become an episode of the Twilight Zone

It seems like the broker is making every attempt to reclaim any funds possible - understandable, but is it unethical to promise the owner "no refunds" and then ask for a "refund"? I believe (in my non attorney mind) it is. The more I think this through, the more I believe it is true IMHO.

This business model popped up out of supply and demand for DVC rentals. The businesses that decided to broker these deals so owners didn't have to - had the opportunity to draw up their legal agreements any way they wanted to. Owners and renters have chosen to work with the brokers for protection with a third party agreement that each believed protected them, and now the brokers seem to want it both ways.

I'm truly sorry for every owner and renter that believed what they read and signed as it really doesn't seem to protect either one or the broker. Everyone loses in this situation.

 

[Yinn]

I'm surprised the contracts David's uses doesn't spell out what happens in a resort closure. Obviously no one could see a global pandemic coming. But a massive hurricane hitting Orlando could happen which could lead to the resorts being closed suddenly for an extended period of time. It would be very similar results so I'm very surprised the contract they use didn't cover this subject in at least a broad term.

I think if the rental companies survive they will almost have to change the language to renters are renting/buying the points...not a reservation. I would also think that going forward the type of points and use year of points will need to be disclosed. I think the whole process will be reworked.

I know some have talked about chargebacks. Can you call the credit card company 11 months after the fact? I thought Visa/MasterCard had time limits on initiating one.

Has Disney actually closed before? I’ve certainly been there during hurricanes where parks closed but resorts remained open.

 

[MICKIMINI]

Will DVC allow you to transfer points to a non-owner? If not, this situation would still be there. DVC returns the points to you and you are still required to provide what the renter paid for.

The more likely result will be all future contracts will have a "resort closure" clause, and one for every other scenario imaginable. It'll either be spelled out that if the resort closes the owner is required to return the money or that the renter gets no refund. While I know the owners would prefer the first way, after this, I think not many renters would agree to that.

With all due respect, DVC doesn't get involved with non-owners/renters. Transfers are from a DVC contract to another DVC contract. A non-owner has no say in anything DVC does.

 

[fsjking]

With all due respect, DVC doesn't get involved with non-owners/renters. Transfers are from a DVC contract to another DVC contract. A non-owner has no say in anything DVC does.

That was pretty much my point. They aren't going to allow an owner to sell, assign, or transfer points to a non-owner.

 

[CraigInPA]

And, to throw another hypothetical into this... Let's say a broker is overwhelmed with charge backs to the point they have to close. What will happen to the reservations booked, but yet haven't taken place? The owners, upon hearing that the broker has gone out of business, know they aren't getting that last 30% from the broker. The renter has paid all of their reservation up front. Put yourself in both shoes. The situation isn't pretty from either side.

 

[Sandisw]

That was pretty much my point. They aren't going to allow an owner to sell, assign, or transfer points to a non-owner.

It’s not that the won’t, they can,t. They don’t own the poiints, the member does. It is a deeded piece of real estate,

It is why we are allowed to book reservations for guests and/or renters, We are allowing them to stay in our “home”.

 

[fsjking]

It’s not that the won’t, they can,t. They don’t own the poiints, the member does. It is a deeded piece of real estate,

It is why we are allowed to book reservations for guests and/or renters, We are allowing them to stay in our “home”.

That's what I'm saying. A couple posters are suggesting the contracts will change to stating they are renting points instead of rooms. Points are useless to a non-owner and the owner can't assign them anyway. In the case we are having now, even if they wrote to contract that way, we'd be in the same situation as they cannot provide points to the renter. They'd still be looking at a refund situation.

 

[GoingSince1990]

I'm surprised the contracts David's uses doesn't spell out what happens in a resort closure. Obviously no one could see a global pandemic coming. But a massive hurricane hitting Orlando could happen which could lead to the resorts being closed suddenly for an extended period of time. It would be very similar results so I'm very surprised the contract they use didn't cover this subject in at least a broad term.

I think if the rental companies survive they will almost have to change the language to renters are renting/buying the points...not a reservation. I would also think that going forward the type of points and use year of points will need to be disclosed. I think the whole process will be reworked.

Yes, especially as prior to this awful situation it would have been considered such a low-probability event that the brokers should easily have been able to insure against it quite cheaply. If any of the brokers do go out of business it will be a harsh, awful lesson about the need to think very hard indeed about what could possibly go wrong with your business model, and how to protect yourself against it, no matter how unlikely it seems. I expect that going forward, the days of a renter paying by credit card and the points owner receiving 75% up front will be over. In the new world, one model that could work would be for the renter's money to go into a segregated escrow account, with the points owner receiving nothing upfront, and at the conclusion of a successful stay the money is released and paid to the points owner (minus the broker's commission).

 

[MICKIMINI]

And, to throw another hypothetical into this... Let's say a broker is overwhelmed with charge backs to the point they have to close. What will happen to the reservations booked, but yet haven't taken place? The owners, upon hearing that the broker has gone out of business, know they aren't getting that last 30% from the broker. The renter has paid all of their reservation up front. Put yourself in both shoes. The situation isn't pretty from either side.

SO TRUE! I have two rentals coming one was just made last Friday and the other a couple weeks ago. Now the renters obviously in this day and age, knew this thing was a full blown crisis, but nevertheless contacted the broker and the broker made a deal. I was the random owner for those two renters... One is for October and one for January. It did occur to me this week that there may not be a broker when those reservations occur. I will honor both and certainly not cancel them - but I am not allowed to reach out to the renter and I do have to wait until "check in " day to get my 30% balance. If there is no broker, I won't get the 30% but the renters will have checked in....worse, if the resorts are closed - YIKES, I can't even process that

 

[Sandisw]

That's what I'm saying. A couple posters are suggesting the contracts will change to stating they are renting points instead of rooms. Points are useless to a non-owner and the owner can't assign them anyway. In the case we are having now, even if they wrote to contract that way, we'd be in the same situation as they cannot provide points to the renter. They'd still be looking at a refund situation.

Ahhhhh! Now I get it!

Yes, correct. You can’t rent something that doesn’t exist. What I am noticing, though, is that we have People who are upset that DVC is not bending rules for the points, other than holding, and will end up losing points...which is clearly part of the rules and contract that banking and borrowing are final transactions.

Yet, we also have people that don’t believe that the closing of the resort should be considered a valid reason for a renter to claim an exception because it says non refundable,

Not meant to be critical, but in reality, it Is the same thing. A renter out $2k is no different than a member who is losing points because a resort closed.

 

[MICKIMINI]

Yes, especially as prior to this awful situation it would have been considered such a low-probability event that the brokers should easily have been able to insure against it quite cheaply. If any of the brokers do go out of business it will be a harsh, awful lesson about the need to think very hard indeed about what could possibly go wrong with your business model, and how to protect yourself against it, no matter how unlikely it seems. I expect that going forward, the days of a renter paying by credit card and the points owner receiving 75% up front will be over. In the new world, one model that could work would be for the renter's money to go into a segregated escrow account, with the points owner receiving nothing upfront, and at the conclusion of a successful stay the money is released and paid to the points owner (minus the broker's commission).

Money changing hands is what makes a transaction. I don't believe any owner would rent with no deposit IMHO.

 

[Yinn]

And, to throw another hypothetical into this... Let's say a broker is overwhelmed with charge backs to the point they have to close. What will happen to the reservations booked, but yet haven't taken place? The owners, upon hearing that the broker has gone out of business, know they aren't getting that last 30% from the broker. The renter has paid all of their reservation up front. Put yourself in both shoes. The situation isn't pretty from either side.

How’s your faith in humanity?

As an owner..
Option 1: Honor your agreement anyway. We get the renters contact info during reservation and can reach out to them if we wanted.

Option 2: We get their contact info, I don’t think they get ours. Cancel the reservation, take the points, go on a cruise, get Coronavirus, and see if Karma is real.

As a renter:
Best Option: File a credit card fraud claim.

 

[Sandisw]

And, to throw another hypothetical into this... Let's say a broker is overwhelmed with charge backs to the point they have to close. What will happen to the reservations booked, but yet haven't taken place? The owners, upon hearing that the broker has gone out of business, know they aren't getting that last 30% from the broker. The renter has paid all of their reservation up front. Put yourself in both shoes. The situation isn't pretty from either side.

Didn’t think of that. I could be in that boat as my renter doesn’t check in until August. Now, I would certainly let the renter keep the reservation and eat the 30%, but since we have no contact info, I am not sure I would even be able to let them know.

 

[fsjking]

Ahhhhh! Now I get it!

Yes, correct. You can’t rent something that doesn’t exist. What I am noticing, though, is that we have People who are upset that DVC is not bending rules for the points, other than holding, and will end up losing points...which is clearly part of the rules and contract that banking and borrowing are final transactions.

Yet, we also have people that don’t believe that the closing of the resort should be considered a valid reason for a renter to claim an exception because it says non refundable,

Not meant to be critical, but in reality, it Is the same thing. A renter out $2k is no different than a member who is losing points because a resort closed.

Oh I agree this is a bad deal all around. No one is winning in this scenario. You are going to have renters who paid for something, are not getting it, and expect a full refund. You have owners who did nothing wrong, and expect to be paid for doing what they agreed to. You have the rental companies who did nothing wrong, but are expected to be paid/refunded by both of them. The "easy" answer of DVC extending the points isn't the "easy" answer because they may not contractually be able to, and if they do, it's going to make already hard to get reservations harder to get. I have my opinions, but I'm not directly affected by this. I am intrigued by the legal questions and the ramifications on the rental industry after this though.

 

[Van Houten]

The "easy" answer of DVC extending the points isn't the "easy" answer because they may not contractually be able to, and if they do, it's going to make already hard to get reservations harder to get.

Going by the letter of DVC contract, DVCMA does not have any obligations to make expiring or otherwise impacted points "usable", those are expected to be forfeited and void. They seem to have bent some rules a bit at the beginning of this event, and already backtracked on it - which is something also listed as an option DVCMA may exercise at their discretion. Contractually, DVCMA is also allowed to redefine the entire points model as they see fit, including suspending all borrowing and banking, changing home resort timeframes etc.