DVC plans to target commercial renters

[tx911]

By FL timeshare law DVC has to let members do rentals. Could they limit that to one or two a year? I’m not sure they can or even want to go that route. DVC can only limit that the contract is to be for personal use, with the occasional rental allowed when unable to use the points. Coming from that angle, points that reasonably never appear to be for personal use, isn’t that where they’d be able to crack down?

I would say allow a certain percentage of point to be rented or used by someone other than the owner.

But have an appeal mechanism for extenuating circumstances.

 

[McCrae]

I read the old discussion from 2008 and from there is seems that any limitation should apply for all owners, since DVC are an owner too it applies to them too.

Also read that someone mentioned that there had been a lawsuit covering this, so it might not fly if someone challenges DVC.

That are my thoughts as well. Probably more an attempt to put off more people doing commercial renting.

 

[Cyberc1978]

That are my thoughts as well. Probably more an attempt to put off more people doing commercial renting.

Yeah scare tactics

 

[Brian Noble]

IRC you were part of that thread

And I'm going to guess that I said that the documents carve out this right the last time too. If I didn't, I was wrong then.

This is a totally ordinary clause that many other timeshare developers use. Wyndham, for example, has similar language.

I suppose the many timeshare developers and their various in-house counsel that drafted the language could all be wrong and this group of DISers was correct. I doubt it though.

 

[Chuck S]

Can they bring back the the room lottery, but only apply it to certain resorts and room types? Let's say you want a Value Studio for Christmas Week. You'd register and be entered into a lottery with every other DVC Owner that wants thoat room for those days, regardless of home resort*, for that room and week. Would that be fair? It would solve the problem of commercial renters taking the most "desirable" rooms, even if they use a bot. But of course, your odds of actually getting hte room aren't really any better. B ut it would be fair, wouldn't it?

*Home resort priority was suspended for the lottery. And yes, it was a real thing for two or three years.

 

[Sandisw]

If you are renting points for money instead of using them for your vacation, that's commercial activity.

The problem is this is allowed to some degree by DVC, and desired to some degree by most if not all owners.

The real crux of the matter to me is defining when this type of use is excessive. A company cannot go on a vacation, so by definition all of their point usage will be for commercial gain.

For the average owner, perhaps a rule that a certain percentage of you total points has to be used for your personal vacation could work? But I think a lot of owners would oppose even this limitation.

It’s also allowed by FL timeshare law. We know the new contracts use the words “pattern of rental activity” that DVC decides is not okay.

I can now see them making that really strict given the amount of owners who want things changed.

They have to at least allow one rental per year…but they could simply say that a membership can not have more than 2 rentals a year, every rental agreement needs to be sent to DVC, and if the guests are family and friends, you submit something signed by them that they did not pay for the reservation.

Most strangers are not signing that, owners can let as many friends and families use their points, and it pretty much makes commercial anything above 2.

 

[Sandisw]

After reading the old discussion from 2008 it seems that any rental restriction should apply to all owners. Since DVC is an owner too they should obey or follow same rules. Some even mentioned that there had been lawsuits covering that.

IF that’s the case I don’t know how DVC can try an enforce that.

Just because DVC write something in a document does not make it a legal rule or make it right.

It only takes 1 person or entity to challenge DVC and then we will see if it fly or not.

I bet some of the big rental companies will challenge DVC - they have all to win and nothing to lose.

The contract allows for DVC and DVD to be exempt from the rules, especially since we agreed to allow it so we can trade, and get breakage income.

 

[BlueGreen5]

Can they bring back the the room lottery, but only apply it to certain resorts and room types? Let's say you want a Value Studio for Christmas Week. You'd register and be entered into a lottery with every other DVC Owner that wants thoat room for those days, regardless of home resort*, for that room and week. Would that be fair? It would solve the problem of commercial renters taking the most "desirable" rooms, even if they use a bot. But of course, your odds of actually getting hte room aren't really any better. B ut it would be fair, wouldn't it?

*Home resort priority was suspended for the lottery. And yes, it was a real thing for two or three years.

I don't know how that could work, given that there will be potentially dozens or hundreds of contracts vying for a room, all with different timelines. Like what if you have just 1 room in inventory for a given day. You have one person who wants it just for that day, one person who wants it for a few days, and then one person who wants it for a week. What if the person who wants it for a week wins, but then subsequently doesn't win the lottery the next day, or the fifth day, etc.? They obviously no longer want the first day they won. So then what - do you re-run the lottery for the first day? What if the weekend person wins the second time around? You've already declared a winner for day 2, so they don't want it either now. So then, I guess, you default to the one-dayer? Or, what happens if someone cancels? This multiples exponentially so much that it makes my head hurt!

 

[Sandisw]

Can they bring back the the room lottery, but only apply it to certain resorts and room types? Let's say you want a Value Studio for Christmas Week. You'd register and be entered into a lottery with every other DVC Owner that wants thoat room for those days, regardless of home resort*, for that room and week. Would that be fair? It would solve the problem of commercial renters taking the most "desirable" rooms, even if they use a bot. But of course, your odds of actually getting hte room aren't really any better. B ut it would be fair, wouldn't it?

*Home resort priority was suspended for the lottery. And yes, it was a real thing for two or three years.

I just read that again and they can definitely based it on demand of some rooms and resorts and not others.

So, they have the FCFS list that owners join if they want that room type…they get to decline a reservation once,,,after that, they are removed from the list and must go to the end of the line.

The drawback is that the owners get only a one month advantage and not 4 months. But, for those really hard to get rooms it might be better to have booking this way.

It is pretty detailed and it seems it would fit for certain situations. I plan to share those thoughts with DVC.

 

[Sandisw]

I don't know how that could work, given that there will be potentially dozens or hundreds of contracts vying for a room, all with different timelines. Like what if you have just 1 room in inventory for a given day. You have one person who wants it just for that day, one person who wants it for a few days, and then one person who wants it for a week. What if the person who wants it for a week wins, but then subsequently doesn't win the lottery the next day, or the fifth day, etc.? They obviously no longer want the first day they won. So then what - do you re-run the lottery for the first day? What if the weekend person wins the second time around? You've already declared a winner for day 2, so they don't want it either now. So then, I guess, you default to the one-dayer? Or, what happens if someone cancels? This multiples exponentially so much that it makes my head hurt!

You have to read the actual language in how it works. Basically DVC tells you they are creating a list for a specific room, date/, etc

They then open it up for owners to join the list…FCFS… once they begin booking, DVC calls you and your booking is made…there is no longer owners booking the rooms themselves.

 

[MICKIMINI]

The starting assumption is that Disney has identified someone who is a commercial renter in violation of the contract that the individual signed.

Forget the corner cases. Let’s say Disney identifies one person or organization that is renting out 1000 reservations per year. Can anyone seriously argue that this is not a commercial renter?

If the renter has been found to be in violation of the contract, then presumably Disney has many possible remedies at its disposal.

Presumably, the first step is to notify that DVC member that they are in violation and to issue a cease and desist.

If the commercial renter continues to rent their points, then what’s next?

Some have suggested that Disney could simply start canceling that commercial renter’s reservations. The issue here is that the commercial renter could possibly countersue. The commercial renters dues are paid in full and yet Disney is preventing them from being used.

As a less severe remedy, I’m suggesting that Disney could limit that commercial renter’s booking options.

Potentially all those things could happen...and what happens to the unknowing renters who show up and don't have a villa they paid for? You've got the "big" rental company, an unwitting owner who rented their points through the rental company and the family who sought to secure a reservation maybe as far as11 months out. It is way more than just the rental as we all understand the financial commitment for any WDW vacation.

With potentially 1000's of reservations and a rental company now having financial issues (if profit weighs heavily on rentals perhaps?) and an owner who is trusting and just waiting for final payment, what's to say that couldn't happen? Many here will remember the covid debacle with some rental companies. Contracts may have been updated but I still think it could be a mess if a rental company is leveraging rental payments. Just a thought...

 

[sndral]

The POS does say that owners do not need DVCs permission to rent and the terms of rental are up to the owners but the contract needs to includes language about the rules for being a resort guest.

So, I am sure that what they do to help enforce the violations will take those aspects into consideration.

When interpreting a contract the courts assume that all the words in the contract have meaning, here’s what my VGF doc.s say:
“No owner may directly rent…without making a prior reservation of an available vacation home…on a first come, first served basis. DVD’s approval of a rental by an owner is not required after a reservation has been made in the renter’s own name. However, ownership Interests should not be purchased with any expectation that Vacation Homes may be reserved and rented to third parties [emphasis added].”
I read that clause as owner’s not needing DVC’s permission in some, but not all cases. The no permission needed reservations must comply with first come/first served - & given that DVC talked about walking & commercial use in the same meeting my assumption is that they are looking at whether walking circumvents first come/first served. Second, & clearer to me, is the language that the no permission needed reservation must be made in the renter’s own name. The fact that DVC requires you to call in order to change the lead guest’s name I assume is because of this language.
Given that DVC has announced it is now scrutinizing rentals/walking & will be taking steps to curtail commercial renting, I think it’s important to pay attention to the specific contractual language rather than rely on the way things have been done in the past.
However, even if you have not violated first come/first served (walked the reservation) or changed the name you made the reservation in (spec confirmed reservation rentals,) your reservation made in someone else’s name may still run afoul of DVC because the contract & governing documents emphasize in several places that ownership interests are offered for ‘personal use & enjoyment only’ & include this clause “…use of the Grand Floridian Villas for commercial purposes (excluding use by the TWDC Companies) or any other than personal use described in this [POS]…is expressly prohibited [emphasis added].”
When a contract uses the phrase ‘expressly prohibited’ it’s like a big flashing light saying pay attention to this bit.
DVC’s previous attempts to control commercial use have included max point ownership levels & creating a rebuttable presumption of commercial use once 20 reservations were made. It’ll be interesting to see what they come up with next, my guess is it’ll be limiting the number of modifications you can make to a reservation to deal w/ walking & limiting the ability to change the lead guest name to deal w/ confirmed reservation spec rentals. If that doesn’t work, then maybe going to additional changes such as a guest certificate for non owner reservations type system. My hope is they’ll do a little forensic examination of their owners to ferret out the entities using LLCs & the like to hide how many points they actually control & start enforcing the max ownership levels spelled out in the doc.s.

 

[Mommb]

Potentially all those things could happen...and what happens to the unknowing renters who show up and don't have a villa they paid for? You've got the "big" rental company, an unwitting owner who rented their points through the rental company and the family who sought to secure a reservation maybe as far as11 months out. It is way more than just the rental as we all understand the financial commitment for any WDW vacation.

With potentially 1000's of reservations and a rental company now having financial issues (if profit weighs heavily on rentals perhaps?) and an owner who is trusting and just waiting for final payment, what's to say that couldn't happen? Many here will remember the covid debacle with some rental companies. Contracts may have been updated but I still think it could be a mess if a rental company is leveraging rental payments. Just a thought...

Owners using their points for commercial purposes are a different issue from companies that facilitate rentals by handling communication between renters and owners. If DVC decides to enforce rules against commercial renting, they would impose penalties on the owners, who would not be "unwitting" -- they would know they have been making money by renting points beyond their personal needs. (That's not to say DVC couldn't also go after the companies, but that's a different issue.)

Someone renting through one of those companies, or through a private transaction, would have no way of knowing how many other rentals the owner has made. It would not be fair to people who made good-faith rental reservations to have those reservations cancelled.

The easiest way to avoid this problem would be to say that someone who is determined to be a commercial renter in violation of the rules would be unable to make future reservations in anyone else's name (maybe for the rest of the use year or some other time period) but that reservations made previously may stay in place.

 

[Sandisw]

Owners using their points for commercial purposes are a different issue from companies that facilitate rentals by handling communication between renters and owners. If DVC decides to enforce rules against commercial renting, they would impose penalties on the owners, who would not be "unwitting" -- they would know they have been making money by renting points beyond their personal needs. (That's not to say DVC couldn't also go after the companies, but that's a different issue.)

Someone renting through one of those companies, or through a private transaction, would have no way of knowing how many other rentals the owner has made. It would not be fair to people who made good-faith rental reservations to have those reservations cancelled.

The easiest way to avoid this problem would be to say that someone who is determined to be a commercial renter in violation of the rules would be unable to make future reservations in anyone else's name (maybe for the rest of the use year or some other time period) but that reservations made previously may stay in place.

There have been reports in the past few months we’re DVC did indeed cancel reservations that were rented.

Unfortunately, that is a risk for a renter because if they do end up with an owner who gets caught, they could be out of luck.

DVC isn’t in contract with the renter so they don’t need to take that into consideration if they don’t want to.

 

[JackosinDIS]

the contract & governing documents emphasize in several places that ownership interests are offered for ‘personal use & enjoyment only’ & include this clause “…use of the Grand Floridian Villas for commercial purposes (excluding use by the TWDC Companies) or any other than personal use described in this [POS]…is expressly prohibited [emphasis added].”

I think in the interests of a balanced picture of the contract you need to go one step further and look at the definition of ‘personal use’ as described in the POS as follows:

“The personal use of club members, their guests, invitees, exchangers and lessees and for recreational use by corporations…”

So yes, uses other than the personal use described are expressly prohibited, but the POS clearly describes use by lessees as a form of personal use.

 

[sndral]

I think in the interests of a balanced picture of the contract you need to go one step further and look at the definition of ‘personal use’ as described in the POS as follows:

“The personal use of club members, their guests, invitees, exchangers and lessees and for recreational use by corporations…”

So yes, uses other than the personal use described are expressly prohibited, but the POS clearly describes use by lessees as a form of personal use.

I agree that personal use includes the ability to rent/lease in some cases, however, I don’t think this particular language is especially helpful because, as written w/out a comma after exchangers & with the use of a conjunction ‘exchangers and lessees’ the phrase refers to one group & in this case because both terms reference timeshare exchanges - in timeshare exchanges lessee refers to someone who owns a timeshare unit & is a member of a timeshare exchange company - I think ‘lessee’ in this sentence refers to RCI (or IL) exchanges.
In order to have the meaning you suggest the sentence would be written “the personal use of club members, their guests, invitees, exchangers, lessees and for recreational…”
I personally would have also thrown in an Oxford comma after lessees to make it clear that use by corporations is distinct from use by exchangers & lessees, but it’s not strictly required.

 

[JackosinDIS]

I agree that personal use includes the ability to rent/lease in some cases, however, I don’t think this particular language is especially helpful because, as written w/out a comma after exchangers & with the use of a conjunction ‘exchangers and lessees’ the phrase refers to one group & in this case because both terms reference timeshare exchanges - in timeshare exchanges lessee refers to someone who owns a timeshare unit & is a member of a timeshare exchange company - I think ‘lessee’ in this sentence refers to RCI (or IL) exchanges.
In order to have the meaning you suggest the sentence would be written “the personal use of club members, their guests, invitees, exchangers, lessees and for recreational…”
I personally would have also thrown in an Oxford comma after lessees to make it clear that use by corporations is distinct from use by exchangers & lessees, but it’s not strictly required.

Interesting interpretation - I hadn’t looked at it like that. I agree the lack of a comma is not helpful. However, my view is that a comma is implied there, as each item in the list is linked to the ‘club member’. I.e it should be read “their guests, their invitees, their exchangers and their lessees… and for recreational….”

Not great drafting either way.

 

[sndral]

Interesting interpretation - I hadn’t looked at it like that. I agree the lack of a comma is not helpful. However, my view is that a comma is implied there, as each item in the list is linked to the ‘club member’. I.e it should be read “their guests, their invitees, their exchangers and their lessees… and for recreational….”

Not great drafting either way.

Indeed, or perhaps they should have opted for semi colons - see the 5 million dollar comma case https://www.findlaw.com/legalblogs/strategist/oxford-comma-case-settles-for-5m/

 

[JackosinDIS]

Indeed, or perhaps they should have opted for semi colons - see the 5 million dollar comma case https://www.findlaw.com/legalblogs/strategist/oxford-comma-case-settles-for-5m/

It’s not just us then! Interestingly (and sorry to slightly derail the thread here), the Oxford comma is usually excluded (and sometimes viewed as incorrect) in British English (my language), which explains why I read it differently.

P.s. reading this back to myself I realise I may get the award for most boring post on Disboards 2024. I’m not that bad in person, I promise

 

[Genie+]

Can they bring back the the room lottery, but only apply it to certain resorts and room types? Let's say you want a Value Studio for Christmas Week. You'd register and be entered into a lottery with every other DVC Owner that wants thoat room for those days, regardless of home resort*, for that room and week. Would that be fair? It would solve the problem of commercial renters taking the most "desirable" rooms, even if they use a bot. But of course, your odds of actually getting hte room aren't really any better. B ut it would be fair, wouldn't it?

*Home resort priority was suspended for the lottery. And yes, it was a real thing for two or three years.

No that is a distortion.

Home Priority lottery for Special Season is at 13 months, and at 12 months is regardless of Home Resort.