DVC plans to target commercial renters

[nalababybear]

If they are, they bought waaayyyy too many points.

Yeah, that rarely happens in timeshare purchases that have 50 year commits.

 

[Cyberc1978]

Some seem to believe one rental by a member, or perhaps a few, could be found to be a violation of the terms of the POS's declarations. None of the POS's declarations limit the right to rent to one or only a few rentals. The pre-Riviera resorts' declarations expressly allow multiple rentals by a member, and the only restriction is that a member cannot engage in a pattern of rental activity from which the association can reasonably conclude shows the member is engaging in a commercial enterprise.

Those declarations were drafted by lawyers, and there are statutes that use the term commercial enterprise, and it has a generally recognized legal meaning: it refers to someone engaging in the "business'' of something. There are likely some members who do many rentals as a business, but the likely majority of rentals do not fit within the restriction in the declarations, e.g., doing some profitable rentals to offset dues, doing some rentals to use points you will not be able to use, doing rentals of confirmed reservations that you learn you cannot use, doing some rentals to friends or family, are not things that lead to the conclusion that one is in the business of doing rentals. In June 2008, DVC itself recognized the limitations to its power to restrict when it created a rule that said that any member doing more than 20 reservations in a year would be presummed to to be violating the rental restriction, but it was a presumption that the member could overcome.

In essence. doing one or some reservations for profit is not a violation of the terms of those POS's. The rules stated in the POS's have changed for the three newly created DVC resorts starting with Riviera, and with the most retractions in the CFW POS, but even those do not say or imply that a single or a few rentals in a year could be a violation. You cannot state a member has a right to rent and then say just doing a few rental violates the rules.

Moreover, particularly as to the pre-Riviera DVC Resorts (which includes the additions to VGF and Poly), DVC faces the problem that what is in the declarations is a "material" term, and the ability to do some rentals cannot be reduced by any new, more restrictive "rule" absent an amendment to the declarations, which is subject to the vote of all the members of a resort.

Which reply, and what part of it specifically?

The one above.
Specifically that DVC can’t limit owners to only a few rentals and the last section of his reply.

 

[Sandisw]

Someone in another forum said its per contract not per membership, if that is true or not is up for debate. Obviously per contract would make no impact, per membership slight impact, per member much bigger impact. But Disney will also have to figure out these people who have multiple LLC's Disney isnt a fly by night company, I think they have the full capability to figure this out, especially if it is impacting their bottom line, ie: their own cash rentals.

It is per membership as the reservations get booked under that.

That is reason that all these LLCs etc have found ways around the rules. For example, my Aug UY is owned with my adult kids.

If I pushed the limits in my June UY, which they are not owners, it would be tough ti justify penalizing them if that membership isn’t doing it.

As @drusba explained, the language provides info and material changes to the contract are an issue.

The world reasonable is used in those pre RIV contracts. And, as an owner, I want that to be part of any potential enforcement and changes.

 

[dvcsince93]

That would create a lot of hoops for both members and guests to jump though to use the membership the way they have for years and years. Some may not find the product as appealing, hurting their sales. It inconveniences almost every legitimate member to get data, when I believe it is DVCs opinion that the vast majority of rental problems are from relatively few members and LLCs with a very large number of points each.

They should already have the data needed to go after members like this without a huge influx of superfluous data that would be generated from having members and renters declare every reservation. They would be requiring extra work from all members, to get extra data that they would need to sort through, to do basically the same thing they can already do. IE: Creating more work for members, which in turn creates more work for them. That is a lose-lose situation and I would probably guess something like that would be a last resort if their first attempts fail horribly. Why create work for thousands of people when you quite literally could get started with one person and the data they already have.

I disagree checking a couple of boxes or dropdown menus on your reservation form is not a lot of hoops and is not a great inconvience. And while they may have the data, as it stands, not sure they can sucessfully distinquish betweens gift and rentals.

 

[Tatebeck]

I disagree checking a couple of boxes or dropdown menus on your reservation form is not a lot of hoops and is not a great inconvience. And while they may have the data, as it stands, not sure they can sucessfully distinquish betweens gift and rentals.

They don't need to distinguish between them for the vast majority of members. They are presumably primarily looking at members with a ton of points first. I doubt most members with 4000-8000 points and part of multiple LLCs are "gifting" all the reservations away each year when they use 0 of their own points lol.

And as you mentioned people would still game the system anyway. Perfect analysis requires perfect data. "Oops I checked the wrong one" and "I misunderstood" will happen more than you think, and would be of course used as an excuse for anyone lying and gaming the system.

 

[VGCgroupie]

They don't need to distinguish between them for the vast majority of members. They are presumably primarily looking at members with a ton of points first. I doubt most members with 4000-8000 points and part of multiple LLCs is "gifting" all the reservations away each year when they use 0 of their own points lol

Exactly

 

[Brian Noble]

Specifically that DVC can’t limit owners to only a few rentals and the last section of his reply.

Well, it's been my experience that @drusba has lots of opinions about what the legal frameworks do and do not allow. They are probably right about most of them, and in any event have more informed opinions than I do. I know a whole lot about very little, and timeshare law is not part of that "very little."

All I can tell you is what other timeshare developers have actually done in practice. And what they have done in practice varies from "sending out warning letters" on up to and including freezing an entire ownership indefinitely. A few people have fought back. As far as I know, none of them got very far. The timeshare developer has first-mover advantage, de facto control of the account, plus more money and a deeper bench of in-house counsel than even a well-funded individual owner. If they want to go to the mattresses with some particular owner, they are going to win, and particularly because they aren't going to choose marginal cases to start with. They are going to start with slam dunks, and the chilling effect of those will do more to curb rentals than anything they'd do directly

Perhaps more importantly, in pretty much all of these instances, the timeshare developer also has clearly won the court of public opinion. Most owners are just owners. Very few owners rent often enough to get swept up in whatever dragnet the developers run out. And, when the details come to light, most owners look at the ones in-the-net and think "It's about time someone put a stop to that." This is already playing out amongst the DVC owners. I predict the internecine fighting only gets worse from here.

 

[Sandisw]

I agree that DVC first needs to ascertain the scope of the problem, but I would put the onus on the members to inform them about rentals.

For example, DVC could require that at the time a reservations made or modified, the owner inform them if the reservation was for their use/a gift or a rental. That way, whenever someone decided later to rent the reservation, they would have to tell DVC when they modified the resevation. Moreover, if a rental, the owner would inform DVC where the rental was being listed.

In addition, DVC could also require that for check-in, the renter has to disclose if they were gifted the reservation or are renting the unit and if so, through whom.

In fact, DVC could also require the rental companies to provide them with the list of all the rentals and the member number of the people making the rentals.

None of these requirements would prevent anyone from renting but It would give DVC a better idea of the scope of renting. If people are comfortable with their actions, they should not have a problem telling DVC if it was a rental.

Moreover, to motivate people to be honest, DVC could state that if the information from the three sources was not consistent or accurate, the reservation could be canceled as of the date of check in. This would allow them to try and minimize gaming the system. Although, as with all rules, it would never be stopped completely.

The information that DVC obtained regarding rentals could then be used to decide the scope of renting within the system. For example, they would better know if certain renters were renting all our most or most of their points. It would also allow DVC to confidentially contact these people who do commercially rent.

The contract is between the owner and DVC and not the rental companies.

I don’t think they would have any legal justification to require a third party business to disclose their records.

DVC can ask an owner to provide information as to whether something is a rental or not but since we have the right to rent just not turn our membership into a business, I think whatever rules and enforcement are in place will to revolve around that.

Why does it matter how an owner found a renter or which reservation they made to rent? Of course, high demand rooms rent for more but that doesn’t mean it’s a business

It may simply be an owner maximizes how much they get by renting fewer reservations.

 

[Sandisw]

Well, it's been my experience that @drusba has lots of opinions about what the legal frameworks do and do not allow. They are probably right about most of them, and in any event have more informed opinions than I do. I know a whole lot about very little, and timeshare law is not part of that "very little."

All I can tell you is what other timeshare developers have actually done in practice. And what they have done in practice varies from "sending out warning letters" on up to and including freezing an entire ownership indefinitely. A few people have fought back. As far as I know, none of them got very far. The timeshare developer has first-mover advantage, de facto control of the account, plus more money and a deeper bench of in-house counsel than even a well-funded individual owner. If they want to go to the mattresses with some particular owner, they are going to win, and particularly because they aren't going to choose marginal cases to start with. They are going to start with slam dunks, and the chilling effect of those will do more to curb rentals than anything they'd do directly

Perhaps more importantly, in pretty much all of these instances, the timeshare developer also has clearly won the court of public opinion. Most owners are just owners. Very few owners rent often enough to get swept up in whatever dragnet the developers run out. And, when the details come to light, most owners look at the ones in-the-net and think "It's about time someone put a stop to that." This is already playing out amongst the DVC owners. I predict the internecine fighting only gets worse from here.

IIRC, she is a lawyer so her opinions are based on her legal interpretation of the contract and how the law fits.

Just because another timeshare was able to do things, doesn’t mean that the DVC contracts would allow the same thing.

While I know DVC and the board like to push limits, I still think when they do they do so with the belief it meshes.

And, having been at the VGF meeting where it was discussed in depth, the statements did support our right to rent but that the commercial aspect was at issue.

 

[lowlight]

Here’s the issue:

You have 1000 points. You rent out 600 of them every year in 2-3 spec rentals for units you get ~$30 a point for. You use this income to pay the MF’s and also to pay for your yearly family trip. In your mind, you aren’t a commercial renter and aren’t part of the problem, you’re just a personal owner offsetting their expenses. I disagree. The amount of owners doing this is likely wildly underestimated in these threads, but they usually self identify if you know what to look for in responses.

 

[tx911]

Here’s the issue:

You have 1000 points. You rent out 600 of them every year in 2-3 spec rentals for units you get ~$30 a point for. You use this income to pay the MF’s and also to pay for your yearly family trip. In your mind, you aren’t a commercial renter and aren’t part of the problem, you’re just a personal owner offsetting their expenses. I disagree. The amount of owners doing this is likely wildly underestimated in these threads, but they usually self identify if you know what to look for in responses.

I agree, but idk if there's any way of policing this without very negative affects on the rest of the members. Perhaps limiting rentals to a specific percentage of your points?

Maybe even with a system of "banking and borrowing" rental ability similar to what we do with vacation points. IOW, you can rent say 40% of your points this year or borrow your 40% rental ability from next year and rent 80% this year and nothing next year.

 

[Tatebeck]

Here’s the issue:

You have 1000 points. You rent out 600 of them every year in 2-3 spec rentals for units you get ~$30 a point for. You use this income to pay the MF’s and also to pay for your yearly family trip. In your mind, you aren’t a commercial renter and aren’t part of the problem, you’re just a personal owner offsetting their expenses. I disagree. The amount of owners doing this is likely wildly underestimated in these threads, but they usually self identify if you know what to look for in responses.

I don't currently do that, but I could see myself wanting to do something like it in the future for years that I don't want to use all of my points, and I would like to reserve that option. Maybe not the $ per point max but at $20 something per point.

As you say, I (and I assume many others) believe that that would fall under personal vacation use. At the end of the day, if you are using ALL of your points (and any money earned from renting some of those points) for either stays at Disney, to pay for stuff at Disney, or to pay for your alternate vacation choice, that IS a personal vacation use. In the end there has been no NET money received and it would be very difficult to consider that a commercial enterprise.

Just like if you swap all of your points to the Disney collection, Adventures by Disney, or put all of your points into Interval International. You just used one type of points for a different trip is all

 

[MICKIMINI]

I don’t. I never have rented and never will. So I’m not concerned with “unintended consequences”

I am happy to hear you never had to rent points. I hope you have always been able to use up your points. That is great!

We have had years when for one reason or another we could not go and did not want to lose money, so we rented. It is allowed. During covid we sent our son and DIL as many times as they wanted to use up points and even sent them to Aulani. In the past couple years we've sold several contracts because we knew my parent's are aging, our son and DIL are doing more European trips and we just built a new home. We spent 5 weeks at WDW in 2022 and gave our son and DIL almost two weeks with us the same year. We spent as many points as we could and still ended up renting some points so not to lose them. We will wait until 2026 to travel to WDW again since we are now under 200 points. Life just gets in the way sometimes.

It is important IMO to allow members a reasonable amount of rentals. Bots do not count and should be squashed.

 

[drusba]

Mentioned previously is the Wyndham rule and asked is whether DVC could adopt the same. The answer is no. My understanding of the Wyndham rule is that the owners have a priority reservation right for certain designated times during the year to make reservations for which the owner is the lead quest, not for others, and during that priority period in any given calendar year, the owner can make up to no more than two total reservations for persons other than the owner (with the exception that an owner's reserving two or more different rooms for the same time, one for the owner and the others for non-owners, does not count toward that two reservations maximum).

Unlike Wyndham, the DVC POS's declare that all reservations are to be done on a first come first served basis, with no priority given to reservations that name the member as a lead guest. The Wyndham rule violates that rule and thus could be adopted by DVC/DVD only by first making a material change to the declarations which it cannot legally do without submitting that change to the vote of all the members. Moreover, under the condominium statute in Florida, applicable to Florida DVC resorts other than CFW, any such change that would reduce the ability of the members to make reservations has to be put to a vote of the members, and any existing members who vote against the change will not be required to follow the new rules. Fl. Stat. §718.110(13). Noteworthy is that Wyndham's addition of its rules was not subject to that requirement because its applicable timeshares are, like CFW, not formed under the condominium act.

Also mentioned above is the Disclosure Statement applicable to BVTC, which mentions that BVTC could make amendments that have an impact on a members' ability to rent and reserve rooms. That does not mean BVTC can make any rules that actually further restrict a member's right to make reservations or do rentals, which rights are stated in the Declarations. BVTC does have the power to add additional resorts to the DVC Reservation Component (which covers members' reservations of unowned DVC resorts) and powers to remove resorts from that Component due to damages sustained via natural events. Exercise of either of those powers and modifications of them, could as stated in the Disclosure Statement, adversely affect members' ability to rent or reserve rooms. However, BVTC does not have any power to change or limit the members' right to make reservations and do rentals as provided in the Declarations.

There is only one Disney party given the right to make changes to the Declarations, and that is DVD, and its right to do so without a vote of the members expressly excludes being able to make changes that "would prejudice or impair to any material extent the rights of any Owner." In essence, no Disney entity can actually further limit the rights provided in the Declarations that a member already has to make reservations and do rentals, absent an actual vote of the members.

Also, mentioned above as being certain is that someone who rents all their points in a use year must be in violation of the commercial enterprise clause. Many above keep referring to ithe restriction as merely saying it prohibits any "commercial" activity. As I have mentioned before it says acting as a "commercial enterprise," which means acting as a business, and requires a "pattern of rental activity" to even begin to show that. There is no certainty to the conclusion that someone renting all points in a use year is necessarily violating the restriction. For example, what happens if a member has been subject to something, such as an injury, that prevents him from traveling to Disney for a long time, such as a year, and thus the member rents all his points because the member cannot use them in that year. Similarly, what happens when the member works for a company that sends the member out of the country for a year, unable to go to Disney and the member rents all the points. Those and other situations could exist that would prove the member is not a commercial enterpricse in the business of doing DVC rentals even if the member rents all of his points in a year.

 

[Brian Noble]

To be clear, I don't have an opinion about whether or not DVC reservations can have something similar to the Owner Priority periods. I can imagine a variety of ways to argue it, and can imagine that reasonable people might take different positions.

However, I don't think that was the part that made a material difference in the presence or absence of large-scale renters.

What I *do* think made a difference is more hard-line approaches to specific owners who were deemed to be on the wrong side of the commercial use provision---and, in particular, freezing a few high-profile accounts, plus cancelling a handful of reservations from those same accounts.

It doesn't take very much of that to flush out a LOT of people who had been renting and decide there are greener pastures somewhere else. And, those are actions against individual owners that (the Developer claims) are "using commercially". They are not changes to any of the reservation rules, etc. You don't exactly have to read between the lines to see that DVC is contemplating something at least vaguely like this.

Will it be as heavy-handed? No idea. But I won't be surprised if it is in the ballpark.

 

[nalababybear]

Here’s the issue:

You have 1000 points. You rent out 600 of them every year in 2-3 spec rentals for units you get ~$30 a point for. You use this income to pay the MF’s and also to pay for your yearly family trip. In your mind, you aren’t a commercial renter and aren’t part of the problem, you’re just a personal owner offsetting their expenses. I disagree. The amount of owners doing this is likely wildly underestimated in these threads, but they usually self identify if you know what to look for in responses.

Some of you guys really are funny believing rentals routinely bring in $30 per point. Just look over at the Disboards rental forum. I get folk not liking renting out. Acknowledge the typical rates is part being honest about it too.

 

[theMoreDisneytheBetter]

We spent 5 weeks at WDW in 2022 and gave our son and DIL almost two weeks with us the same year.

Wow! How many points did you have at that point? Or were you in a use it or lose it situation?

Though thinking about it my mom will have spent about 5 weeks at Disney this year on various trips and we like our space. Maybe that doesn’t seem like a lot after all.

 

[dvcsince93]

Mentioned previously is the Wyndham rule and asked is whether DVC could adopt the same. The answer is no. My understanding of the Wyndham rule is that the owners have a priority reservation right for certain designated times during the year to make reservations for which the owner is the lead quest, not for others, and during that priority period in any given calendar year, the owner can make up to no more than two total reservations for persons other than the owner (with the exception that an owner's reserving two or more different rooms for the same time, one for the owner and the others for non-owners, does not count toward that two reservations maximum).

Unlike Wyndham, the DVC POS's declare that all reservations are to be done on a first come first served basis, with no priority given to reservations that name the member as a lead guest. The Wyndham rule violates that rule and thus could be adopted by DVC/DVD only by first making a material change to the declarations which it cannot legally do without submitting that change to the vote of all the members. Moreover, under the condominium statute in Florida, applicable to Florida DVC resorts other than CFW, any such change that would reduce the ability of the members to make reservations has to be put to a vote of the members, and any existing members who vote against the change will not be required to follow the new rules. Fl. Stat. §718.110(13). Noteworthy is that Wyndham's addition of its rules was not subject to that requirement because its applicable timeshares are, like CFW, not formed under the condominium act.

Also mentioned above is the Disclosure Statement applicable to BVTC, which mentions that BVTC could make amendments that have an impact on a members' ability to rent and reserve rooms. That does not mean BVTC can make any rules that actually further restrict a member's right to make reservations or do rentals, which rights are stated in the Declarations. BVTC does have the power to add additional resorts to the DVC Reservation Component (which covers members' reservations of unowned DVC resorts) and powers to remove resorts from that Component due to damages sustained via natural events. Exercise of either of those powers and modifications of them, could as stated in the Disclosure Statement, adversely affect members' ability to rent or reserve rooms. However, BVTC does not have any power to change or limit the members' right to make reservations and do rentals as provided in the Declarations.

There is only one Disney party given the right to make changes to the Declarations, and that is DVD, and its right to do so without a vote of the members expressly excludes being able to make changes that "would prejudice or impair to any material extent the rights of any Owner." In essence, no Disney entity can actually further limit the rights provided in the Declarations that a member already has to make reservations and do rentals, absent an actual vote of the members.

Also, mentioned above as being certain is that someone who rents all their points in a use year must be in violation of the commercial enterprise clause. Many above keep referring to ithe restriction as merely saying it prohibits any "commercial" activity. As I have mentioned before it says acting as a "commercial enterprise," which means acting as a business, and requires a "pattern of rental activity" to even begin to show that. There is no certainty to the conclusion that someone renting all points in a use year is necessarily violating the restriction. For example, what happens if a member has been subject to something, such as an injury, that prevents him from traveling to Disney for a long time, such as a year, and thus the member rents all his points because the member cannot use them in that year. Similarly, what happens when the member works for a company that sends the member out of the country for a year, unable to go to Disney and the member rents all the points. Those and other situations could exist that would prove the member is not a commercial enterpricse in the business of doing DVC rentals even if the member rents all of his points in a year.

thanks for the info.

 

[theMoreDisneytheBetter]

Some of you guys really are funny believing rentals routinely bring in $30 per point. Just look over at the Disboards rental forum. I get folk not liking renting out. Acknowledge the typical rates is part being honest about it too.

Routinely, no, but some confirmed rentals can. My guess is that it will be targeted first, especially because Disney could just rent the reservation itself if it has any question about the pattern of rentals.

 

[Nabas]

Some of you guys really are funny believing rentals routinely bring in $30 per point. Just look over at the Disboards rental forum. I get folk not liking renting out. Acknowledge the typical rates is part being honest about it too.

For example, a DVC rental website is listing a confirmed Feb 25 AKV Value Studio for $384. A Value Studio for that date requires 12 points. $384 / 12 = $32 per point

A May 7 AKV-Value room is listed for $298 (8 points). $298 / 8 = $37.25 per point

A September 7 AKV-Value room is listed for $301 (7 points). $301 / 7 = $43 per point

It's not uncommon for certain DVC rental sites to list AKV-Value and BWV-Standard room for rates that exceed $30 per point.