DVC plans to target commercial renters

[DougEMG]

I don't disagree with any of that. The Statute very clearly assigns the right to limit rental activity to the developer. The issue is (and I also agree) whether or not the POS is sufficiently limiting in its language. As we've said all along, no one is saying DVC should (or even could) completely restrict all renting (at least under any contract signed to-date), but the reference to commercial renting is very vague and arguably ambiguous enough to give them (DVC) enough room to argue that they HAVE reserved the right to limit or stop any renting that they deem to be commercial, under whatever standard they have deemed to apply.

As I've said, my only real bone was with the incessant argument that the right to rent, without limit or exception, is guaranteed under Florida law.

Is that kind of what they did in the trust?

Correct me if I am remembering this wrong but the trust membership rules, and the deed ownership rules are very different around renting.

 

[DougEMG]

So, what percent of the rooms in the system are being taken by commercial renters? Anyone got an idea? I've heard of AKV value rooms and BWV standard studios, anything else in the system hard to come by? Exactly how big or small is this problem.

I only book 1 beds and have no problem getting what I want. So, those commercial renters aren't doing anything that affects me. Are they gobbling up SSR and OKW rooms, I doubt it? I'm betting that the MAJORITY of owners are not affected at all and that any change made will probably be a detriment to more owners, so the argument of a change being of benefit to the majority of owners might be hard to justify.

My concern is that whenever Disney says "we implement XYZ based on customer feedback" it nearly always makes things worst for the majority of people.

 

[AstroBlasters]

When I read his post, I felt a great disturbance in the Force, as if millions of voices suddenly cried out in terror and were suddenly silenced.

“I recognized your foul stench when I was brought on board.”

 

[xdan0920]

My concern is that whenever Disney says "we implement XYZ based on customer feedback" it nearly always makes things worst for the majority of people

I would normally agree with you, As Disney does have a tendency to pee on us and tell us it’s raining. “We are raising prices bc guests have told us the parks are too crowded” “Say goodbye to splash, based on guest feedback” and so on

 

[HyperspaceMountainPilot]

And then we come back to the problem of defining "commercial renting," is it one owner renting out their points and making reservations upon request of a renter?

I think Disney could easily define commercial renting as renting for more than your cost of dues and annual amount of purchase price. The people routinely reserving the most profitable rentals would be a good place to start cracking down, IMO.

As you know, here on the DIS we don't allow owners to offer existing reservations more than 30 days prior to the check-in date without paying a $125 rental plan for one reservation or $250 plan for a maximum of three existing reservations per year to discourage the practice of spec rentals. The vast majority of our rental board is point rentals based upon requests of renters and resort availability.

Charing people for the right to rent spec rentals isn’t discouraging it, it’s facilitating it and profiting off of it— though I will concede that taking a $100 cut does make it less desirable to spec rent for a short stay. I’m not judging the board (which is a commercial enterprise) or you personally, but I wouldn’t categorize it as trying to help owners combat spec rentals.

But is it really needed at all, since the DVC POS guarantees it?

I haven’t heard anybody discuss this but renting and renting *for profit* are different— is there anything stopping DVC from prohibiting people for renting for more than their cost basis (other than cost of enforcement)?

As I quoted earlier, commercial renting is expressly forbidden by the POS.

I also posted a legal definition of commercial activities and quoted Florida statute granting Disney broad power to determine how DVC points are used.

At recent condo association meetings, Disney said they are ok with occasional renting but again emphasized that commercial renting is disallowed.

IMO, Disney can do pretty much whatever they want as long as it’s “in the best interests of the owners as a whole“.

Agree with all of this. Hard to imagine that very many DVC members would be upset if the rules were changed to stop spec renting (especially targeting the low point rooms).

PSA: All three of us DVC Mods are volunteers. We have no more "skin in this game" than any other DVC Member who posts here.

Wanted to take a moment to thank you and the other DVC mods, as was already noted, I don’t think DISboards trying to profit off commercial rentals is the real problem, it’s up to Disney to stop it or not.

They have 100% heard both from me, multiple times

We walk by DVC kiosks at least once a month. I’m going to be sure to start mentioning that we won’t be buying PVB, VDH or (more) AUL because it’s so stressful to try to book at holiday periods when competing against commercial renters.

I am not a lawyer, but to me the language in 721 that states (which someone noted before)

<snip>

In that same section it talks about a right of first refusal. I do not believe a developer could add that after the contract was executed either as it impinges on my right of selling my contract. If I have signed a contract without a right of first refusal clause there may be nowhere explicitly in FL law that says that I may sell my contract to whomever I want at whatever price I want but unless the law explicitly bars certain types of sales (or allows the developer to) I certainly have that right.

<snip>

Again, not a lawyer, so I would love for one to chime in!

I was going to scroll on by, but since you asked, just want to point out that this is not how the law works in the U.S., more specifically, telling someone to make sure they understand all the rules and restrictions that already exist does not (in any way) stop the rules from being amended in the future so long as they are amended in a way that is consistent with the existing rules.

I continue to think that as Disney has always said commercial renting is not allowed, and they could simply say that they aren’t allowing people to rent for more than the cost of dues and purchase price and that they will start by targeting people who make frequent reservations in profitable room categories where the rooms are not being booked for their own family and friends.

 

[lowlight]

That one is definitely Sith….

I thought it was Slitherin?

I continue to think that as Disney has always said commercial renting is not allowed, and they could simply say that they aren’t allowing people to rent for more than the cost of dues and purchase price and that they will start by targeting people who make frequent reservations in profitable room categories where the rooms are not being booked for their own family and friends.

I do believe they've left it ambiguous all these years on purpose, so you have two tripwires- 20 reservations, or "a pattern of rental activity that appears commercial", separate thresholds that result in the same punishment. Likely so it doesn't create a situation in which someone thinks to themselves, "If I buy 4000 points and rent 19 reservations at 175 points each, I can make $99750 dollars, pay off my $32000 in dues, use the last 675 points myself for a week in a 2BR during holiday season, and use the remaining $67750 to pay for the trip and profit, I mean "buy in expenses". Not that this is an idea that I'm mulling around if anyone wants a business partner or anything. Anyone? Bueller, Bueller?

 

[lowlight]

I would normally agree with you, As Disney does have a tendency to pee on us and tell us it’s raining. “We are raising prices bc guests have told us the parks are too crowded” “Say goodbye to splash, based on guest feedback” and so on

No way Disney is peeing on you for free. That's Pixie Tears, and it's $40 a bottle on Main St. at the Emporium.

 

[AstroBlasters]

I thought it was Slitherin?



I do believe they've left it ambiguous all these years on purpose, so you have two tripwires- 20 reservations, or "a pattern of rental activity that appears commercial", separate thresholds that result in the same punishment. Likely so it doesn't create a situation in which someone thinks to themselves, "If I buy 4000 points and rent 19 reservations at 175 points each, I can make $99750 dollars, pay off my $32000 in dues, use the last 675 points myself for a week in a 2BR during holiday season, and use the remaining $67750 to pay for the trip and profit, I mean "buy in expenses". Not that this is an idea that I'm mulling around if anyone wants a business partner or anything. Anyone? Bueller, Bueller?

. Well done, I got a chuckle.

That was where Umbridge was sorted into… but I was rolling with the Star Wars quote….

 

[AstroBlasters]

I would normally agree with you, As Disney does have a tendency to pee on us and tell us it’s raining. “We are raising prices bc guests have told us the parks are too crowded” “Say goodbye to splash, based on guest feedback” and so on

did you wonder over here from Ft. Wilderness? I kid…. I kid…..

 

[Cfabar1]

And remember they have 5 full resorts (BWV, Vero, Hilton Head, Boulder Ridge, BCV) and much of OKW expiring in 18 years, I doubt they even care about doing anything to limit rentals at those resorts, since once 2042 rolls around, they'll close them, possibly send them through an extended refurbishment, and then resell them as part of the trust, assuming the trust thing doesn't shy potential owners away from the program. And I wouldn't be shocked of they sold HH and Vero completely to a different company, like Marriott to avoid the cost of a refurb.

I suppose for the right price... but I'm not convinced MVC would want to buy these properties... They don't exactly have a shortage of properties in HHI, and VB I'm not sure they want...

If these are sold, I think it will be to some two-big player and they likely shutter entirely within 5 years.

To the overall thread here.... I have no interest in competing with bots and commercial renters for a reservation. I personally find it strange that others are content diluting the value of their membership in that way. I didn't buy DVC to make money, I bought it to use it.

I think DVC sold it to me so they could make money, not so that I could.

So, I suspect our interests will ultimately align and they will shut down the commercial renting, even though we both want it for different reasons.

 

[nalababybear]

I think Disney could easily define commercial renting as renting for more than your cost of dues and annual amount of purchase price. The people routinely reserving the most profitable rentals would be a good place to start cracking down, IMO.

Charing people for the right to rent spec rentals isn’t discouraging it, it’s facilitating it and profiting off of it— though I will concede that taking a $100 cut does make it less desirable to spec rent for a short stay. I’m not judging the board (which is a commercial enterprise) or you personally, but I wouldn’t categorize it as trying to help owners combat spec rentals.

I haven’t heard anybody discuss this but renting and renting *for profit* are different— is there anything stopping DVC from prohibiting people for renting for more than their cost basis (other than cost of enforcement)?

Agree with all of this. Hard to imagine that very many DVC members would be upset if the rules were changed to stop spec renting (especially targeting the low point rooms).

Wanted to take a moment to thank you and the other DVC mods, as was already noted, I don’t think DISboards trying to profit off commercial rentals is the real problem, it’s up to Disney to stop it or not.

We walk by DVC kiosks at least once a month. I’m going to be sure to start mentioning that we won’t be buying PVB, VDH or (more) AUL because it’s so stressful to try to book at holiday periods when competing against commercial renters.

I was going to scroll on by, but since you asked, just want to point out that this is not how the law works in the U.S., more specifically, telling someone to make sure they understand all the rules and restrictions that already exist does not (in any way) stop the rules from being amended in the future so long as they are amended in a way that is consistent with the existing rules.

I continue to think that as Disney has always said commercial renting is not allowed, and they could simply say that they aren’t allowing people to rent for more than the cost of dues and purchase price and that they will start by targeting people who make frequent reservations in profitable room categories where the rooms are not being booked for their own family and friends.

All great points. Disney has allowed for it for quite some time and how much they want to dial it back is yet to be seen.

IMHO, it'll be done in an incremental level to see what impacts the changes will have.

The hard part about drawing a line of where 'profitability' is very murky since buyin points vary, MF vary, and middlemen agencies vary. I don't believe Disney wants to police DVC memberships more than they have -- nor will members want MFs to increase due to more personnel just to police this issue.

The easy first lever is probably already starting: notice to high profile memberships to stop or exit -- otherwise cancellations will occur and they will be on the hook. Disney has done this before with resellers of special event tickets so they have pretty good experience in dealing with the PR side of things.

What Disney will do after that? Will they put more constraints and rules in writing for the entire booking process?

I think reinstituting prior processes like the lottery would happen before new processes come about.

 

[Sandisw]

I think Disney could easily define commercial renting as renting for more than your cost of dues and annual amount of purchase price. The people routinely reserving the most profitable rentals would be a good place to start cracking down, IMO.

Charing people for the right to rent spec rentals isn’t discouraging it, it’s facilitating it and profiting off of it— though I will concede that taking a $100 cut does make it less desirable to spec rent for a short stay. I’m not judging the board (which is a commercial enterprise) or you personally, but I wouldn’t categorize it as trying to help owners combat spec rentals.

I haven’t heard anybody discuss this but renting and renting *for profit* are different— is there anything stopping DVC from prohibiting people for renting for more than their cost basis (other than cost of enforcement)?

Agree with all of this. Hard to imagine that very many DVC members would be upset if the rules were changed to stop spec renting (especially targeting the low point rooms).

Wanted to take a moment to thank you and the other DVC mods, as was already noted, I don’t think DISboards trying to profit off commercial rentals is the real problem, it’s up to Disney to stop it or not.

We walk by DVC kiosks at least once a month. I’m going to be sure to start mentioning that we won’t be buying PVB, VDH or (more) AUL because it’s so stressful to try to book at holiday periods when competing against commercial renters.

I was going to scroll on by, but since you asked, just want to point out that this is not how the law works in the U.S., more specifically, telling someone to make sure they understand all the rules and restrictions that already exist does not (in any way) stop the rules from being amended in the future so long as they are amended in a way that is consistent with the existing rules.

I continue to think that as Disney has always said commercial renting is not allowed, and they could simply say that they aren’t allowing people to rent for more than the cost of dues and purchase price and that they will start by targeting people who make frequent reservations in profitable room categories where the rooms are not being booked for their own family and friends.

From the way I understand it is that the threshold woild be whatever DVC decides makes sense to be considered someone using the membership for a business.

To me, that translates into that the main reason for owning is to rent to others and not for vacations.

Thst is why I don’t think the type of rental matters. I also don’t think owners who rent to offset dues to get “free” vacations counts either.

For me, it’s someone who has a lot of points…like 1500 or more…and routinely is renting all of them to others, year after year.

Now, DVC can certainly think otherwise and act the way they want.

There is a clause that says the terms of the rental are up to the owner…which could mean they can’t dictate the rate..but even if they could, I don’t think they are going to do that because that requires a lot of oversight. And it would still require owners to report it and is DVC going to search for accuracy?

While I know that DVC sometimes pushes the limits in how they interpret things and have had to be called on them, I don’t think they go in wanting to make things complicated or difficult.

And, I think this will be the same. They POS documents pre RIV mention about having reasonable rules around commercial and I think they will use that.

That is why I will be shocked to see them define spec renting as a shift to a commercial membership if it’s not accompanied by a pattern of renting that hits a certain threshold as well.

It’s also why I don’t see them saying that using a third party to rent is automatically commercial membership without that pattern.

I also doubt that the vast majority of owners want to have a set of rules that make it difficult to use points for family and friends when renting isn’t involved.

 

[Sandisw]

All great points. Disney has allowed for it for quite some time and how much they want to dial it back is yet to be seen.

IMHO, it'll be done in an incremental level to see what impacts the changes will have.

The hard part about drawing a line of where 'profitability' is very murky since buyin points vary, MF vary, and middlemen agencies vary. I don't believe Disney wants to police DVC memberships more than they have -- nor will members want MFs to increase due to more personnel just to police this issue.

The easy first lever is probably already starting: notice to high profile memberships to stop or exit -- otherwise cancellations will occur and they will be on the hook. Disney has done this before with resellers of special event tickets so they have pretty good experience in dealing with the PR side of things.

What Disney will do after that? Will they put more constraints and rules in writing for the entire booking process?

I think reinstituting prior processes like the lottery would happen before new processes come about.

To add, DVC gets a straight 12% fee to manage the program. I don’t believe they can take more…which means, they aren’t going to spend a lot of extra money making all these really hard rules that will be hard to enforce, when it eats into their profit.

They can easily go after those really large point owners who they have the data on who clearly rent a lot…and who have most likely gotten around the old 20 reservations rules per membership by creating a lot of LLCs…and put an end to that.

My guess is that will be enough.

ETA: The other thing we might see is DVC cracking down on transfer for money. That is expressly prohibited and I could very well see them requiring owners on the call to state that no money has exchanged hands…or, submit it in writing.

That could definitely change things moving forward.

 

[wdw_explorer]

I was going to scroll on by, but since you asked, just want to point out that this is not how the law works in the U.S., more specifically, telling someone to make sure they understand all the rules and restrictions that already exist does not (in any way) stop the rules from being amended in the future so long as they are amended in a way that is consistent with the existing rules.

I continue to think that as Disney has always said commercial renting is not allowed, and they could simply say that they aren’t allowing people to rent for more than the cost of dues and purchase price and that they will start by targeting people who make frequent reservations in profitable room categories where the rooms are not being booked for their own family and friends.

Yes, Disney may change the rules, but any limitations they apply must be contained under the umbrella of commercial renting, which is what we are explicitly prohibited from doing. They could put limitations on total income, for example, as a measure of profit. I'm not arguing they can't.

My point is they could not extend that to other limitations such as only allowing renting to other timeshare owners or not allowing renting in the summer, or the renting studios or the new Poly Tower, for example. Clearly these are not definitions of commercial renting.

The limitations must be contained in the contract (which commercial renting is) and Disney does not have the power to limit beyond that scope. They are bound by the contract just like us and are not omnipotent. They cannot do whatever they want, but they do have wide latitude as commercial renting is an ill-defined term.

This all started with do timeshare owners have a right to rent in Florida. My point was that they do except for the limitations contained in their contract. Please see the lawyers analysis for reference.

 

[nalababybear]

To add, DVC gets a straight 12% fee to manage the program. I don’t believe they can take more…which means, they aren’t going to spend a lot of extra money making all these really hard rules that will be hard to enforce, when it eats into their profit.

They can easily go after those really large point owners who they have the data on who clearly rent a lot…and who have most likely gotten around the old 20 reservations rules per membership by creating a lot of LLCs…and put an end to that.

My guess is that will be enough.

ETA: The other thing we might see is DVC cracking down on transfer for money. That is expressly prohibited and I could very well see them requiring owners on the call to state that no money has exchanged hands…or, submit it in writing.

That could definitely change things moving forward.

Didn't realize the management fee is a fixed amount -- yeah, they really aren't going to put more personnel on micro-policing if that's the case.

Only transfers we ever done is between our own memberships. Never felt comfortable on transfers in or out with third party.

 

[zavandor]

I haven’t heard anybody discuss this but renting and renting *for profit* are different— is there anything stopping DVC from prohibiting people for renting for more than their cost basis (other than cost of enforcement)?

I can see two problems with this.

When something is "rented", it is always for more than expenses. If the contract allows to rent then there is expectation that it's for more than just MF.

Second is past precedent: DVC has always enforced the contract with the interpretation that only having a commercial enterprise is not allowed, not just a few rentals to offset dues.
I would not define a member who rents a few points for more than MF a commercial enterprise.

 

[theMoreDisneytheBetter]

They can add up really fast; especially for local folk who constantly add/subtract, stalk, combine, do split stays.

I highly doubt Disney would want to sweep all these owners into whatever dragnet they are implementing.

I wouldn’t be that worried if a member has 20 reservations under their own name. It’s 20 for others that is currently more problematic. And even there, let’s say Disney triggers a review because a person frequently gifts stays to their kids. It’s pretty easy to prove a familial relationship (eg repeated use by the same people, in friends and family, etc).

 

[Cyberc1978]

If DVC cracks down on big point owners, is the expectation that they just roll over or are they gonna try and fight it?

I mean some of the LLC’s are making a lot of money and I could see them try to fighting it. Ofc it depends on how the crack down is being enforced but still if they make $500k a year they don’t want that to go away anytime soon.

 

[DVCanadian]

If DVC cracks down on big point owners, is the expectation that they just roll over or are they gonna try and fight it?

I mean some of the LLC’s are making a lot of money and I could see them try to fighting it. Ofc it depends on how the crack down is being enforced but still if they make $500k a year they don’t want that to go away anytime soon.

Looked to me like LLCs have the tightest rules and should be the easiest to monitor.

From the long rules post up thread: “…and use by corporations or other business entities is strictly limited to recreational use by their directors, officers, principals, or employees,”

Very restricted guest list for an LLC. LLCs could be asked for a list of directors, officer etc. as that appears to be the only allowed people on the reservation.

 

[Nabas]

If DVC cracks down on big point owners, is the expectation that they just roll over or are they gonna try and fight it?

I mean some of the LLC’s are making a lot of money and I could see them try to fighting it. Ofc it depends on how the crack down is being enforced but still if they make $500k a year they don’t want that to go away anytime soon.

Fighting Disney will be an uphill battle.

Disney proposes enforces the existing POS. Having a rule limiting commercial renting is not an unusual restriction.

Florida Statute 721.13(12)(a) delegates to Disney (and any timeshare “managing entity”) the authority to manage reservations as long as they do so “in the best interests of the owners as a whole”. According to Disney, there are only a few commercial renters. These few are affecting many other DVC members. Enforcing the POS rule on commercial renting is in the best interests of owners as a whole.

Many timeshares already successfully enforce renting restrictions and, as far as I know, no one has successfully won against them in court.

IMO, anyone fighting Disney on this is throwing away money.