DVC plans to target commercial renters

[Genie+]

I hope not. As an example, I had two villas booked for later this month (MLK weekend), one for my wife and daughter and I and another for a friend (with no payment). As it turns out, our friend was unable to travel due to a business trip. The points are February use year and we are well past the banking deadline, so I listed the reservation for our friend with DVC Rental Store at $15 per point, and someone purchased it. While some may consider this an "11 month spec rental", I hope that nobody would consider this to be a "pattern of commercial activity" that should not be permitted.

I think this is why most agree that cutting out spec renting 100% is not a good solution because the cost for personal use owners is too high (the legal aspect is in question as well). Flexibility is a big part of DVC’s value.

You did something once. For sure that is not a pattern and by itself can easily stay within personal use. What if you needed to do it in the hardest to book rooms/dates 3 or 5 times every year?

 

[Tatebeck]

I am really having a hard time with saying a commercial purpose and the intent of that clause in the contract was meant for anything other than that DVC is not meant to be a commericial enterprise and the sole purpsoe is vacations...which is why I think you see it repeated over and over and over.

I know people have a different take, but when I bought and read through all my contracts, and the language used, I really do believe that it is pretty easy and common for the average DVC owner to have come to that same conclusion.

So, going back to your question. Spec renting is nothing more than a reservation that has been made first and then finding a renter.

Some spec rentals are chosen because they have a high probility of earning a good profit, but other spec rentals are chosen becaue an owner has points that expire and they grab what they can, or its a reservation that started out as their own but now something happened and they need to cancel and are within 31 days or even or they wa nt to make the process simple and just find something and rent it.

That is why IMO that spec renting is not something that DVC is going to try and define. In o e way, it goes against the whole FCFS notion because the owner is booking a room they intend to let someone use....and renters count.....

Some of the language of the contract says things like you can't rent until you make a reservation, an owner does not need DVCs permission to rent once a reservation is in an owners name, and even that terms and conditions are up to the owner. Does banning spec renting go against any of that? Could your average owner say it does and that spec renting, on its own, doesn't make an owners reasons for owning DVC all of a sudden not for vacation purposes.

I will always come back to evaluating any limitations for what we book, how we book it and where we find a renters against the intent of the commerical purposes clause as I understand it....and I just don't think any of this fits into that in a reasonable way.

Could DVC do it and say its allowed and force owners to live with it or fit it? Absolutely....but I personally don't think they will belcause they do seem to want renting for commercial purposes to be stopped while still allowing owners the flexiblity to rent points when they need to and I don't see that stopping the adverstising of confirmed rentals changes an owners purpose for owner DVC....and if it doesn't, then it should not be prohibited.

Oh, and how to they deal with a FW owner? Banning spec renting would ban them from renting what they bought...sure, it can be canceled, and DVC could say that they must, but again, I would think that they at least have to make that clear to FW owners that they can only use it for themselves or guests, and not renters?

If DVC plans to make changes, all of these are going to be have to be considered by DVC and if they are like most companies, they run there it all and then decide...once they do, they can find a way to spin it. I just don't see DVC investing all this time and money to make it complicated when they don't need to.

They may not ever differentiate between spec rentals made up front and rentals made at the request of the renter, but they really don't have to.

They could decide at any time that consistent, multiple instances of renting rooms known to bring in higher $ per point could be a possible instance of "a pattern of commercial activity"

IE someone who owns BWV and AKV but has rentals every year for specifically BWV Standard and AKV Value studios or during certain times of the year.

You did something once. For sure that is not a pattern and by itself can easily stay within personal use. What if you needed to do it in the hardest to book rooms/dates 3 or 5 times every year?

Exactly this. They already have a way to stop members continuously renting certain rooms if they feel like it

 

[muppets3d]

There are so many people who have to adjust dates later on that this would be terrible. There are plenty of owners who book a trip and then later decide to adjust it by a day because the airfare is better, or they book a few extra days because at 11 months, they are not exactly sure which days they can do....sometimes it is waiting for approval for vacation time...

I can go on and on with all different situations. The good news is that I do not see DVC ever doing this because they know that being flexible is a huge benefit to DVC.

There are a lot of people who have plans change inside a month too, and DVC has no problem penalizing them. When the rules of engagement change people change their behaviors to match.

 

[Sandisw]

It would take one competent programmer just a few days to be able to generate a report from a list of spec rentals from a website giving the owners names for the reservations with the same resorts and dates. And if Megaowner LLC turns out to own the points for 40 or 50 of those reservations, then it's fairly simple to focus on that owner, watch for the reservations disappearing from the website as they are rented, and monitoring for the corresponding lead guest name changes that are requested. At which point DVC absolutely has the points owner dead to rights in terms of engaging in a pattern of commercial activity. The problem with simply accusing everyone who has a large number of reservations of commercial activity is that they can respond that all those reservations are for family or friends, and it is very difficult indeed for DVC to prove otherwise.

Confirmed reservations don’t include owner’s names though when advertised do they?

If so, then it sounds like an easy computer solution…thought I still think they have the ability to flag reservations using a simple threshold and the spec renting aspect isn’t even relevant

 

[DonMacGregor]

I'm not familiar with any "advertising prohibition" in the POS. What is the exact wording of this provision?

This in the Riviera POS:

12.1.3 The Association, through the Board or the Management Company, shall be the sole determiner of any use or activity that does not constitute personal use or constitutes commercial use. For example, the Board or Management Company may conclude that an Owner is engaged in a commercial enterprise as a result of a pattern of rental activity of reserved Vacation Homes or frequent occupancy by others of reserved Vacation Homes, other than an Owner or the Owner's family, use of regular rental or resale advertising, maintaining a rental or resale website, or frequent purchase and resale of Ownership Interests whether in the name of an Owner or those related to such Owner.

"Use of regular rental or resale advertising" is listed as one of the criteria by which "the Board or Management Company may conclude that an Owner is engaged in a commercial enterprise". It's part of a comma-separated list:

• a pattern of rental activity of reserved Vacation Homes or frequent occupancy by others of reserved Vacation Homes, other than an Owner or the Owner's family
• use of regular rental or resale advertising
• maintaining a rental or resale website
• frequent purchase and resale of Ownership Interests whether in the name of an Owner or those related to such Owner

"Prohibition" is probably a poor choice of words, but the POS clearly defines the use of advertising as a potential criterion for the determination of commercial activity. It has nothing to do with holding oneself out to be DVC or posting advertising on Disney property. It very clearly states "use of regular rental or resale advertising".

It goes on to add that maintaining a rental or resale website may also constitute commercial use as well (but that's not what I was referencing, it's just some icing on the cake).

 

[muppets3d]

This in the Riviera POS:

"Use of regular rental or resale advertising" is listed as one of the criteria by which "the Board or Management Company may conclude that an Owner is engaged in a commercial enterprise". It's part of a comma-separated list:

• a pattern of rental activity of reserved Vacation Homes or frequent occupancy by others of reserved Vacation Homes, other than an Owner or the Owner's family
• use of regular rental or resale advertising
• maintaining a rental or resale website
• frequent purchase and resale of Ownership Interests whether in the name of an Owner or those related to such Owner

"Prohibition" is probably a poor choice of words, but the POS clearly defines the use of advertising as a potential criterion for the determination of commercial activity. It has nothing to do with holding oneself out to be DVC or posting advertising on Disney property. It very clearly states "use of regular rental or resale advertising".

It goes on to add that maintaining a rental or resale website may also constitute commercial use as well (but that's not what I was referencing, it's just some icing on the cake).

That would seem to mean that lots of folks on this board who refuse to believe they are commercial renters - are in fact, commercial renters.

 

[DonMacGregor]

That would seem to mean that lots of folks on this board who refuse to believe they are commercial renters - are in fact, commercial renters.

We can now expect 20 pages of semantics defining the use of the word "regular", LOL.

I mean, I don't think simply listing on a website occasionally is a basis for determination of commercial use, but it's another arrow in the quiver. Plus, that clause uses the term "commercial use", not "commercial activity", which seems to ease their previous "pattern" threshold (even one reservation could qualify as using the contract for "commercial use").

 

[Sandisw]

They may not ever differentiate between spec rentals made up front and rentals made at the request of the renter, but they really don't have to.

They could decide at any time that consistent, multiple instances of renting rooms known to bring in higher $ per point could be a possible instance of "a pattern of commercial activity"

IE someone who owns BWV and AKV but has rentals every year for specifically BWV Standard and AKV Value studios or during certain times of the year.




Exactly this. They already have a way to stop members continuously renting certain rooms if they feel like it

That is the position that I have always had and have tried to make.

It is not the specific rental or way you do it that should matter, but a pattern of rentals that shifts one to being considered using iyoir membership for a commercial purpose.

DVC already has the ability define that pattern as broad or as narrow as they see fit.

 

[GoingSince1990]

This in the Riviera POS:

"Use of regular rental or resale advertising" is listed as one of the criteria by which "the Board or Management Company may conclude that an Owner is engaged in a commercial enterprise". It's part of a comma-separated list:

• a pattern of rental activity of reserved Vacation Homes or frequent occupancy by others of reserved Vacation Homes, other than an Owner or the Owner's family
• use of regular rental or resale advertising
• maintaining a rental or resale website
• frequent purchase and resale of Ownership Interests whether in the name of an Owner or those related to such Owner

"Prohibition" is probably a poor choice of words, but the POS clearly defines the use of advertising as a potential criterion for the determination of commercial activity. It has nothing to do with holding oneself out to be DVC or posting advertising on Disney property. It very clearly states "use of regular rental or resale advertising".

It goes on to add that maintaining a rental or resale website may also constitute commercial use as well (but that's not what I was referencing, it's just some icing on the cake).

Thanks. That language looks tailor-made to go after the huge owners listing pages of spec reservations (which is undeniably "regular advertising"), as opposed to those listing the occasional reservation on somewhere like DVC Rental Store. And the safest thing for those wanting to monetize excess points would be to use their points for rental requests as opposed to renting out confirmed reservations, as this involves no advertising at all.

 

[JackosinDIS]

That would seem to mean that lots of folks on this board who refuse to believe they are commercial renters - are in fact, commercial renters.

Nope.

We can now expect 20 pages of semantics defining the use of the word "regular"...

We should point out that this wording is only included in RIV and later POS documents.

 

[lowlight]

We can now expect 20 pages of semantics defining the use of the word "regular"...

Please, I don't have it in me anymore. The last struggle session nearly did me in.

 

[xdan0920]

I’m glad you were able to make it work. I still haven’t gotten mine, piecing it together. I never had a chance. Hopefully you can shore it up tomorrow, it shouldn’t be this hard but that’s the DVC product as it stands.

We don’t want to lose this kind of flexibility. It’s integral to membership.

I mean folks managed before the sites existed and before people caught on to the benefits of confirmed reservations, so I don’t see how the third party sites are integral to renting out your points, or are anyone’s only option (and certainly not guaranteed by any DVC contractual language), but I was really asking if I’m the only one who sees listing a confirmed reservation on a third party site as violation of the advertising prohibition.

I see it the same way.

I hope not. As an example, I had two villas booked for later this month (MLK weekend), one for my wife and daughter and I and another for a friend (with no payment). As it turns out, our friend was unable to travel due to a business trip. The points are February use year and we are well past the banking deadline, so I listed the reservation for our friend with DVC Rental Store at $15 per point, and someone purchased it. While some may consider this an "11 month spec rental", I hope that nobody would consider this to be a "pattern of commercial activity" that should not be permitted.

Depends, if you do it 3 of the next 4 years. I’d flag your membership.

 

[DVCRad]

This is the first year we have rented out points. We rented out a few hundred points to do a cruise swap with DVC Rental Store. Next year we hope to use all of our points. I hope that renting out a few handful of reservations like we did, wouldn't be too much for DVC to penalize us. I guess time will tell.

 

[DonMacGregor]

We should point out that this wording is only included in RIV and later POS documents.

Never said it was anything other than that. I was asked to provide it and I did. I also made a point of conceding that "prohibition" was probably a poor choice of words. The fact remains that there is language in the Riviera and VDH POS that very clearly identifies the use of advertising as a potential criterion for identifying commercial use.

 

[Sandisw]

This in the Riviera POS:

"Use of regular rental or resale advertising" is listed as one of the criteria by which "the Board or Management Company may conclude that an Owner is engaged in a commercial enterprise". It's part of a comma-separated list:

• a pattern of rental activity of reserved Vacation Homes or frequent occupancy by others of reserved Vacation Homes, other than an Owner or the Owner's family
• use of regular rental or resale advertising
• maintaining a rental or resale website
• frequent purchase and resale of Ownership Interests whether in the name of an Owner or those related to such Owner

"Prohibition" is probably a poor choice of words, but the POS clearly defines the use of advertising as a potential criterion for the determination of commercial activity. It has nothing to do with holding oneself out to be DVC or posting advertising on Disney property. It very clearly states "use of regular rental or resale advertising".

It goes on to add that maintaining a rental or resale website may also constitute commercial use as well (but that's not what I was referencing, it's just some icing on the cake).

It has been mentioned many times that the RiV and beyond resorts have different language and could be held to a different standard…

I didn’t realize this is what you were referring to when I first responded.

Based on this, RiV owners are on notice as to what could be used and its DVC descretion to choose what that world regular use…advertising.. means.

Since that word reasonable was also removed, I think that was a significant change to give them more power to enforce.

However, this is not part of the pre RIV resorts and they have never amended the other Resorts POS documents to add this language…those are amended every year with updated budgets so it’s an easy thing to do…IMO, applying it to other resorts might be difficult.

I will go farther to say that because they included it here and not in the pre RIV resorts they may recognize they don’t have the authority to actually change things for those resorts as easily as some think they can.

I mean why bother putting all this in to RiV if the discretion they currently have includes all of this?

And why wouldn’t they have amended the other resorts POS to add these additional clarifiers if it within their right to do so?


Some legal analysis I have seen, especially by drusba suggests it can’t apply this to those other resorts and they can’t amend the POS to add this language to them.

So, in response your initial post, I think those who rent RIv points could be deemed to be a commerical enterprise based on this language related to advertising.

But I do not believe it would be easy to use it for other owners at other resorts.

 

[Sykes]

We should point out that this wording is only included in RIV and later POS documents.

It's worth noting that, at least as far as that restriction is concerned, the RIV POS and the earlier POSes that I've reviewed (specifically SSR) are materially the same--they just illustrate examples of the restriction differently.

Both restrict usage to personal use, both explicitly disallow commercial use, and both give the Board broad discretion about how to define commercial and personal use. The only real difference is how they illustrate examples of how Disney might determine that something is commercial (or otherwise non-personal) use. The RIV POS more clearly shows how Disney intends to enforce the restrictions, but IMO Disney has the same tools available at both SSR and RIV.

 

[DonMacGregor]

Based on this, RiV owners are on notice as to what could be used and its DVC descretion to choose what that world regular means.

As I was saying...

As to all that other stuff, I never made any suggestion or assertion that the advertising issue related to ANY resort specifically or all of them in general. I simply asked a question regarding what thoughts others have on the advertising issue, regardless of which or how many resorts it might apply to (but it applies to RIV and VDH at a minimum).

 

[JackosinDIS]

It's worth noting that, at least as far as that restriction is concerned, the RIV POS and the earlier POSes that I've reviewed (specifically SSR) are materially the same--they just illustrate examples of the restriction differently.

Both restrict usage to personal use, both explicitly disallow commercial use, and both give the Board broad discretion about how to define commercial and personal use. The only real difference is how they illustrate examples of how Disney might determine that something is commercial (or otherwise non-personal) use. The RIV POS more clearly shows how Disney intends to enforce the restrictions, but IMO Disney has the same tools available at both SSR and RIV.

There is one more important difference. Pre-RIV states that DVC must act reasonably in determining whether use is commercial.

RIV onwards give DVC absolute discretion to decide one way or the other.

Otherwise, totally agree with you.

 

[Genie+]

That is the position that I have always had and have tried to make.

It is not the specific rental or way you do it that should matter, but a pattern of rentals that shifts one to being considered using iyoir membership for a commercial purpose.

DVC already has the ability define that pattern as broad or as narrow as they see fit.

Those specifics may not be enough individually but maybe those specifics could be used for what DVC sees as contributing to a pattern?

 

[Sykes]

There is one more important difference. Pre-RIV states that DVC must act reasonably in determining whether use is commercial.

RIV onwards give DVC absolute discretion to decide one way or the other.

Otherwise, totally agree with you.

heh, I almost called that out. I think that's fair but I didn't mention it because I think that enough other standards (Florida statutes, fiduciary duty, norms, etc.) probably require the Association to act in a reasonable manner here anyway so I think that the "reasonable" language was probably superfluous.