DVC plans to target commercial renters

[Tatebeck]

Serious question. Could someone explain to me what the problem is with commercial renting? My one concern is how they would define commercial renting? Could they define a place like dvc rental as commercial renting? If it wasn’t for renting points I would have never became a dvc member because I would have never seen the value in it.

Commercial renting means members buying points for the sole purpose of renting for income. This means that they are primarily trying to milk every bit of money out of the points they have, rather than looking to use them for actual vacations. This leads to excessive walking of reservations, and increased strain on certain room types and trip dates that they think they can rent for more money. Low points season, popular times, and booking studios in general becomes more difficult and is not good for membership.

Most people think that they will not outlaw third party websites that match members with renters as a service, but that they may only get in trouble if that company actually owns contracts that they are using solely to provide the rental reservations as part of that service. So it would depend on which site and if they are renting their own points or matching other members with renters.

 

[Cyberc1978]

If I have 20 or more reservations Per year where the primary guest is not me, how would DVC decide if that is commercial renting or not?

As others has noted, it could be for friends and family - but it could also be renting - or both.

According to the POS which was changed back in December of 2007 to allow up to 20 rental/reservations per 12 months how can DVC change that and claim some are in breach? I know DVC set the rules, my point is if a member/company is doing what they have always done, within the current rules, and then all of a sudden 15 years later they are told they are in breach, would that fly in court? The member would argue that they have always been in good faith and now DVC changed the rules.

I don’t know U.S law, but imo if you have done something for years within the rules, and in good faith, additionally you maybe bought your membership maybe not for the sole purpose of renting but also for that because the rules gave you that option up to 20 reservations then everything you have done were in good faith. If DVC then changes the rules only to strike down on that, I would argue DVC are in bad faith.

Fair enough if the only activity in your membership is reservations in other people’s names and not your own - that brings me back to how would DVC know if my reservations is rentals or for friends and family?

 

[DL1WDW2]

The only thing Disney will do is send a letter of warning .
It will also include a description of rules .

 

[patm95]

The only thing I’d be worried about with the commercial renting is how they define it. For instance one reason we bought in was that if we ever wanted to skip a few years of Disney, we could rent out our points to fund a different vacation. Or I’ve even toyed in my mind of buying more points than we needed to rent out points to fund the annual dues of all the contracts.

 

[BeachClub2014]

Nothing is easy. I just ask that DVC do reasonable for both and not wreck the system that exists today and kill their goose and mass exodus of DVC owners.

I agree with you that I'd hate to see the cure worse than the underlying ailment. DVC should be tuned into member satisfaction, but they don't have to fear a mass exodus of owners. We are captive to the system. If an owner wants to exit DVC, they must find a new owner to sell/take the contract.

One owner is out, and a new owner is in.

 

[Leight19]

What most believe they cannot do is move points between UNITS, because that would change the percentage of the ownership interests that we have been sold. But they can change them between room types and seasons, as long as the total points in each unit remains the same.

With how few Value rooms there are, I believe it would be doable, as they are likely only in 1 or 2 units and it would only require a very small change in a different view type(s) to make up for changing ALL of the value rooms

My understanding is the units are defined as groupings of room. To be able to change points between value and standard they would have to have scenario where the total ratio of value to standard rooms are identical between every unit type in which they’re present such that changing the points from one to other doesn’t change the total number of points of any unit which is what we actually buy a deeded portion of. I could be wrong on this but I would view the small number of rooms as a liability for this change and would imagine it’s much less likely to be the case with so few rooms as I doubt the value rooms are equally represented across all units. This is definitely true when you consider kidani.

Further I quickly checked the points vs room count for value vs standard in studio as example. From what I found there are 18 value, 48 jambo standard, and 60 kidani standard. This translates to 6x as many standard rooms; therefore a decrease in 1 point of standard would need to be offset by increase in value of 6 points.

Doing my best guess at how this could look to rebalance the rooms and picking December season as example you could increase value from 8 to 11pts per week night in order to decrease standard from 13 to 12.5. Maybe that balances demand but does it really make our contracts better? Put another way, you increase cost of value rooms by 38% to decrease the cost of standards by 4%.

 

[Sandisw]

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.

The contract and FL timeshare law says the rules for all home resort owners has to be the same.

They simply can not give any home resort owners different booking rules.

They might be able to lock out an owner from booking or suspend their membership to allow no bookings for violation.

But violating the FCFS rule of the contract would not fly.

 

[Sandisw]

If I have 20 or more reservations Per year where the primary guest is not me, how would DVC decide if that is commercial renting or not?

As others has noted, it could be for friends and family - but it could also be renting - or both.

According to the POS which was changed back in December of 2007 to allow up to 20 rental/reservations per 12 months how can DVC change that and claim some are in breach? I know DVC set the rules, my point is if a member/company is doing what they have always done, within the current rules, and then all of a sudden 15 years later they are told they are in breach, would that fly in court? The member would argue that they have always been in good faith and now DVC changed the rules.

I don’t know U.S law, but imo if you have done something for years within the rules, and in good faith, additionally you maybe bought your membership maybe not for the sole purpose of renting but also for that because the rules gave you that option up to 20 reservations then everything you have done were in good faith. If DVC then changes the rules only to strike down on that, I would argue DVC are in bad faith.

Fair enough if the only activity in your membership is reservations in other people’s names and not your own - that brings me back to how would DVC know if my reservations is rentals or for friends and family?

Just to clarify, the rule about 20 was it triggered a review…any reservations above 20 would be canceled if you could not prove the first 20 were not rentals.

If you could not, then only the 20 remain…that language though is no longer in any of the documents…it has been removed so it may or may not still be the threshold.

DVC can certainly change the rules and begin enforcement immediately. They could, of course, give owners a grace period or not.

Just from comments here on the DIS, I think people want a much more stricter definition of what it means to be a pattern of rental activity that crosses the line.

As I shared, while I once thought they would leave the average owners alone, and interpreted the statements at the meetings that most situations for owners would be okay, now I am not so sure.

They very well could make it strict and that renting could be as restrictive as no more than two rentals per UY, and that all rental agreements must be submitted to DVC

If your guests are family or friends not traveling with you, who you are not charging, you submit something to DVC signed by them indicating it or the guest is asked to sign it at check in…IIRC, some of the older POS language includes something to that effect.

 

[Genie+]

Maybe I’m wrong but feel my contract never guaranteed taking a 3 month head start running jump at a home priority reservation or the ability to rent out 25% or 75% of my points for year and years or even decades. My expectations are for personal use under a system that favors personal use over all else. Even if things were possible when we decided to buy, we tried not to rely on anything outside what seemed to be in spirit of the contract. Yes, rentals are allowed but the right to for-profit/commercial use is not. Yes, walking is currently possible but all I can count on is having a home priority window.

 

[xdan0920]

Serious question. Could someone explain to me what the problem is with commercial renting? My one concern is how they would define commercial renting? Could they define a place like dvc rental as commercial renting? If it wasn’t for renting points I would have never became a dvc member because I would have never seen the value in it.

I hope this becomes the definition. I am not hopeful though.

 

[tom1944]

When I first made my purchase and found out you could rent 20 times over a 12-month period it led me to believe they say no commercial renting (wink wink) but you should still purchase huge number of points.


How many of you know an owner that comes close to 20 reservations over 12 months that they are not included? And does that frequently?

 

[McCrae]

DVC rents out points on a commercial basis, how will they be able to justify, morally and legally what they do if they try and stop companies doing what they do?

 

[tx911]

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.

 

[Cyberc1978]

Just to clarify, the rule about 20 was it triggered a review…any reservations above 20 would be canceled if you could not prove the first 20 were not rentals.

If you could not, then only the 20 remain…that language though is no longer in any of the documents…it has been removed so it may or may not still be the threshold.

DVC can certainly change the rules and begin enforcement immediately. They could, of course, give owners a grace period or not.

Just from comments here on the DIS, I think people want a much more stricter definition of what it means to be a pattern of rental activity that crosses the line.

As I shared, while I once thought they would leave the average owners alone, and interpreted the statements at the meetings that most situations for owners would be okay, now I am not so sure.

They very well could make it strict and that renting could be as restrictive as no more than two rentals per UY, and that all rental agreements must be submitted to DVC

If your guests are family or friends not traveling with you, who you are not charging, you submit something to DVC signed by them indicating it or the guest is asked to sign it at check in…IIRC, some of the older POS language includes something to that effect.

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.

 

[Chuck S]

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.

My problem with that limitation would be how is it enforced. Suppose medical issues make it impossible for the deeded owner to personally visit WDW for a few years. Would that owner be able to use those points for friends, with the owner not being on the reservation, with out it being considered commercial? And how would DIsney even be able to ask the owner, given HIPPA laws, the owner could simply refuse, and not elaborate on a medical condition.Would being able to say, sorry, it's for medical reasons suffice if DVC sees the owner hasn't personally been a guest for 2 or 3 years? Certainly, this could lead to people complaining about unequal enforcement, no matter the circumstances.

 

[Cyberc1978]

DVC rents out points on a commercial basis, how will they be able to justify, morally and legally what they do if they try and stop companies doing what they do?

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.

 

[tx911]

My problem with that limitation would be how is it enforced. Suppose medical issues make it impossible for the deeded owner to personally visit WDW for a few years. Would that owner be able to use those points for friends, with the owner not being on the reservation, with out it being considered commercial? And how would DIsney even be able to ask the owner, given HIPPA laws, the owner could simply refuse, and not elaborate on a medical condition.Would being able to say, sorry, it's for medical reasons suffice if DVC sees the owner hasn't personally been a guest for 2 or 3 years? Carainly, this could lead to people complaining about unequal enforcement, no matter the circumstances.

I guess to that I would say only buy the number of points that you can actually use.

 

[Genie+]

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?

 

[Brian Noble]

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.

The governing documents explicitly carve out DVD as an exception to the commercial use restrictions.

 

[Cyberc1978]

The governing documents explicitly carve out DVD as an exception to the commercial use restrictions.

Just because something is written into a document doesn’t make it correct nor wrong for that matter.

From what was stated in the old discussion, rules has to apply for all owners including DVC.

IIRC you were part of that thread