DVC plans to target commercial renters

[eticketplease]

So is Disney going to set an example and stop its own commercial renting of DVC points?

 

[AstroBlasters]

And that is fine and an honest question, worthy of being asked and answered (although I think a few have attempted to answer it in good faith already).

Conversely, some of the hypotheticals that are being tossed around are at best, reductio ad absurdum arguments a sixth grade debate team would laugh at.

I mean, I very rarely rent any points out, but now I’m wondering what will happen if I get abducted by aliens and disappear for 20 years. Can my family rent out my points? Who will pay my dues? I mean sure, I’ll be trapped on a spaceship somewhere on the other side of a black hole, but the grands will want those points someday so there’s no way we’re selling them.

I want to be very clear, do you believe that it is absurd to assume that a family who buys DVC now will send their kids to college at some point and may need to cut back on their travel budget or raise extra cash to help pay for it?

 

[MerlinandtheMouse]

I want to be very clear, do you believe that it is absurd to assume that a family who buys DVC now will send their kids to college at some point and may need to cut back on their travel budget or raise extra cash to help pay for it?

You said in an earlier post that if you don’t like the rules set out, tough luck, you should sell. Well this applies here too. If DVD puts in place stricter rules against renting (or merely enforce something they’ve been neglecting for a long while), then they are prioritizing the original intent of the Disney Vacation Club, which is for personal use hotel rooms with the occasional necessary rental. And yes, than that means you can’t spend years renting out your all or most of your points until a future date when hence forth you can reuse them for personal use.

If you find that you are in a position where you need to cut back on your travel budget for more than a couple years, then you sell the excess and keep what you reasonably see yourself using for those interim years. Selling those extra contracts should free up a good chunk of money and that, plus the lack of dues, will all go a lot further with helping pay for your kids college tuitions than the negligible money you said you’d make after renting post fees and taxes.

And since we’re all using hypotheticals, you might find that after those 8-10 yrs of renting while your kids are in college that you’re all Disney’d out and sell everything and so in the end you only kept your points as a commercial rental enterprise, even if unintentionally. So if and when you decide you need more points again, you buy more then.

The right to rent, though allowed in our contracts, should not supersede the original and primary intent of DVC. Renting is a secondary and, more specifically, limited benefit. It should and will remain as part of our contracts but DVC should properly define and enforce what’s written.

 

[AstroBlasters]

You said in an earlier post that if you don’t like the rules set out, tough luck, you should sell. Well this applies here too. If DVD puts in place stricter rules against renting (or merely enforce something they’ve been neglecting for a long while), then they are prioritizing the original intent of the Disney Vacation Club, which is for personal use hotel rooms with the occasional necessary rental. And yes, than that means you can’t spend years renting out your all or most of your points until a future date when hence forth you can reuse them for personal use.

If you find that you are in a position where you need to cut back on your travel budget for more than a couple years, then you sell the excess and keep what you reasonably see yourself using for those interim years. Selling those extra contracts should free up a good chunk of money and that, plus the lack of dues, will all go a lot further with helping pay for your kids college tuitions than the negligible money you said you’d make after renting post fees and taxes.

And since we’re all using hypotheticals, you might find that after those 8-10 yrs of renting while your kids are in college that you’re all Disney’d out and sell everything and so in the end you only kept your points as a commercial rental enterprise, even if unintentionally. So if and when you decide you need more points again, you buy more then.

The right to rent, though allowed in our contracts, should not supersede the original and primary intent of DVC. Renting is a secondary and, more specifically, limited benefit. It should and will remain as part of our contracts but DVC should properly define and enforce what’s written.

Selling and buying a contract isn’t a frictionless transaction. There are a lot of fees and commissions involved with the buying and selling process.

 

[MerlinandtheMouse]

So is Disney going to set an example and stop its own commercial renting of DVC points?

This was discussed much earlier. Disney has a different set of rules for themselves which we all agreed to when we signed our contracts. They hold much more power when it comes to breakage and their rentals. Our renting has limitations. The problem now is that DVC never clearly defined those limitations (likely purposefully) and therefore have never properly enforced anything, and we all know what happens to fruit laying on the floor too long, unpicked and neglected (on another note, I’m impressing myself with all these callbacks from earlier in the thread…I think I need a life). So yeah, it’s created a growing problem that is now big enough they feel they need to address it.

And like @Brian Noble said, whatever they do, 25% of members will be happier, 25% will be upset and 50% don’t know if booking a room at AKL comes with Animal Kingdom tickets or not.

 

[AstroBlasters]

The bottom line is that the more complicated the system is then the more difficult it will be to convince people on vacation to pay $20-$30k to buy a 40-50 year timeshare.

A small percentage of people want to make the system much less flexible and restrict owners options and I hope they never succeed.

Another even smaller percentage of owners operate as a commercial business solely for profit and I hope that DVC finds a way to identify those owners and minimize the practice.

The overwhelming super majority of owners do not want a complex system and the current system works just fine.

 

[zavandor]

Do they have to change points/seasons at all resorts the same? If I understand correctly, the majority of the resorts with the worst problems do not have any FW available…so you could rebalance at crescent lake and VGC even if you can’t rebalance at VGF and VDH, right?

No they don't and they already have differences. The beach and DL resorts already have different seasons than the WDW ones. But a simpler system has its merits, so I think they prefer to have all WDW resorts have point charts calculated with the same algorithm.

ETA: I am not actually sure it would be prudent for them to do. The DVCMC should not care for DVD profit. If they see early December as a problem, they should reallocate, regardless of the lost revenue. If they reallocate all resorts without FW only, it wouldn't be difficult for someone to sue for negligence.
That's why they just ignore the problem and if questioned they'll say: we don't think the imbalance is big enough to warrant a reallocation. Since they are the only ones who can judge this, it's easier than having to explain why BWV has too high demand and VGF doesn't for the same week.

 

[Cyberc1978]

Curious to know how good faith and tacit acceptance works in the rental cases?

The POS prohibits commercial renting. However DVC has for years tacit accepted members and LLC (for that matter) to rent multiple reservations each year. Any owner renting has done so in good faith, because if DVC concluded that they were commercial renting they would have informed the owners ie with a cease and desist letter.

For the sake of the membership it’s been DVC’ duty to uphold the rules of the POS.

Since DVC have said nothing and done nothing, at least to the wast majority of owners, how long after new rules or new interpretations have been implemented can DVC reasonably start their crack down? You could argue that reservations made before the new rules are created in good faith - owners have been doing what they’ve always been doing.
Just wondering when we as members could start to see a difference in availability or booking behavior

 

[MerlinandtheMouse]

Selling and buying a contract isn’t a frictionless transaction. There are a lot of fees and commissions involved with the buying and selling process.

Of course there are. There are also a bunch of add-up fees and taxes for renting. But using your specific example, you’ve now stopped using your points for their intended and primary purpose for an unknown amount of time to rent a significant portion of your points. Once it stops being primarily for personal use vacations, and Disney’s contractual rules makes it so you have no choice but to sell some of your contracts, it’s because their concern isn’t the loss of value in your contract or the fees you’ll have to pay to sell your timeshare, which we’ve all agreed is a depreciable luxury purchase. Their concern should be in protecting and enforcing our contracts which stipulate renting in a reasonable and limited matter. And they’ve been neglecting their duty. Which is the whole point of this endless, circular, 56 page thread: debating what those definitions are. Maybe I can’t explicitly define commercial renting, but it’s sometimes I know it when I see it and hear the details, kind of thing. And I personally don’t think Disney allows renting in case someone needed to rent for years while their kids go to college. And I’d bet if we put that up to a poll, I don’t think that would be an extreme or controversial take. I think renting was always meant for the unfortunate, and hopefully rare, unforeseen circumstances that life sometimes throws at us.

Listen, in reality, I don’t really care if you or Prince Hans from the Southern Isles need to rent for a couple years to get rid of some extra points you don’t need cause your Disney trips slowed down. But I do think if it becomes a regular practice for a larger percentage of the membership, it would be wholly disruptive and frankly, I think rental culture is hurdling in that direction. It’s certainty being advertised heavily enough by a few key players that certainly gain a lot from Disney’s reluctance to crack down on commercial renting. What’s that saying about a few bad apples?

So in the end, I think we all agree it is up to Disney to enforce the restrictions which they have already set in place in a manner that they believe will be the most beneficial to the greater membership. Restrictions put in place, by the way, because I believe they knew even then that rentals could be exploited and eventually cause harm to the membership. And maybe you’re right and commercial renting currently really is a small problem and being over blown, but root rot is rarely noticed until it’s already caused too much damage.


ETA: actually, Hans sucks. I’d care if he broke the rules and I’d be the first to lodge a complaint. Don’t try to kill Anna and usurp Elsa’s throne and we’ll be alright.

 

[Hubalorian]

Of course there are. There are also a bunch of add-up fees and taxes for renting. But using your specific example, you’ve now stopped using your points for their intended and primary purpose for an unknown amount of time to rent a significant portion of your points. Once it stops being primarily for personal use vacations, and Disney’s contractual rules makes it so you have no choice but to sell some of your contracts, it’s because their concern isn’t the loss of value in your contract or the fees you’ll have to pay to sell your timeshare, which we’ve all agreed is a depreciable luxury purchase. Their concern should be in protecting and enforcing our contracts which stipulate renting in a reasonable and limited matter. And they’ve been neglecting their duty. Which is the whole point of this endless, circular, 56 page thread: debating what those definitions are. Maybe I can’t explicitly define commercial renting, but it’s sometimes I know it when I see it and hear the details, kind of thing. And I personally don’t think Disney allows renting in case someone needed to rent for years while their kids go to college. And I’d bet if we put that up to a poll, I don’t think that would be an extreme or controversial take. I think renting was always meant for the unfortunate, and hopefully rare, unforeseen circumstances that life sometimes throws at us.

Listen, in reality, I don’t really care if you or Prince Hans from the Southern Isles need to rent for a couple years to get rid of some extra points you don’t need cause your Disney trips slowed down. But I do think if it becomes a regular practice for a larger percentage of the membership, it would be wholly disruptive and frankly, I think rental culture is hurdling in that direction. It’s certainty being advertised heavily enough by a few key players that certainly gain a lot from Disney’s reluctance to crack down on commercial renting. What’s that saying about a few bad apples?

So in the end, I think we all agree it is up to Disney to enforce the restrictions which they have already set in place in a manner that they believe will be the most beneficial to the greater membership. Restrictions put in place, by the way, because I believe they knew even then that rentals could be exploited and eventually cause harm to the membership. And maybe you’re right and commercial renting currently really is a small problem and being over blown, but root rot is rarely noticed until it’s already caused too much damage.


ETA: actually, Hans sucks. I’d care if he broke the rules and I’d be the first to lodge a complaint. Don’t try to kill Anna and usurp Elsa’s throne and we’ll be alright.

Before casting stones at Hans, you may want to do a proper investigation against those pesky trolls. They seem to have some magical abilities and Hans was Prince Charming before the trolls sang “Fixer Upper” to help their adopted son.

 

[HyperspaceMountainPilot]

Before casting stones at Hans, you may want to do a proper investigation against those pesky trolls. They seem to have some magical abilities and Hans was Prince Charming before the trolls sang “Fixer Upper” to help their adopted son.

I’ve seen that movie more times than I care to count and as far as I can tell, the only hint we get that Hans is nefarious is that he tells Anna “sandwiches” was how he also was going to complete “we finish each other’s…”, so we get a hint he’s a liar.

 

[tx911]

The bottom line is that the more complicated the system is then the more difficult it will be to convince people on vacation to pay $20-$30k to buy a 40-50 year timeshare.

A small percentage of people want to make the system much less flexible and restrict owners options and I hope they never succeed.

Another even smaller percentage of owners operate as a commercial business solely for profit and I hope that DVC finds a way to identify those owners and minimize the practice.

The overwhelming super majority of owners do not want a complex system and the current system works just fine.

That's only because there's another small percentage that are taking advantage of the flexibility that DVC provides us, thereby irritating the **** out of the other small percentage

So who's at fault, the ones who misuse the system, or the ones who want that misuse prevented?

OTOH, I would hate for the product to become so restrictive that a case like your college tuition example would be against the rules. I want the membership to be able to have value through the ebb and flow of life by being flexible enough to tolerate changes in life circumstances.

I'm hopeful that DVC shuts down the large-scale commercial renting, which I think we all want.

Idk the right answer for the smaller scale stuff, and it may be a solution in need of a problem, but I do believe that renting the majority of points every year is a perversion of the system.

 

[xdan0920]

Idk the right answer for the smaller scale stuff, and it may be a solution in need of a problem, but I do believe that renting the majority of points every year is a perversion of the system.

I agree, and to further that point...

I think, the smaller scale stuff is adding up to at least a big a problem as the handful of LLCs we all want shut down. Thanks to the explosion of the third party rental market, we are looking at literally thousands of confirmed reservations listed for rent at any given time.

There is a lot of talk about "losing flexibility" if Disney cracks down on renting. I believe the opposite. If Disney cracks down on renting, my flexibility in using my membership will improve.

When my 10 year old is in college and I am stuck in a spaceship maybe I'll regret this line of thinking though....

 

[Chuck S]

They actually don’t need to do that. An algorithm could trigger an automatically generated letter and they can shut off the people from the booking site who don’t submit standardized paperwork establishing the rentals weren’t for profit. There would still be some cost to review, but they can shut people off who violate the T&Cs without winning in court first.

There is no court, our contracts all specify arbitration. If it did make it's way to court, and DVC lost a few cases, imagine the modern Social Media.... Disney Tries to Stop Innocent DVC Owners from Booking Rooms...it would be a disaster as far as publicity, and who pays for all the court costs and lawyer fees for both parties? The legal line item in the dues.

 

[lowlight]

There is a lot of talk about "losing flexibility"

For many people, what they mean is “losing money”. You’d have to be blind to not see the potential for being a medium sized owner who rents 80% of their points and still uses some to take a nice vacation every year. The prospect of losing that and likely having to sell extra contracts at a loss would make me a vociferous defender as well.

The writing is on the wall, the only question is how deep does DVC go. These renters would like you to think there is no way to throw out the bath water without the baby, but there certainly is and it’s very simple and already in all the contracts. Pattern of rental activity. What’s the pattern they will ask? Like the PP said, “I know it when I see it”, and so does DVC. What they really want to know is how far they can push it and what contracts to keep so some vestige of their former life lives on.

 

[Sandisw]

Will no one think of poor Don?! Would you have him give all his points to breakage while he’s being probed on an alien planet? Answer me!!



Put aside the fact that all renting is commercial, because that’s a different argument.

Person A has 500 points and uses 400 of them most years, sometimes more, sometimes less depending on room type. Some years they bank the extra, and some years they rent it to recoup dues. They’ve been owners for 10 years, and due to emergencies in year 5 and 7, they rented all their points. While they are commercially renting, it’s clearly not operating as a business and doesn’t have a pattern to it.

Person B has 500 points and uses 100 of them on a Boardwalk studio every year. They take the remaining 400 and book rooms and rent them every year. They’ve been members for 8 years and have done this every year except 1, when they used all the points for a big family trip. This person is renting their points as a business and it has a pattern to it.

Do you disagree with this?

Maybe it was never about renting, maybe it was about the friends we made along the way.

I agree that Person B actions would be a pattern of rental activity that goes against contract and that is a pattern of activity that DVC would deemed using it for commercial purpose.

I agree that the actions of Person A are well within the rules of the contract but I do not agree they renting for commerical purposes or that what they are doing is commerical renting in the context of DVC. However, in your example, if I am Person A, then my reserving the RIV SV studio for rental because I have extra banked points I can't use that year would fall within bounds.

Renting is allowed per the contract so when we have these discussions, I am always going to go push back on referring to actions that many would agree are in bounds as "commercial renting" That is the distinction here in the discussions and it can't be pushed aside.

DVD expressly included language that gives owners the right to rent but limited using memberships as a business and included language for owners as guidance on what they might use to determine it.

So, the discussion isnt about the definition of the world commerical, but in the context of the contract that commerical can be definied by DVC to be a pattern of activity that the board can reasonably assume is using it as a commercial enterprise or purpose.

We can certainly all have opinions on where that threshold of "pattern" lies.....but something has to trigger DVC to review a membership and decide the owner has gone out of bounds.

 

[Sandisw]

Do they have to change points/seasons at all resorts the same? If I understand correctly, the majority of the resorts with the worst problems do not have any FW available…so you could rebalance at crescent lake and VGC even if you can’t rebalance at VGF and VDH, right?

I do think this is the biggest problem (by far)— but also, and I can’t believe this hasn’t been discussed but, does anybody know if DVC can make all rentals (or at least 3rd party rentals) go through DVC? Like basically set up their own version where you can trade in your points or directly match you with owners and take the broker cut?

It’s been on the ground so long it’s rotting and creating quite the miasma.

To me, this is the hardest edge case…but it’s why I am barking up the tree or stopping spec renting and renting the most profitable units in particular. If you can’t travel for 5 years and want to transfer your points (which definitionally are going to other owners) at $20/pt (or inflation adjusted equivalent) that seems super reasonable. Or booking some of the less loved but still worth more than $18/pt/night reservations inside of 7mo… only the people truly needing to maximize profit need to spec rent or book very in demand categories.

Yes, it could go either way, but speaking purely as a member, somebody transferring/renting at 2x dues or less is way more sympathetic than somebody renting at 4-5x dues with spec rentals.

They actually don’t need to do that. An algorithm could trigger an automatically generated letter and they can shut off the people from the booking site who don’t submit standardized paperwork establishing the rentals weren’t for profit. There would still be some cost to review, but they can shut people off who violate the T&Cs without winning in court first.

I do think that whatever they do should take into account non-traditional family structures, naming conventions, etc., which will add more complexity to enforcement.

Frankly, I wouldn’t be surprised at all if commercial renters were willing to link guests as friends and family, especially if the linked account doesn’t go to the parks often.

I’m still haven’t heard any explanation as to why anybody would need to spec rent other than for a commercial purpose. It’s not hard to do a normal on demand rental or even after 7mo rental and still cover your costs. Similar situation for high demand rooms— I would hope we can all agree that owners (and perhaps friends and family) should get first crack at room use before someone trying to rent them out, and I don’t understand why anybody who owns for personal use would object to that. Restricting rentals to 9m at home resort and 6m SAP would dramatically hamper the worst commerical actors without making it hard for owners to rent when they need to.

I personally think renting what’s still available at 9 (home)/6 (SAP) months would give owners the ability to rent/transfer (either directly or through brokers) and cover more than their dues.

I genuinely don’t understand why anybody who owns DVC primarily for personal use thinks renters should be able to have equal priority with owners, or why anybody thinks spec rentals are necessary for non-commercial use.

No one needs to spec rent and of course one can wait until 6 to 9 months to rent. That is not the point. The point is that the contract was written to limit a level of renting in which the owner was doing it as a business.

Neither spec renting nor booking for a renter 10 to 11 months ahead turns the membership into a business. That is why I would push back on that.

Let's use my example from yesterday...I want to be able to rent to offset my dues that I have to pay this month....so I grabbed a RIV SV studio for 3 nights next December....got it by sheer luck....and spec rent it today because I have a high confidence level it will be snatched up fast and I will have my money by the due date. Do I all of a sudden become someone who is renting outside the terms of the contract because I did this? IMO, no....which means I am renting within the rules.

That is why I am against DVC setting in place rules that limit renting when those actions, in and of themselves, are not commerical in the context of DVC...

Now, an owner who does a lot of spec renting by grabbing up the hard to get rooms because they offer an extra profit would certainly appear to be using their membership as a business, but not because of the spec renting, but because of the volume or regular pattern of doing it.

So, no, I do not want to have my contract changed to broaden the limitations to include actions that the average owner can take to rent that doesn't create a "business".

There would be nothing stopping DVC from becoming a broker and requiring owners to rent through them. They would not do that because they have their own points to rent and of course, it would be in direct conflict with the hotels division.

Its funny that you mention transferring for money...that is expressly against the contract and if DVC wants to crack down on something that is outside the realm of what is a commerical purpose, it should be that.

In terms of why I don't care if a room is occuplied by an owner, guest of the owner, or even a renter? Because that is the product that I bought....I bought it knowing that DVC can be used by all three. I bought understanding that what myself and fellow owners are not supposed to do is turn DVC into a business.

That is why what I expect from DVC is to stop those owners who have found a way to set up DVC as a business under reasonable rules that clearly indicate it is a business. I have no desire to give DVC the power to limit my right to rent by putting in rules that many would consider clearly not running a business.

 

[chicagodisneyguy]

There is no court, our contracts all specify arbitration. If it did makes it's way to court, and DVC lost a few cases, imagine the modern Social Media.... Disney Tries to Stop Innocent DVC Owners from Booking Rooms...it woulkd be a disaster as are as publicity, and who pays for all the court costs and lawyer fees for both parties? The legal line item in the dues.

I think you are WAY overestimating the fallout. Look at all the blow back when DIS initially announced the DAS changes last year. That affected way more people than this would. And the blow back from that has all but dissipated. The Florida politics issue during the pandemic got HUGE blow back....and now most don't care. Chapek and his decisions created hurricane style blow back....and that is mostly forgotten as well. Compared to all the other issues over the last 5 years....this would be a extremely short blip on the radar.

Once Disney sets its parameters for what constitutes "commercial" renting, I think a vast majority of people they investigate will mostly be engaged in commercial renting. It won't be 100%, but I don't think it will be far off.

I think initially they will go after the large LLCs. I'm sure DVC knows who most of them are. Then I think they will go after the LARGE point holders....think 1,000 and up that consistently rent out huge percentages of those. Then, I think they will stop and see where that leaves them. I could honestly see them not really caring about the people with less than say 500 points...even if they rent most of them. But I think it will depend on how much they think those owners affect the overall program as well as DVC/DIS bottom line.

 

[Sandisw]

This was discussed much earlier. Disney has a different set of rules for themselves which we all agreed to when we signed our contracts. They hold much more power when it comes to breakage and their rentals. Our renting has limitations. The problem now is that DVC never clearly defined those limitations (likely purposefully) and therefore have never properly enforced anything, and we all know what happens to fruit laying on the floor too long, unpicked and neglected (on another note, I’m impressing myself with all these callbacks from earlier in the thread…I think I need a life). So yeah, it’s created a growing problem that is now big enough they feel they need to address it.

And like @Brian Noble said, whatever they do, 25% of members will be happier, 25% will be upset and 50% don’t know if booking a room at AKL comes with Animal Kingdom tickets or not.

DVC did define renting for commericial purposes in 2008....they indicated that a membership that had more than 20 reservations in a rolling 12 month period would be subject to review, and it would be assumed that the owner was engaging in a commerical purpose. Any reservations over 20 would be canceled, unless the owner could provde to DVC's satisfaction that none of the 20 were rentals.

So, we have some insight into where DVC drew the line....now, they have since gotten rid of that language and made it less clear in that it is a "pattern of activity" that one can reasonably conclude is you running a business. In my conversations with them last year, they pointed to the terms of the contract and the summary of all of it was that, I, as an owner, it is my job to follow the terms of the contract....and understand the intent of that clause.

That tells me that as long as what I am doing seems reasonable, I should be fine. If DVC decides it is not, they will let me know.

I am taking the statements by the board at the meetings as a guide. They mentioned several times large point owners who have found away around the rule but are the ones savy enough to know how to capitalize on it.

 

[Sandisw]

Curious to know how good faith and tacit acceptance works in the rental cases?

The POS prohibits commercial renting. However DVC has for years tacit accepted members and LLC (for that matter) to rent multiple reservations each year. Any owner renting has done so in good faith, because if DVC concluded that they were commercial renting they would have informed the owners ie with a cease and desist letter.

For the sake of the membership it’s been DVC’ duty to uphold the rules of the POS.

Since DVC have said nothing and done nothing, at least to the wast majority of owners, how long after new rules or new interpretations have been implemented can DVC reasonably start their crack down? You could argue that reservations made before the new rules are created in good faith - owners have been doing what they’ve always been doing.
Just wondering when we as members could start to see a difference in availability or booking behavior

Honestly, I don't expect them to announce anything and that the crackdowns that might be occuring won't be noticed.....because I truly believe that the players that are crossing the line are few and far between.

The board's statements seem to support this...not a common practice... and its why I feel confident that whatever threshold they will be using to go after owners they have identified as running a business will be what most will agree with should be stopped.

The LLC clause is the easiest one for them because it already exists. There are certianly owners out there who put their contracts in LLC's that may want to rent but aren't a business, but for them, it was a risk since the contract outlined who is eligible for using those points.