Is renting out your DVC for profit legal?

[LenaN4fun]

I am confused about this issue. I see sale and auction listings (ebay) all the time for DVC rooms, and was under the assumption that this was considered subleasing for profit and not permissable. Am I wrong? Is this legal in our DVC contract?
I get aggravated due to 100% of all my vacation requests being waitlisted and 70% of the time I do get my rooms, but only 30 days before the check-in date. I have to believe this is due to renters reserving the rooms and then releasing them 30 days before the date so they dont lose their points. It is hard to plan a family vacation not knowing until 30 days beforehand if you are going or not. Knowing this, I would of never bought into DVC.
SO, knowing this is a problem and if it is illegal. Why are renters able to do it? and for that matter...on a continual basis? I hate knowing that I am paying for other non-DVC vacationers enjoyment.
Please advise...

 

[drakethib]

$1,000,000 question.

Depends who you ask.

 

[sean-1966]

"Legal" is a pretty strong word. DVC doesn't forbid renting out points for profit but they do discourage it. We've rented out points once. We did it because we had points we couldn't use. I don't think we got any profit from it though. I don't even think it covered our dues for the year.

 

[DVCconvert]

It IS in fact "legal" to rent points -- don't confuse "legal" with policy issues which are a part of DVC ownership...mind you, you may well need to declare any income from renting points you own as a part of your income tax.

 

[JimMIA]

"Illegal" is not really the word you're looking for. Renting a DVC reservation is not a violation of any Florida or federal criminal statute.

The question is whether it is a permissible use of one's DVC account. And the clear, indisputable answer to that is -- "It depends."

My understanding is that renting is specifically permitted by the POS. What is not permitted is "commercial use" of one's DVC account. Theoretically, that means if I want to rent some points because I fell asleep at the switch and missed a banking deadline, that's no harm, no foul. But if I want to do that consistently, then it could be considered "commercial use." The number of reps DVC has apparently identified as "commercial use" seems to be 20 in one year.

Opponents of renting cite the same issues you cite. Proponents say owners who rent are only using their home resort advantage as they see fit -- they have the same rights to reserve as you do, and if you don't reserve earlier than they do, that's your bad, not theirs.

Personally, I don't like the idea that "legitimate" DVC owners can't get ressies, but there is another side of the argument. Those who are "taking" the ressies from you say they are only exercising their rights as owners. My personal view is it would not take 20 reps of that behavior to convince me something was amiss, but I'm not running DVC.

 

[LenaN4fun]

So renting IS within the boundaries. I didn't realize that.
I just hate having to accept the idea of not being able to get a room, seeing all those listings on ebay, etc. and still making my payment each month.
I guess I need to know what I am doing a year from now and I'll hopefully get my reservation. Ugh!
Should've done my homework....LOL

 

[disneynutz]

So renting IS within the boundaries. I didn't realize that.
I just hate having to accept the idea of not being able to get a room, seeing all those listings on ebay, etc. and still making my payment each month.
I guess I need to know what I am doing a year from now and I'll hopefully get my reservation. Ugh!
Should've done my homework....LOL

There are probably a lot of owners that tentatively schedule a vacation and call 11 months out to get their dates. 30 days prior when they can't confirm their time off they cancel so that their points don't go into holding. Renting may be part of it but I don't think it's the main reason.

 

[mprewitt]

The POS has several sections that state that DVC is for personal use only, and that commercial use is prohibited. Yet other sections mention that we can rent them out.

Use of Vacation Homes and recreational facilities for commercial purposes or any purposes other than the personal use described in this Declaration is expressly prohibited. "Commercial Purposes" includes a pattern of rental activity or other occupancy by an Owner that the Board, in its reasonable discretion, could conclude constitutes a commercial enterprise or practice.​

Personal Use Only. Use of the Vacation Homes and related facilities of a DVC Resort is limited solely to the personal use of Club Members, their guests, invitees, exchangers and lessees and for recreational use by corporations or other similar business entities owning Ownership Interests while staying as a registered guest at a DVC Resort. Purchase of an Ownership Interest or use of Vacation Homes and related facilities of a DVC Resort for commercial purposes or for any purpose other than the personal use described above is expressly prohibited​

 

[JimMIA]

I just hate having to accept the idea of not being able to get a room, seeing all those listings on ebay, etc. and still making my payment each month.
I guess I need to know what I am doing a year from now and I'll hopefully get my reservation. Ugh!
Should've done my homework....LOL

I feel your pain, and I know it must be tough to get shut out and then see listings on eBay. But the reality is, that eBay listing is ONE reservation. There are a hundred legitimate, non-rental reservations in addition to that one you see, and they kept you out just as much as the one rental ressie. The truth is, if I snooze, I lose.

It's been said many, many times here -- DVC works best for those who can plan ahead.

That doesn't mean you will get nothing if you can't plan ahead, but it does mean that your chances shrink each week you wait.

 

[kimberh]

To the op: How far in advance are you trying to make a reservation? The earlier you plan, the better chance you will have of getting what you want. There are over 100,000 DVC members trying to get a reservation, some do bank their points, but some bring family members and need extra rooms. Look at the numbers.

 

[DebbieB]

The question is, what is "profit"? You have the initial cost, interest on the initial cost if you made payments, annual dues. What do you base your points cost on? If you rent for $10 a point, how much is actually "profit".

DVC retains some points and rents them out through CRO, so they are one of the biggest "renters".

 

[Tamar]

This is the flip side of the flexibility of a DVC contract....you're not buying a specific week or a specific size unit, so the time you want and the size unit you want might not be available when you decide you want them, unless you book at your home resort at 11 months (which is still more flexible than a typical timeshare, where you know where and when your reservation is for years to come).

I'm not in favor of commercial renting and I hate it when I see holiday week reservations for rent many months in advance, but I understand why others do it. I do occasionally rent some of my points, but I've never made a reservation on spec and never would...I just wouldn't feel right doing that, even if it is "legal".

 

[rinkwide]

So renting IS within the boundaries. I didn't realize that...

Yet another inconvenient truth. Maybe Al Gore could do another movie (or at least an infomercial).

 

[Granny]

It is hard to plan a family vacation not knowing until 30 days beforehand if you are going or not. Knowing this, I would of never bought into DVC.

I'd be surprised to hear that you are getting blocked out of DVC reservations if you are booking at the 11 month window. If you can't plan at least 7 months or more ahead, I tend to agree that DVC is not an optimal way to plan on accommodations.

I hear what you're saying, and feel your pain. But the best way to avoid the frustration is to book at the 11 month window. Then the whole issue pretty much goes away.

 

[LenaN4fun]

To the op: How far in advance are you trying to make a reservation? The earlier you plan, the better chance you will have of getting what you want. There are over 100,000 DVC members trying to get a reservation, some do bank their points, but some bring family members and need extra rooms. Look at the numbers.

Well, my longest booking request (5 nights) was done around 5 - 6 months in advance for a vacation and I was put on a wait list. Was told to wait list night by night for a better chance to get my room and slowly was getting my nights one by one. I actaully waited until 2 weeks before check in that I actually got my whole request. THAT was difficult because I didn't want the vacation if I didn't have the nights together and it was very last minute.
I never requested more than 2 nights after that (maybe due to fear...lol)...but I still get waitlisted.
My recent request (only 2 nights) I did exactly 7 months in advance and guess what, I am on the waitlist. No word yet.....

 

[Turtleship]

The operative word is "commercial." You can't call any gains in renting points profit, but if you did, it certainly doesn't rise to the level of "commercial." In a worst case scenario, DVC will buy back your points. This is a moot point.

 

[RobDoc]

The operative word is "commercial." You can't call any gains in renting points profit, but if you did, it certainly doesn't rise to the level of "commercial." In a worst case scenario, DVC will buy back your points. This is a moot point.

You can most certainly call gains profit. In fact, it might be very wise to report ANY gains to the IRS whether you regard them as profit or not.

DVC will NOT "buy back" anything regarding the rental of DVC reservations.

"Commercial Purpose" is a definition that only DVC has the authority define - unless someone chooses to challenge the definition in court - and then the court can define Commercial Purpose.

 

[mprewitt]

The operative word is "commercial." You can't call any gains in renting points profit, but if you did, it certainly doesn't rise to the level of "commercial."

Most dictionaries define "commercial" as "done with the primary objective of making money" and "intending to make money" and "for profit".

Thus, in layman's terms, commercial renting is renting with the intent of making money or profit.

I would be interested if there is a standard legal definition, especially as it relates to timeshares.

 

[salmoneous]

I would be interested if there is a standard legal definition, especially as it relates to timeshares.

Keep in mind that even if there were such a thing, it might not matter. DVC doesn't ban commercial renting as defined by standard legal terms. It specifically bans commercial renting as defined by DVC.

 

[Turtleship]

If DVC defines renting of points as commercial, what next? They can't take your real property without due process. In other words, they must buy back the points or live with members engaged in "commercial" renting. As for the IRS, my original purchase price on the points, annual dues, my time engaged in the renting of the points, at best will be a wash. Remember this fact when dealing with Disney, they sued day care operators for showing Disney videos to kids without paying royalties. If they believe the renting of points was against their rules, a Disney lawyer will be filing a cease and desist order against the operators of disboards.com to stop it from aiding DVC members trying to rent points on their board. Their silence speaks volumes.