Legal Question-Are Members "responsible" for Renters?

[CarolMN]

I'd put the risk more on-par with getting into a car accident.

And most people transfer the risk of a car accident happening to an insurance company.

I'm not anti-renting either - I'm glad there are members willing to do it. (I don't).

That said, I am concerned that new members can get the wrong idea if all they have to go by are these forums.

From the flip way some recommend renting here, it is easy to assume it's a piece of cake! That's just not so. There are risks involved. And it can take time and effort - more than you might think if you get involved with a "bargain shopper" or an unscrupulous person or even someone who just doesn't understand that a DVC member is not Disney.

I am in complete agreement with Jim - renting is most risky when the owner is inexperienced and "doesn't know what he/she is doing." Experienced owners know that the risks can be greatly minimized and they take the necessary steps to minimize it for both parties.

Best wishes -

 

[Newcastle]

Just an aside here...it is my understanding that in order to charge purchases to your room key, you have to leave your credit card information at the desk. I realize the incident with the brother-in-law was a mistake in that Disney did not charge the room charges to the BIL's credit card. But barring this type of mistake, am I correct in assuming that there is no way that a renter would be free to charge to the room key without providing his/her own credit information??

 

[bicker]

And most people transfer the risk of a car accident happening to an insurance company.

Good point. And that's really notable -- no one is willing to offer any type of insurance for untoward situations that might affect rentals so folks who rent their points have to take that risk onto themselves.

 

[CarolMN]

Just an aside here...it is my understanding that in order to charge purchases to your room key, you have to leave your credit card information at the desk. I realize the incident with the brother-in-law was a mistake in that Disney did not charge the room charges to the BIL's credit card. But barring this type of mistake, am I correct in assuming that there is no way that a renter would be free to charge to the room key without providing his/her own credit information??

You are correct - no motel/resort/hotel that I know of will allow charges to the room without having the guest's credit card info.

Best wishes -

 

[crisi]

You are correct - no motel/resort/hotel that I know of will allow charges to the room without having the guest's credit card info.

Best wishes -

But they bill the card in lumps. With, I believe, a $1500 limit. Which means that an unscruplous renter out to rip you off could leave his imprint, cancel his card so the charge won't go through two days later, and bill $1500 to the room which the card wouldn't cover.

For someone who is intent on ripping someone off, DVC rentals makes it easy - both ways - an unscruplous owner or an unscruplous renter. We've been very fortunate that it appears most people aren't in this to defraud anyone. But renting takes a level of trust on both sides of the transaction.

Alternatively, and perhaps more likely, the renter could loose his card at WDW and cancel it. Disney would try to bill the card at checkout and couldn't (and the renter could simply forget that this was a problem). Disney may not have contact info for the renter - but they have yours - so you become the middle man in getting the charges resolved.

Most people who do rent think these risks are low enough to be managable. But they do exist.

 

[RobDoc]

...Alternatively, and perhaps more likely, the renter could loose his card at WDW and cancel it. Disney would try to bill the card at checkout and couldn't (and the renter could simply forget that this was a problem). Disney may not have contact info for the renter - but they have yours - so you become the middle man in getting the charges resolved.

Actually, I think the $1500 is actually "held" when the card is approved at check-in, so the charge would already appear even if the card were reported lost or cancelled.

Regardless, there are certainly risks involved for both parties. Those interested in participating in a rental just need to weigh those risks against the benefits and plan accordingly.

 

[JimMIA]

Actually, I think the $1500 is actually "held" when the card is approved at check-in, so the charge would already appear even if the card were reported lost or cancelled.

Doc's right. When the card imprint is taken, an "authorization" is obtained from the credit card processing house, and that authorization is as good as money in the bank. The merchant can submit any legitimate bills up to the amount of that authorization and they will be paid, period.

The cardholder can then dispute the charges, but the burden is on the cardholder to prove the charges were not legitimate.

What happened in the one case we discussed above is DVC forgot to bill the credit card. Authorizations are temporary encumberances against your credit limit and they expire. I'm sure that's what happened when DVC's auditors discovered they hadn't billed the charges, so they just dumped it on the member.

-----
One of the OP's original questions was whether a member be held responsible for damages caused by a renter. I think the answer to that question is yes, but I also think it is extremely unlikely and not what I would be worried about if I were renting.

I think renting is quite safe for renters and owners, as long as they both have a good basic understanding of the differences between renting a DVC ressie and booking a hotel room...and as long as the owner doesn't put themselves in the trick bag. Most of the angst we see here from owners is self-inflicted, IMHO.

 

[TheRustyScupper]

1) Are members responsible for renters?
2) You betchya.
3) We HAVE sent big bills to members for damage by renters.
4) I know of one member who refused to pay.
5) They thought the renter should pay.
6) We recinded the member's full membership
7) They actually lost ALL their points and their approx $20,000 investment.

8) Of course, the member could pay, then sue the renter.
9) But, that means
. . . hiring a lawyer in the renter's state and county
. . . having to travel to the renter's county for court
. . . lawyer and travel and missed work income fees may not be reimburseable
. . . now, you must find out if the renter can pay
. . . a lien is good, but do they have things to place a lien against
. . . garnishement is good, but you need to find their employment

 

[CarolMN]

1) Are members responsible for renters?
2) You betchya.
3) We HAVE sent big bills to members for damage by renters.
4) I know of one member who refused to pay.
5) They thought the renter should pay.
6) We recinded the member's full membership
7) They actually lost ALL their points and their approx $20,000 investment.
...(snip).....

Would love a few more details re lines 3) and 6) if you can provide them without getting yourself into trouble - i.e., what kind of damage? DId it look intentional or just the aftermath of a wild party? Did member challenge the forfeiture? Why didn't DVC go after the occupants first? And if they did, why didn't they collect from them? Etc.

Best wishes -

 

[rinkwide]

...We recinded the member's full membership...

Who's "We".

 

[Sammie]

Would love a few more details re lines 3) and 6) if you can provide them without getting yourself into trouble - i.e., what kind of damage? DId it look intentional or just the aftermath of a wild party? Did member challenge the forfeiture? Why didn't DVC go after the occupants first? And if they did, why didn't they collect from them? Etc.

Best wishes -

Why would DVC go after the occupants first, when the member is responsible for the renter?

 

[bicker]

I would expect Disney to go after the occupant to the extent they can with the information provided to them, i.e., a credit card. After that, they should go back to the member.

 

[Dean]

Technically and legally DVC members are responsible for their guests and renters. Obviously DVC will look to the guest first but as pointed out earlier, things can get convoluted. II members are responsible for their guests as well and it's spelled out in the information they provide. Overall it's a small risk if you set things up correctly.

 

[JimMIA]

3) We HAVE sent big bills to members for damage by renters.
4) I know of one member who refused to pay.
5) They thought the renter should pay.
6) We recinded the member's full membership
7) They actually lost ALL their points and their approx $20,000 investment.

I join rinkwide and Carol in requesting more information on this one. Like rinkwide, I'd love to know who "we" is. I've heard a lot about "they," but the identity of "we" would be quite interesting.

Second...even if a situation like this did occur, I have trouble seeing how "we" could have taken away someone's membership. I can see how DVC could tie up the account and not let them make ressies -- that's exactly what they did to the owner whose BIL's card did not get charged.

But DVC ownership is a deeded real estate interest and I don't see how that could be "rescinded." There's that pesky little "due process of law" clause in the Fifth Amendment that prohibits taking property without due process. Seems to me that there would have to have been litigation to take the DVC membership. Even in a case where an owner simply stopped paying the loan on their DVC, Disney would have to file a foreclosure suit.

I can't imagine this drastic an action unless there was some pretty direct connection between the owner and renter and there was a huge loss -- like an owner "rented" to his kids and their friends for Spring Break and they destroyed the unit.

As I said above, I have no doubt that members can be held accountable for damages done by a renter...but this scenario sounds way over the top from the sketchy info provided. Maybe if RS can flesh it out more, it will make more sense.

 

[JimMIA]

I'm not a lawyer, and I didn't sleep in that hotel chain last night, so I checked some of this with my lawyer. As I suspected, there is quite a bit of erroneous information here.

8) Of course, the member could pay, then sue the renter.

The lawyer said don't pay anything without having a competent lawyer review ALL of the documentation -- POS, the contract (if any) between renter and owner, the DVC lodging contract between DVC and the renter, etc, etc. He said in some circumstances if you paid the bill, you might waive any right to sue the renter. Even if that didn't occur, he said you'd want to be darn sure that you were the responsible party of last resort, and that Disney had exhausted all their remedies before turning to you.

9) But, that means
. . . hiring a lawyer in the renter's state and county

Nope...not necessarily. If you had a contract, you could sue in your home state if that's what your contract specified -- a common contract clause. You could also sue in Florida because that's where the breach of the contract would occur -- convenient for Rusty and I and many others. And finally, in most states, if the amount of damages was $5,000 or less, you wouldn't even need a lawyer for the first step. You could sue in small claims court, and you wouldn't need a lawyer for that.

. . . having to travel to the renter's county for court

Nope, see above. If the renter lived in a different state from you, once you got your judgement, you would have to domesticate the judgement in the renter's state in order to enforce it, but that's just phone calls and credit card numbers between you and a lawyer there.

. . . lawyer and travel and missed work income fees may not be reimburseable

Lawyers fees may be recoverable, as well as interest if the bad guy doesn't pay within 30 days.

. . . now, you must find out if the renter can pay

Uh...yeah.

. . . a lien is good, but do they have things to place a lien against

When my lawyer came back to the phone after his laughing fit, all he said was "A little information is a dangerous thing." A lien is as good as the value of the underlying asset and ease of gaining title to it -- so it could be good or truly ugly, depending on what the asset was and what you had to go through to get it.

. . . garnishement is good, but you need to find their employment

This one provoked another laughing fit, but the gist of his comments were that you'd garnish bank accounts, not salary, and you'd know where those were just in the normal course of the rental transaction.

I think the lesson is: if you need legal advice or assistance, go to a qualified lawyer, not the Internet.

 

[TheRustyScupper]

I would expect Disney to go after the occupant to the extent they can with the information provided to them, i.e., a credit card. After that, they should go back to the member.

It is not necessary to give a credit card number at checkin at any resort, especially if you are staying on DVC points. Therefore, finding the renter could be combersome. Plus, why should Disney go through all that trouble when going back to the owner is so much easier?

 

[DebbieB]

It is not necessary to give a credit card number at checkin at any resort, especially if you are staying on DVC points. Therefore, finding the renter could be combersome. Plus, why should Disney go through all that trouble when going back to the owner is so much easier?

What do they do when a non-member rents a room through CRO and something happens?

 

[bicker]

Then the "member" is Disney, and Disney is responsible for going after the renter, just like any other hotel at WDW.

 

[NYDisGuy]

It is not necessary to give a credit card number at checkin at any resort, especially if you are staying on DVC points. Therefore, finding the renter could be combersome. Plus, why should Disney go through all that trouble when going back to the owner is so much easier?

Am I wrong or dont you have to provide a liscense at check-in? I know in the past they photocopy your id for their records just incase something happened where you didnt pay the bill at check-out or you cancelled your credit card.

 

[Chuck S]

I don't think I ever had them photocopy my ID, they just matched the name on the license to the name on the ressie. That being said, cash ressies not booked through Member Services require a deposit, so in most cases there is some record of a credit card, whether one is left for room charging or not. The exception, of course, is DVC ressies and the DVC renters. they don't require ANY credit card, except for room charging. Basically the member sublets to the renter, and the member is responsible. I'm thinking though, that there must be a due process before a membership is actually forfeited and it can't be just "seized" without goin through a court process. They can put a block on the usage of the points.