More Rental Concerns

[Bigcat]

I would oppose any attempt to change the rules and regulations regarding renting points. When I bought my points I signed a CONTRACT, just like everybody else. I intend to live up to the terms of the that contract. If I want to rent points, the terms say I can. If some of the members are unhappy with the terms of the contract, then maybe they shouldn't have signed it!

Off-Site 2/92
Coronado Springs 11/98
Swan 3/00
MOWC 7/00
BWV 1/01
Hilton Head Isl DVC 3/01
BWV 11/01

 

[PamOKW]

DVC in its discretion may change the terms and conditions of the membership agreement and the rules and regulations. These changes may affect an owner's rights to use, exchange and rent his ownership interest...

Commerical purpose shall include, but not be limited to, a pattern of rental activity by a Cotenant that the Association, in its reasonable discretion, could conclude constitutes a commercial enterprise or activity.

Just some of the paragraphs that show DVC does have a way to monitor things.

My concern is not the individual renter. It is the potential for members with large numbers of points or members who agree to act together to form a rental business. The attempts to try to raise the prices asked for rentals smells of "business". It's not recouping costs, it's looking to profit.

I think members should express their feelings pro or con to DVC so they can think about the future and what's best for the majority of members. They are the ones with access to real numbers and they are the ones who know if it's a problem or not. It's just clear that the potential is there.

The stumbling block to really profiting is that when you have to include weekends, the price difference between Disney and member rental drops dramatically. Maybe the points should be readjusted so that the days are equal

 

[spruce]

I hope that DVC never evens out the points so that every day of the year costs the same number of points. I've travelled over xmas, summer, Oct and Jan. I like the off season values but am willing to spend more points for higher seasons as well....spruce

Offsite 87,92,97,00
CBR 95
DI 98
Vero 98
BWV 98,99,00
OKW 99x2,00,01
DCL 98,01

 

[KNWVIKING]

I guess I'm dense. I don't see how someone renting their points-even for a profit- is affecting me.I book my trips at 11 months,always get what I want. Your not over crowding the resort by renting to others,your not bumping me out of my time slot,your not costing me a dime. I don't care if the persom in the next room is a member or renter.

 

[slindamood]

Property law, not just the contract, controls what may be done with DVC property and the restrictions that DVC may put on owners. States whose law derives from English common law, which includes Florida and Ohio, have a doctrine known as free alienability of real estate. That means that DVC cannot unreasonably limit the transfer of property rights, which includes the right to rent the use of that property. DVC owners have a legal right to rent the use of their property.

Points are just a symbol of how much DVC real estate each owner has a right to control. No one can use more than their number of points and must follow the rules. Thus, when a person rents points out, they rent no more than the property that they have a right to control. They have not taken away from anyone else.

Whether you get money when you rent points or the love and kisses of your relatives, you are receiving something of value. It does not matter what you receive for the transfer. Whether you use points by occupying the unit yourself, give them away, or rent them, you still are using your amount of property right.

Disney is limited by property law when it comes to controlling a member's right to rent. DVC can state that points are not for business purpose, but exactly what that means probably can only be determined in a court. It cannot mean that a person cannot rent points. For a parallel example, even though a person's apartment lease may say no subleasing, a court (in Ohio and most common law states) will interpret it to mean "no subleasing without approval of the landlord and that approval cannot be unreasonably withheld." That means that landlord can only apply the same standards to a sublease that he/she applies to new renters.

So, even though some would want to leave the points unused when a member cannot personally use them, it is an inefficient use of resources and property. Common law upholds the right to rent out the use of property, Disney knows this, and the rules and contract reflect this.

 

[TroyWDW]

Here are two places that explicitly talk about a Member's right to rent their Ownership Interest.

Troy


PRODUCT UNDERSTANDING CHECKLIST
(this document is signed by the purchaser)

6. You may sell, rent, transfer, or will your Ownership Interest. DVD has a right of first refusal to repurchase your Ownership Interest on the same terms and conditions, including financing, that your buyer has offered. DVD currently provides no assistance in resale or rental of your Ownership Interest. In the event you attempt to resell or rent your Ownership Interest, you would compete with DVD for buyers and renters at a substantial competitive disadvantage.


In the "Member Guidelines for DVC" the following statement can be found.

III. MEMBER BENEFITS AND PRIVILEGES

5. RESERVING VACATION HOMES FOR NON-MEMBERS

3) When a Member uses his or her Vacation Points to reserve a Vacation Home on behalf of a non-Member, and the Member does not charge any rental or other fees to the non-Member for the reservation, the non-Member is eligible for some Member privileges and benefits that a Member would normally receive during his or her stay in a Vacation Home. If the non-Member is renting, it is the responsibility of the Member to notify Member Services when making the reservation. Member privileges and benefits cannot be extended to non-Members who rent Vacation Homes from Members.

 

[PamOKW]

There's no denying that renting of points is allowed. It's just a question of being sure it is properly monitored. Let's highlight a different part of your same quote:

<BLOCKQUOTE><font size="-1">quote:</font><HR>3) When a Member uses his or her Vacation Points to reserve a Vacation Home on behalf of a non-Member, and the Member does not charge any rental or other fees to the non-Member for the reservation, the non-Member is eligible for some Member privileges and benefits that a Member would normally receive during his or her stay in a Vacation Home. If the non-Member is renting, it is the responsibility of the Member to notify Member Services when making the reservation. Member privileges and benefits cannot be extended to non-Members who rent Vacation Homes from Members. [/quote]

Just like every other discussion we have here, we don't have all the information so we can't really judge what is or is not a problem. We don't know if 5+ in a room is becoming more common and causing problems, if it is any more difficult than in the past to book BWV, whether a Vero purchase is a mistake, or whether rentals are having any effect on the overall program.

 

[TroyWDW]

PamOKW,

I was simply answering the question posted by Doctor P.

<BLOCKQUOTE><font size="-1">quote:</font><HR> Several people have noted that DVD explicitly allows renting. All I can find in the documents is language that implies that renting is allowed. Can somebody help me with an explicit statement that renting is allowed? [/quote]


I provided the explicit language and was not trying to include/exclude any specific point of view. Cheers.

Troy

 

[drusba]

As we are now well into the discussion of the law, one of my favorite topics, I thought I would add a few more comments as the ones I made before apparently did not fully discourage the hope that DVD might be able to do something to curb renting. It is probably stretching it quite a bit to talk about "free alienability" rights under property law to say that DVD cannot act. Free alienability has never been an extreme and there are a lot of restrictions that one can put on it including severe limitations to renting.

But here it is not needed. Under Florida timeshare law, terms in timeshare documents involving the owner's ability to "sell, convey, or lease" the ownership are deemed material to the agreement and "any restrictions" on those must be expressly set out in the documents given to the owner before closing. Post closing, the developer cannot make any amendments or changes in rules, regulations or otherwise that "would prejudice or impair to any material extent" the rights granted an owner. In the documents, Disney reserves the right to make future amendments or changes but that right, as stated in the documents themselves, cannot be used to "prejudice or impair to any material extent the rights of an owner." In other words, DVD's amendment right is severely limited. It is the same limitation that protects us from DVD just deciding the raise the total number of points needed for every night of the year. In fact, as we all know DVD reserved the right in the documents to "shift" points among nights as long as it did not raise the total. If that right to shift had not been expressly set out in the documents from the outset DVD could not even do that--and could not even attempt to add it now. DVD cannot by amendment or rule change pass any more restrictions than already exist to an owner's right to rent. It is legally impossible; if it tried, regulators would be breathing down its neck and the only issues would be how high should the fine be and should its timeshare development license be terminated. It cannot even set up rules suggested about limiting when rentals are allowed or when they can begin (like less than 7 months out). It is legally hamstrung. It is a dead issue.

Thus all DVD can rely on is the restriction in the agreement, which is vague, in that it can possibly act against somebody if they are engaging in "repeated" renting to the extent it amounts to a "commercial enterpirse." With that DVD faces one of the rules of law that is universal--in any dispute with an an owner involving the documents that DVD drafted any and all vague language will be construed in favor of the owner. The best DVD can hope for with its language is that a court will rule it can prevent people from actually being in the regular business of renting points; any one acting short of that--such as doing it part time while using points sometimes-- is going to win the issue.

Thus, for those against renting, you need a different avenue of attack from the hope that if enough is said DVD would actually do something. It can't.

n

 

[Dean]

Although Partly answered, below are some things I found that pertain that I thought pertained to this and related arguements. I recently stated, in response to Rich, that I thought a members only reservation time was reasonable. Say a month or so but it would need to be for the member or immediate family only (parents, children only) and not for aunts, cousins, etc. The reservation could not be converted, it could only be used or cancelled though it could be rebooked for a renter, friend, etc when that window opened up as long as the reservation were still openly available. I believe the legal wording would support that.

This is from the Exhibit "I" to the Declaration of Condominium section "Section IV. RENTALS
Subsection 4.1 Club Member Rentals A Club Member may make a reservation to use the accommodations of the Condominium or other DVC Resorts, if any, himself, make their use available to family or friends or guests, or rent them solely through his own efforts. DVD's approval of a rental by a Club Member is not required after a reservation has been made in the renter's own name, and Club Members are permitted to rent their occupancy rights on terms and conditions that they may establish. No rental assistance is being offered by DVC or DVC or any affiliate or subsidiary of DVD and DVC. All renters must comply with the rules and regulations affecting occupancy , and the renting Club Member will be responsible for the acts or omissions of his renters or any other person or persons permitted by the Club Member to use the accommodation. Neither DVD or DVC in any way represent or promote that a particular DVC Resort accommodation can be rented, or if it is rented, that any particular rental rate can be obtained for such rental."

Under PUBLIC OFFERING STATEMENT TEXT
Section 16 Restrictions upon Rental or Resale - discusses rentals and resales and that DVC is due any monies owed to them. It also references the above, as well as the Declaration of Condominium and Master Cotenancy Agreement.
Section 16 further repeats the wording in 4.1 above. This section also states that the membership cannot be subdivided except back to DVC with their permission.

Declaration of Condominium under Article XII was referenced by TroyWDW and PamOKW.

Section 18 of the POS states that "DVC SHALL HAVE THE RIGHT TO CREATE SUCH RESERVATION APPROVAL RESTRICTIONS AS IT DEEMS NECESSARY FROM TIME TO TIME, AND COMPLIANCE WITH SUCH RESTRICTIONS SHALL BE REQUIRED BEFORE AND DURING POSSESSION AND OCCUPANCY OF A VACATION HOME, PURSUANT TO A RESERVED USE PERIOD, BY ANY PERSON OTHER THAN AN OWNER OR HIS IMMEDIATE FAMILY."

Several sites that discuss rentals and use also specify first come, first serve. "Because of the first come, first served nature of the use reservations and because of the other attributes of and limitations on the Ownership Interests outlined in the POS, Owners will be in competition with other Owners of Ownership Interest at the condominium for reservations.....in order to make use of this priority an Owner would have to make his reservations eleven months prior to his anticipated use.

Dean

 

[kem330]

As far as I can tell no one was against renting. I'm not in favor of abolishing rentals. These are just opinions about concerns about percieved abuses of the system. Why is it so wrong to want to remove SSPL from rentals? Why is it wrong to suggest members not reserve prime weeks BEFORE finding a renter? Maybe we should all just get on the SSPL and call at our 11 month windows and tie up ressies-LOL -just in case we might want to go then- I know -this isn't really feasible because it ties up points you might want for another ressie. Jeez it sounds like you're ready to call in the ACLU. Well honest, we're just asking for a little consideration here, not rewriting all the rules.

 

[Dean]

kem330, it seemed obvious to me that you were in the middle on this one. I think you'll find that there are those that think that anything beyond just the yearly fees for the points should not be allowed for what ever their personal reasons. They tend to hone in on the Commercial enterprises language in the POS and I've seen it posted that anything that's above the maint fees is commercial and therefore should not be allowed. I've posted on several occasions that DVC could not legally prevent renting but it's been extensively explained by drusba and slindamood.

For the record, I'm not fond of scarffing up all the hot times and then trying to rent them out, it's just not what I'm comfortable with. I'm sure there are those that do. The "profit" just isn't worth the hassle but I've met so many nice people that I've talked to about renting. I've had pleasant conversations by email and phone with a number of people and enjoyed that immensely. I do love talking about DVC and timeshares in general. I'd say that in every case so far, the handful of renters I've had have been truly and extremely excited. One wrote after the visit, thanks for letting us use your home. Another sent us a plant. One came home and immediately planned another trip. I'm surprised none of them have bought yet, at least none that I know of.

Dean

 

[dmadman43]

<BLOCKQUOTE><font size="-1">quote:</font><HR>the "system is broke" [/quote]

now this statement has me more concerned than the point renting scheme. That potential for DVC being bankrupt is really disconcerting.

 

[PamOKW]

dmadman43 I didn't mean to imply all of DVC is "broke"/bankrupt I was talking about the rental system being broken/not working. I was referring to the loophole that is/could allow people to turn renting of points into a business. I'm just concerned that DVC keep an eye on how rentals are affecting members. (oops just saw your wink dmadman!)


Drusba and Dean I agree that it is too late now to stop rentals and I wouldn't really want members to be restricted from being able to share their homes. I just think the language is there to deal with gross abuse. I'm not sure if gross abuse has been achieved yet. Sometimes posts appear here or on E-Bay indicating that someone is looking to make as much money as possible on their DVC ownership. To what extent they'll go to achieve that, I can't say. It is not unreasonable to see them developing a side business in DVC rentals -- serving as an agent for others, building inventory and booking chunks of primetime weekdays for substantial profit. I'd like to see DVC flex their muscle and let people know that a true rental business along those lines will not be permitted. That is the type of rental that has the potential to impact members. Booking a vacation for yourself or someone else using normal vacation patterns shouldn't impact us. Scarfing up weekdays and never using weekends or using SSPL purely to obtain rental property could potentially create problems. SSPL is a member privilege. For 12/31/99 they changed the rules making it a lottery and only allowing one reservation per member. It seems some restriction could be added requiring a member be on property to use SSPL. At 11 months, non-member reservations could be made.

This isn't something to go to war with each over. But I do hope DVC at least gives it some thought.

[This message was edited by PamOKW on 03-08-01 at 02:09 PM.]

 

[Doctor P]

I agree that there probably is no way to stop renting, nor should there be in the absence of abuse. While from a personal perspective I probably would prefer that owners not use the 11 month window regularly to obtain reservations to rent or use the 11 month window to provide reservations to renters, in the absence of a pretty clear pattern that violates the ban on using the membership for commercial purposes I don't think restricting members from using the 11 month window would be appropriate. However, I think it might be appropriate to have a window at the 11 month point where members could only make reservations in the name of someone on their contract with no changes to that name available (like concert sales with limits on the first day, one could program the system to only accept reservations for the first three days of the window (to get around the weekends problem that might occur) to members only reservations), and NO reservations under the SSPL can be made in other than a name on the contract with no changes allowed. This would still allow great latitude for renting, give members extra home resort preference for reservations for personal use, and protect the integrity of the SSPL.

 

[drusba]

Though a unigue suggestion from Doctor P to have a short member's only window with no change to the person on the ressie, it creates problems. For example, my daughter and her family are not on my contract but I make reservations for them with my points 11 months out (and there is no renting going on). The proposal would eliminate my ability to do that.

 

[Gary K. D.]

I own, in one of my contracts, 233 points at Boardwalk which, according to my deed, represents .1041% ownership in Unit 14. Do the math.... if .1041% of a unit equates to 233 points at Boardwalk then each unit represents 233823 points. There are 517 units at Boardwalk which, if my averages are correct, represent 120,000,000 points sold. That's right 120 MILLION points. OK ...maybe I'm wrong so it's half of that...60 MILLION points. How does anyone who might have a maximum of 2000 points at Boardwalk ...or .0033% of the total number of points available, going to make a substantial dent in the availability of rooms. While I have not made and then resold reservations at any of the Resorts or posted existing reservations available on a site such as E-Bay or the Rent/Trade Board, the impact of anyone renting points on any of the other owners should be minimal. Just my thoughts.

[This message was edited by Gary K. D. on 03-08-01 at 02:00 PM.]

 

[Toxicesq]

I agree with Kem330 and Doctor P and the many others who have expressed similar sentiments that the SSPL and 11 month window should be restricted to members, without the right to make changes in the names on the reservations. Unfortunately, right now, this appears to be a moral rather than a legal issue, since it's clear that rentals are permitted. But DVC certainly has reserved the right to make any changes that if it wishes. The problem with the "commercial" renters is that members who have made substantial monetary investments in DVC ownership can be closed out of prime weeks in favor of "drop in" renters with no stake in DVC other than their week's rent.

As far as those who customarily reserve prime weeks for their children at the 11 month window, I seem to recall that there is a concept of an "associate" which enables an owner to put additional names on the contract. (I'm at work,without access to my documents, so I can't check this). If I recall correctly, (adult) children's names could be added, thus allowing reservations on their behalf during "restricted" weeks.

Disneyland: '56,'91,'98
Disneyland Paris: '94
Disney Magic: '00
WDW Off-Site: '76,'98
Contemporary: '88,'90
Caribbean Beach: '93
Grand Floridian: '95
Dixie Landings: '97
BWV: 11/00

 

[Bumpy]

When I first read this I was upset that some members were taking prime spots and renting them. Now, after reading much convincing arguments posted I feel differently. When everything is said and done you have leased an 11 month booking window at a particular resort and that is all Disney owes any of us. Yes there are options for us but none of those options are guarenteed. Like anything in life you will have people disagree about what the SPIRIT of the contract is and what actually constitutes renting. This is Disney's decsion to make not ours. I have been happy with my DVC purchase over the years and I know that Disney will keep it this way. If and I do mean IF a problem arises and Disney does not fix it than I will sell my contract and move my busniss elsewhere. I think keeping our freedoms intact is worth a few people who may offend others by their practices. Just my thoughts!

 

[Dean]

PamOKW, I think most of us are in the middle on this one to one degree or the other. None of use want to see a major attack on the system by any group including renters, conventions, etc. What I fail to understand are the people that think you shouldn't be able to rent or shouldn't get more than your yearly fees or should only be able to rent off time or fairly short notice.

drusba, read my long note with the legal stuff in it. It says member and immediate family. That would keep you ok in that situaion and that is directly from the POS.

Gary, a sales unit is not the same as a room. For example at OKW, a unit is a building. I'm not sure exactly how they divided BW up into units but I suspect it's blocks of rooms. These are the units that are declared into inventory for sales purposes. At VB early on it was an entire floor and this proved disastrous as they could only rent those extra rooms as breakage and then that income went directly to DVC, not DVD. They fairly quickly "fixed" the system.

Dean