Multi-Site POS Revision Dated 01/19/19

[ThinkBelieveDream&Dare]

2057 expiry so OKW? The OKW POS says differently and apparently so does Florida law.

That disclaimer won’t stand up — if challenged.

That contract will make you a club member with deeded rights to being treated the same as every other club member “as a whole” with specific respect to the reservation component. DVC can take away perks, but that cannot redefine what “club member” means not when it’s is part of the deed, as an “appurtenance” of the deed.

hehe ziravan... Thanks for the clarification. No, our contract is for AKV. I managed to find a copy of the AKV Declaration of Condominium online - is that the same as POS?
So far I've only read through to page 10 of 110. It's difficult to untangle the lawyer speak with my befuddled brain lol

 

[ThinkBelieveDream&Dare]

This is a disclosure on the contract between you and the buyer to protect the buyer from any claims that you were not informed of the rules. It has no legal standing to the underlying deed.

Thank you TK-Tampa, your explanation makes perfect sense. I have to admit we can't imagine wanting to stay at the new resorts as we love AK, but the new amendment does irk somewhat, it screams injustice

 

[drusba]

hehe ziravan... Thanks for the clarification. No, our contract is for AKV. I managed to find a copy of the AKV Declaration of Condominium online - is that the same as POS?
So far I've only read through to page 10 of 110. It's difficult to untangle the lawyer speak with my befuddled brain lol

The Declarations plus attached exhibits found online, which are the filings made with the Orange County Comptroller, are part of the POS but not all of it. The POS given to new purchasers also includes a list of definitions that apply to all the POS and not just the Declarations, some disclosure statements, a Public Offering Statement Text, and the multi-site POS.

 

[crvetter]

So I noticed this weekend that the BVTC Disclosure that used to be available under the "Important Membership Documents" section of my account on DVC has been removed. Previously it downloaded the December 2017 version of this BVTC. As far as I remember it was up there at the beginning of last week. So either they finally are getting around to posting the 1/19/19 update but not sure why that wouldn't be done yet. So they could be holding off to correct the language issue (that was corrected in the Riviera POS) or waiting until Sales of Riviera to start before posting.

Perhaps I'm wrong but I could have sworn it was available.

 

[Mumof4mice]

I had a long conversation with Yvonne Chang last week. On the 1/19 restrictions, her comments were:

1. The POS does not guarantee that DVD would build any future resort. Nor does it guarantee access to any future resort.

2. DVD could legally choose not to add Riviera and future resorts to the network, and not let anyone trade into Riviera.

3. DVC chose to grandfather all existing owners because they care about all members.

4. The trade agreement is equal. Direct buyers from both sides can trade, but resale buyers from both sides cannot trade.
Therefore the trading terms are legal; compliant with all statutes.

I asked how the trading would be facilitated. Will Riviera owners trade through BVTC like current owners? Will there be a separate trading entity? Or is trading at Riviera completely separated out from the Riviera deed and is a direct purchase perk?
Y: [circuitous argument offering no clearcut answer]

5. Y stated that it's members (rather, potential buyers?) who demand the differentiation between the products. "The incidental benefits have already be taken away. But members still ask us, what do I get more, when I buy direct? We care about all members, that's why we choose to grandfather existing members. But it's members that ask for some of these differences."

Guys, we are the problem. We necessitated further differentiation of the product by continuing to buy resale after they took Disney collection and membership extras away.

I didn't understand how it could be worth Yvonne's time to speak with each of us individually. I think I have an answer for that. They are treating these calls as surveys (I want my $25 free GC for participating!). Just as the board members are communicating and sharpening our inquiry, Yvonne is working on refining DVC's messaging.

I think the reallocations was a case of somebody deciding it'd be a "legal" way for their department to hit the 10% increase target. They didn't anticipate the backlash and quickly retracted it. They're probably looking for new work.

The 1/19 restriction was possibly a similar situation. They relied on part of the POS - no guarantee of access to any future resort - to deny everyone access. Then dish out the trading as a direct purchase perk to differentiate the product. Yvonne presented it as: "We had to, to differentiate the product. We don't want to hurt existing members". Once again they probably hadn't thought it out fully or anticipated the response from the membership.

I'm not personally upset about the restrictions - it's just business. We didn't factor in the ability to recuperate any of the initial purchase cost. So my family's not really affected. I'd even consider purchasing a few extra points at an Epcot resort.

However, regardless of our individual circumstances, everyone with an interest in the recent changes should write to DVC. I do believe that Disney places a monetary value on good will and branding. Our feedback could possibly be worth something.

 

[skier_pete]

@Mumof4mice thank you for the feedback from Yvonne. I do agree that they are likely getting something out of this - basically test balloons for how the membership feels. That said, I still do appreciate that they are indeed listening to our issues.

I was on the side that the re-allocation was stepping over the line, but I can't see how this can be considered illegal.

She's right that there are no promises with the L14 that they will ever open new resorts or ever have access to new resorts. And they are not taking away anyone's right as owners - they are taking the way the rights of future resale buyers. Yes, this is in turn reducing the value of your property when it comes to resale - but again - Disney never said to you that your timeshare would have ANY value in resale. There is definitely some affect that this will have on our ability to book within our existing resorts , but the effect on the L14 will be very minimal for a long time to come. I could see it as having a major affect at Riviera - the fact that owners won't be able to trade out will mean resort may be harder to get at 7 months than others, but again you know that going into the purchase.

The answer she gave is no surprise - they feel that they lose a lot of customers to resale. Their assumption is that the further they differentiate from resale, the more direct sales they will get. They are probably right about that. I am just not convinced they are breaking any laws here.

 

[Matty B13]

I'm kinda surprised that we haven't heard anything from any of the resale brokers about this issue, since if could end up affecting them the most with lower commission on lower priced contracts. I'm sure they don't want to burn any bridges at DVC, but I'm guessing that they would stand to loss a lot of money from this change.

 

[Mumof4mice]

@Mumof4mice thank you for the feedback from Yvonne. I do agree that they are likely getting something out of this - basically test balloons for how the membership feels. That said, I still do appreciate that they are indeed listening to our issues.

I was on the side that the re-allocation was stepping over the line, but I can't see how this can be considered illegal.

She's right that there are no promises with the L14 that they will ever open new resorts or ever have access to new resorts. And they are not taking away anyone's right as owners - they are taking the way the rights of future resale buyers. Yes, this is in turn reducing the value of your property when it comes to resale - but again - Disney never said to you that your timeshare would have ANY value in resale. There is definitely some affect that this will have on our ability to book within our existing resorts , but the effect on the L14 will be very minimal for a long time to come. I could see it as having a major affect at Riviera - the fact that owners won't be able to trade out will mean resort may be harder to get at 7 months than others, but again you know that going into the purchase.

The answer she gave is no surprise - they feel that they lose a lot of customers to resale. Their assumption is that the further they differentiate from resale, the more direct sales they will get. They are probably right about that. I am just not convinced they are breaking any laws here.

@skier_pete , I agree the restrictions are legal. I even initially thought the point reallocations had to be fully compliant with Florida statutes, until people posted their detailed calculations here.

As much as talking to Y would suggest otherwise, I believe DVC owners are better protected as timeshare consumers, dealing with Disney, than dealing with the majority of timeshare companies. Even when DVC could legally make changes, they take into account the impact on goodwill and net promoter scores etc.

I feel pretty confident whatever terms one buys in at will roughly stay the same for the duration of the ownership of that contract. It's "cheaper" for DVC to grandfather existing owners and wait for natural attrition of the owners (Y stated the sell rate is "single digit to low double digits". Probably resort and economy dependent.)

 

[ziravan]

I had a long conversation with Yvonne Chang last week. On the 1/19 restrictions, her comments were:

1. The POS does not guarantee that DVD would build any future resort. Nor does it guarantee access to any future resort.

2. DVD could legally choose not to add Riviera and future resorts to the network, and not let anyone trade into Riviera.

3. DVC chose to grandfather all existing owners because they care about all members.

4. The trade agreement is equal. Direct buyers from both sides can trade, but resale buyers from both sides cannot trade.
Therefore the trading terms are legal; compliant with all statutes.

I asked how the trading would be facilitated. Will Riviera owners trade through BVTC like current owners? Will there be a separate trading entity? Or is trading at Riviera completely separated out from the Riviera deed and is a direct purchase perk?
Y: [circuitous argument offering no clearcut answer]

5. Y stated that it's members (rather, potential buyers?) who demand the differentiation between the products. "The incidental benefits have already be taken away. But members still ask us, what do I get more, when I buy direct? We care about all members, that's why we choose to grandfather existing members. But it's members that ask for some of these differences."

Guys, we are the problem. We necessitated further differentiation of the product by continuing to buy resale after they took Disney collection and membership extras away.

I didn't understand how it could be worth Yvonne's time to speak with each of us individually. I think I have an answer for that. They are treating these calls as surveys (I want my $25 free GC for participating!). Just as the board members are communicating and sharpening our inquiry, Yvonne is working on refining DVC's messaging.

I think the reallocations was a case of somebody deciding it'd be a "legal" way for their department to hit the 10% increase target. They didn't anticipate the backlash and quickly retracted it. They're probably looking for new work.

The 1/19 restriction was possibly a similar situation. They relied on part of the POS - no guarantee of access to any future resort - to deny everyone access. Then dish out the trading as a direct purchase perk to differentiate the product. Yvonne presented it as: "We had to, to differentiate the product. We don't want to hurt existing members". Once again they probably hadn't thought it out fully or anticipated the response from the membership.

I'm not personally upset about the restrictions - it's just business. We didn't factor in the ability to recuperate any of the initial purchase cost. So my family's not really affected. I'd even consider purchasing a few extra points at an Epcot resort.

However, regardless of our individual circumstances, everyone with an interest in the recent changes should write to DVC. I do believe that Disney places a monetary value on good will and branding. Our feedback could possibly be worth something.

They can't get to parity by treating one subset of "club members" differently on both sides of the equation.

The rules in both the Florida Statute and the original POS clearly state that they have a responsibility to members as a whole to balance opportunities to book from availability in the reservation component as a whole. I think that's black and white. She tries to get around this by suggesting that resale buyers were never promised that ANY new resorts would be built, and they could just opt Riviera out completely. Both of those concepts are true enough, but feints. Resale purchases (just like every club member) weren't promised more resorts would be added, BUT TO THE EXTENT THAT THEY ARE, the rules requiring that club members be treated fairly as a whole group and that new resorts must be admitted on terms substantially similar as current resorts still applies.

My response would be, excellent: opt Riviera out. That IS one of their options. Redefining "club member" is not.

The idea that since there are resale members locked out on either side, equality could be achieved -- that is patently silly. In the next several years, far more direct contracts will be sold at Riviera, and it will take years for a resale market for Riviera to build. In the meantime, the L14 has 14x as many resorts generating resale buyers, and those resale buyers are going to dwarf the number of Riviera resale buyers going forward. And before a balance could be achieved with Riviera, a new imbalance will be created with the Reflections, in a never-ending cycle. To the extent that the 7 month window is fair game for everybody now, parity exists because nobody is deprived of whatever "first come, first served" opportunities are available at 7 months. There is no way to maintain that balance under this new scheme. The fact of the matter is that some resorts have more "trade" value than others at 7 months and Riviera owners are going to flock to those resorts at rates that will be unfair to say, BCV resale owners. Those owners might have access to 13 other resorts, but when 14, and then 15, and then 16 other resorts have access to them, and are seeking the use of BCV at higher demand on a per resort basis, the idea that they're creating an "one off", equal exchanging system is false.

THIS is why many thought this would be the start of a DVC2; because there's no way to create a balance in the system as they've explained it. And make no mistake, DVCM and BVTC have a legal and fiduciary responsibility to work to achieve that balance for club members "as a whole".

 

[Katie L]

I'm kinda surprised that we haven't heard anything from any of the resale brokers about this issue, since if could end up affecting them the most with lower commission on lower priced contracts. I'm sure they don't want to burn any bridges at DVC, but I'm guessing that they would stand to loss a lot of money from this change.

They have no benefit to discuss this in public. But I have no doubt they are discussing it privately. Just as I’m sure Yvonne (or her peers) are reading this board and discussing too.

 

[TK-Tampa]

I had a long conversation with Yvonne Chang last week. On the 1/19 restrictions, her comments were:

1. The POS does not guarantee that DVD would build any future resort. Nor does it guarantee access to any future resort.

2. DVD could legally choose not to add Riviera and future resorts to the network, and not let anyone trade into Riviera.

3. DVC chose to grandfather all existing owners because they care about all members.

4. The trade agreement is equal. Direct buyers from both sides can trade, but resale buyers from both sides cannot trade.
Therefore the trading terms are legal; compliant with all statutes.

I asked how the trading would be facilitated. Will Riviera owners trade through BVTC like current owners? Will there be a separate trading entity? Or is trading at Riviera completely separated out from the Riviera deed and is a direct purchase perk?
Y: [circuitous argument offering no clearcut answer]

5. Y stated that it's members (rather, potential buyers?) who demand the differentiation between the products. "The incidental benefits have already be taken away. But members still ask us, what do I get more, when I buy direct? We care about all members, that's why we choose to grandfather existing members. But it's members that ask for some of these differences."

Guys, we are the problem. We necessitated further differentiation of the product by continuing to buy resale after they took Disney collection and membership extras away.

I didn't understand how it could be worth Yvonne's time to speak with each of us individually. I think I have an answer for that. They are treating these calls as surveys (I want my $25 free GC for participating!). Just as the board members are communicating and sharpening our inquiry, Yvonne is working on refining DVC's messaging.

I think the reallocations was a case of somebody deciding it'd be a "legal" way for their department to hit the 10% increase target. They didn't anticipate the backlash and quickly retracted it. They're probably looking for new work.

The 1/19 restriction was possibly a similar situation. They relied on part of the POS - no guarantee of access to any future resort - to deny everyone access. Then dish out the trading as a direct purchase perk to differentiate the product. Yvonne presented it as: "We had to, to differentiate the product. We don't want to hurt existing members". Once again they probably hadn't thought it out fully or anticipated the response from the membership.

I'm not personally upset about the restrictions - it's just business. We didn't factor in the ability to recuperate any of the initial purchase cost. So my family's not really affected. I'd even consider purchasing a few extra points at an Epcot resort.

However, regardless of our individual circumstances, everyone with an interest in the recent changes should write to DVC. I do believe that Disney places a monetary value on good will and branding. Our feedback could possibly be worth something.

Thank you for posting this. Who is Yvonne and how does one contact her?

Her statement that it is equal ignores the fact that all owners have equal standing, not those that Disney arbitrarily deems not to.

And of course the new buyers would object to paying $225 per point when points for $55 are available on the open market (Vero).

And I will restate something I mentioned in one of my earlier posts. When there is an imbalance of points - that is, when one group of owners cannot use them because another group has been given access, as is happening here, Disney gets to use those points to sell for their own profit.

I am wondering if Disney has taken a calculated risk that the vast majority of the owners won't care or fully understand what they are doing for many years down the road. Or perhaps they have so much hubris that they actually believe that what they are doing and saying is ethical and legal. I no longer believe that Disney cares about goodwill. They only care about selling new resorts at a huge profit. The rightful owners are simply an annoyance to them that will only slow down their efforts to make more profits.

I wake up every day thinking that Disney will finally admit that what they are doing is completely wrong and admit all owners have equal standing. But this post makes me think that they are assuming that no one has the balls or cash to take them to court. And until someone does and actually proves fhey cannot create additional classes of owners, they are going full ahead.

 

[TK-Tampa]

They can't get to parity by treating one subset of "club members" differently on both sides of the equation.

The rules in both the Florida Statute and the original POS clearly state that they have a responsibility to members as a whole to balance opportunities to book from availability in the reservation component as a whole. I think that's black and white. She tries to get around this by suggesting that resale buyers were never promised that ANY new resorts would be built, and they could just opt Riviera out completely. Both of those concepts are true enough, but feints. Resale purchases (just like every club member) weren't promised more resorts would be added, BUT TO THE EXTENT THAT THEY ARE, the rules requiring that club members be treated fairly as a whole group and that new resorts must be admitted on terms substantially similar as current resorts still applies.

My response would be, excellent: opt Riviera out. That IS one of their options. Redefining "club member" is not.

The idea that since there are resale members locked out on either side, equality could be achieved -- that is patently silly. In the next several years, far more direct contracts will be sold at Riviera, and it will take years for a resale market for Riviera to build. In the meantime, the L14 has 14x as many resorts generating resale buyers, and those resale buyers are going to dwarf the number of Riviera resale buyers going forward. And before a balance could be achieved with Riviera, a new imbalance will be created with the Reflections, in a never-ending cycle. To the extent that the 7 month window is fair game for everybody now, parity exists because nobody is deprived of whatever "first come, first served" opportunities are available at 7 months. There is no way to maintain that balance under this new scheme. The fact of the matter is that some resorts have more "trade" value than others at 7 months and Riviera owners are going to flock to those resorts at rates that will be unfair to say, BCV resale owners. Those owners might have access to 13 other resorts, but when 14, and then 15, and then 16 other resorts have access to them, and are seeking the use of BCV at higher demand on a per resort basis, the idea that they're creating an "one off", equal exchanging system is false.

THIS is why many thought this would be the start of a DVC2; because there's no way to create a balance in the system as they've explained it. And make no mistake, DVCM and BVTC have a legal and fiduciary responsibility to work to achieve that balance for club members "as a whole".

Thanks for stating this so succinctly. I fully agree and was trying to say the same thing - then read your comments and no longer need to.

 

[Mousewerks]

I had a long conversation with Yvonne Chang last week. On the 1/19 restrictions, her comments were:

1. The POS does not guarantee that DVD would build any future resort. Nor does it guarantee access to any future resort.

2. DVD could legally choose not to add Riviera and future resorts to the network, and not let anyone trade into Riviera.

3. DVC chose to grandfather all existing owners because they care about all members.

4. The trade agreement is equal. Direct buyers from both sides can trade, but resale buyers from both sides cannot trade.
Therefore the trading terms are legal; compliant with all statutes.

Thank you so much for this conversation.

1 and 2 I agree with.

For 3 I have to say they spoke incorrectly. They should have said "We chose to add Riviera to the DVC club thereby giving all members of that club access to the resort".

By saying it that way, it shines a bright light on how incorrect number 4 is. It is a resort-level deal, not a member-level deal. Therefore they cannot differentiate between contracts. And this is where I believe they are contravening the law.

I asked how the trading would be facilitated. Will Riviera owners trade through BVTC like current owners? Will there be a separate trading entity? Or is trading at Riviera completely separated out from the Riviera deed and is a direct purchase perk?
Y: [circuitous argument offering no clearcut answer]

5. Y stated that it's members (rather, potential buyers?) who demand the differentiation between the products. "The incidental benefits have already be taken away. But members still ask us, what do I get more, when I buy direct? We care about all members, that's why we choose to grandfather existing members. But it's members that ask for some of these differences."

Guys, we are the problem. We necessitated further differentiation of the product by continuing to buy resale after they took Disney collection and membership extras away.

They have created this problem as I have explained before. They set this whole system up to not be able to differentiate between single-purchase contracts and those that have been purchased more than once. They further exploded the number of contracts with no consideration to the ramifications of this. That they are hearing from whiners who claim they want more than simply a cheaper place to stay is entirely a problem of their own making. They need to figure out how to ameliorate those people without contravening the resort club known as DVC.


Thanks again for reporting on your discussion with Yvonne. I will spend some time working up a detailed letter to DVC with my concerns. Full disclosure, I am a resale-only purchaser who purchased before all these "restrictions" came into being so I am not being affected by this. Given the research that drusba made on the POS, I think it behooves all of us to write to Yvonne explaining how they are ignoring previous POS.

 

[Mousewerks]

And contrary to the argument that is usually used to support the decision I don't believe for a second that every resale purchase would have been a direct purchase. I'm not even convinced that the majority would have otherwise provided a direct purchase.

And what seems to be lost in that argument is that DISNEY has ROFR! Thus they can make any contract 'new' again and sell it as new. So this argument holds exactly zero water IMHO.

 

[Mumof4mice]

Thank you for posting this. Who is Yvonne and how does one contact her?

Yvonne Chang is the director of club management and regulatory affairs. I emailed:
Members@disneyvacationclub.com

And received an email from her assistant after a few days.

 

[KAT4DISNEY]

Thank you for posting this. Who is Yvonne and how does one contact her?

She holds positions within both DVD and DVCM.

 

[Wakey]

My personal view, as highlighted succinctly in the legal analysis by both Drusba and Zirvan, is that this appears to be a breach of the fiduciary duties owed to club members, but obviously it is going to take a lawyer to challenge it. Probably one pointed in the right direction, specialist in timeshare who would do it on a class action contingency basis.

 

[TK-Tampa]

My personal view, as highlighted succinctly in the legal analysis by both Drusba and Zirvan, is that this appears to be a breach of the fiduciary duties owed to club members, but obviously it is going to take a lawyer to challenge it. Probably one pointed in the right direction, specialist in timeshare who would do it on a class action contingency basis.

I am not a legal expert, but I fear it is going to be difficult to get class action status right away. No owner will actually be harmed until a new non-preferred owner is denied the opportunity to book the Riviera. When the booking window opens, there may only be a few hundred owners affected.

The current best course of action may be to press the government regulators.

But there is another thing here that boggles my mind - I am certain that if Disney actually brings Riviera into to Club, they will be in violation of the POS and likely Florida state statutes. They are fully aware of this. After only a few years, there will likely be thousands of non-preferred owners harmed and losing a lawsuit to correct this will likely bring another suit against them from the Riviera owners who were lead to believe they were 'special'.

From what I can see so far, Disney's defense is only 1) they have the right to make changes to benefit the owners as a whole; and 2) All non-preferred owners were given proper notice of the restriction and therefore, have no standing against them. Neither of which is strong.

This seems like a really bad business move on their part. Are they so desperate to have Rivieria and Reflections paid for by selling shares that they dont care about the long-term negative consequences?

Maybe their thinking is that settlling a lawsuit 3-5 years from now will ultimately be more profitable than excluding Riviera from the pool.

For example, if Riviera sells out in a few years, they will recoup their cost and make potential profits in the 100's of millions. Legal settlements could be in the low thousands of dollars for each of several hundred owners that can prove they were denied booking that resort in the 7 month window. How many of those owners will really press for it? Thus, they may be estimating their potential liability from a legal challenge to be in the low millions versus a much bigger profit by being able to sell out faster.

In other words, if making this announcement gives them the ability to sell Riviera at $25 more per point, that would bring in an additional $75 million in profit when completely sold. If they estimate that their liability will be $10 million, then this announcement, even if deemed unenforceable at some point, will be a huge money maker for them.

Maybe what I originally thought was a dumb business move is really a brilliant one on their part.

 

[Mousewerks]

I am not a legal expert, but I fear it is going to be difficult to get class action status right away. No owner will actually be harmed until a new non-preferred owner is denied the opportunity to book the Riviera. When the booking window opens, there may only be a few hundred owners affected.

The current best course of action may be to press the government regulators.

But there is another thing here that boggles my mind - I am certain that if Disney actually brings Riviera into to Club, they will be in violation of the POS and likely Florida state statutes. They are fully aware of this. After only a few years, there will likely be thousands of non-preferred owners harmed and losing a lawsuit to correct this will likely bring another suit against them from the Riviera owners who were lead to believe they were 'special'.

From what I can see so far, Disney's defense is only 1) they have the right to make changes to benefit the owners as a whole; and 2) All non-preferred owners were given proper notice of the restriction and therefore, have no standing against them. Neither of which is strong.

This seems like a really bad business move on their part. Are they so desperate to have Rivieria and Reflections paid for by selling shares that they dont care about the long-term negative consequences?

I'm right there with you on the confusion. They have never had a problem selling shares in any other resort, why such concern for it now? And why is it that they have taken a position which quite clearly harms a subsection of the membership? It's like they have someone who is actively against the membership on the management team.

 

[Katie L]

I'm right there with you on the confusion. They have never had a problem selling shares in any other resort, why such concern for it now? And why is it that they have taken a position which quite clearly harms a subsection of the membership? It's like they have someone who is actively against the membership on the management team.

They've pushed prices incredibly high in the last few years. Demand has not slowed. I think they're just testing how high they can push profits. And if they hike direct points to $200++ all the sudden resale becomes much more desirable. I'd love to do MM and have access to Epcot lounge and cheaper APs - but I'm not going to pay a $10k+ premium for that. I really feel that they've stopped caring as much about providing that amazing experience - coasting on folks memories (I'm GUILTY!) and just pushing profits. It's the goodwill that they are eroding. And it makes me sad.