Multi-Site POS Revision Dated 01/19/19

[LAX]

Or, at least it could 'set a floor' price for Riviera Resales, and people would know that 'at least they could pay to play,' that is, until Dirty Disney decides to change the rules again. After all, they can do ANYTHING they want. Right?

That's what it appears to be the case, right now, and what concerns me. For the time being, we can at least count on renting out points should resale value end up tanking. However, what's preventing DD ("Dirty Disney") from dropping the axe on renting, too? I really need to think about dumping my contract before my exit strategy gets thrown out the window.

LAX

 

[ziravan]

That's what it appears to be the case, right now, and what concerns me. For the time being, we can at least count on renting out points should resale value end up tanking. However, what's preventing DD ("Dirty Disney") from dropping the axe on renting, too. I really need to think about dumping my contract before my exit strategy gets thrown out the window.

LAX

I’m fairly certain that Florida State Law prohibits timeshare companies from banning rentals.

After all, if it’s my deeded property, who I allow to use it is nunya.

 

[crvetter]

I’m fairly certain that Florida State Law prohibits timeshare companies from banning rentals.

After all, if it’s my deeded property, who I allow to use it is nunya.

I'm not entirely sure that is true from the stand point of it being deeded property, only. There are condo and home owner associations that have out right banned Renting of the units. I have seen this both in Florida, Illinois, California, and Pennsylvania where the HOA have their declarations of the association banning rentals to some degrees or in total. I've even seen HOA's amend their declarations to ban/limit renting (not just at the creation of the HOA), though a condo/home HOA has more difficult rules in the declarations to amend much more difficult that what DVC has to do to amend, per our POS.

Perhaps timeshares in Florida are special and unlike Condos/Homes are afforded a protection from rental restrictions; though my quick skim through of Chapter 721 did find a reference to limitations being allowed. With that being said, what stops DVC from saying if you were to rent, you could only rent out your Home Resort and have no rights to rent at other resorts. Because the Resort Agreement, where your right to the DVC Reservation Component is defined, isn't protected under fiduciary protections (modified by BVTC with no input from DVCMC or club members).

As for the Membership Agreements at the Resorts already have a section, 7.2, that states DVCMC could amend the Membership Agreement that would adversely effect your ability to rent:

"...These changes may affect an Owner's right to use, exchange and rent the Owner's Ownership Interest and impose obligations upon the use and enjoyment of the Ownership Interest and the appurtenant Club membership...."

And it doesn't explicitly guarantee any amendments be in the best interest of Members, only saying they are bound to do so as law requires (which Federal law is weak/non-existent on this point not sure what Florida's status is):

"...Further, although DVCM generally is required to make such changes in a manner which, in its reasonable business judgment, improves upon the quality and operation of the Vacation Ownership Plan and furthers the collective enjoyment of its benefits by the Club Members taken as a whole..."

I don't agree with this change but my experience with deeded property having bans (HOA's for condos and homes) and the fact that DVCMC can amend the Membership Agreement (with it already stating amendments could adversely effect your right to rent) lead me to believe it isn't a 0% probability. Do we actually know the Florida law that protects Timeshares?

 

[LAX]

I’m fairly certain that Florida State Law prohibits timeshare companies from banning rentals.

After all, if it’s my deeded property, who I allow to use it is nunya.

I know nothing about FL state law and I am hoping that's the case. Is the latest resale restriction allowable by FL state law? From what I understand, DVD/DD unilaterally changed languages on different agreements to benefit them. I can't help but wonder what else is coming.

LAX

 

[KAT4DISNEY]

I'm not entirely sure that is true from the stand point of it being deeded property, only. There are condo and home owner associations that have out right banned Renting of the units. I have seen this both in Florida, Illinois, California, and Pennsylvania where the HOA have their declarations of the association banning rentals to some degrees or in total. I've even seen HOA's amend their declarations to ban/limit renting (not just at the creation of the HOA), though a condo/home HOA has more difficult rules in the declarations to amend much more difficult that what DVC has to do to amend, per our POS.

Perhaps timeshares in Florida are special and unlike Condos/Homes are afforded a protection from rental restrictions; though my quick skim through of Chapter 721 did find a reference to limitations being allowed. With that being said, what stops DVC from saying if you were to rent, you could only rent out your Home Resort and have no rights to rent at other resorts. Because the Resort Agreement, where your right to the DVC Reservation Component is defined, isn't protected under fiduciary protections (modified by BVTC with no input from DVCMC or club members).

As for the Membership Agreements at the Resorts already have a section, 7.2, that states DVCMC could amend the Membership Agreement that would adversely effect your ability to rent:

"...These changes may affect an Owner's right to use, exchange and rent the Owner's Ownership Interest and impose obligations upon the use and enjoyment of the Ownership Interest and the appurtenant Club membership...."

And it doesn't explicitly guarantee any amendments be in the best interest of Members, only saying they are bound to do so as law requires (which Federal law is weak/non-existent on this point not sure what Florida's status is):

"...Further, although DVCM generally is required to make such changes in a manner which, in its reasonable business judgment, improves upon the quality and operation of the Vacation Ownership Plan and furthers the collective enjoyment of its benefits by the Club Members taken as a whole..."

I don't agree with this change but my experience with deeded property having bans (HOA's for condos and homes) and the fact that DVCMC can amend the Membership Agreement (with it already stating amendments could adversely effect your right to rent) lead me to believe it isn't a 0% probability. Do we actually know the Florida law that protects Timeshares?

Regarding rentals the main things is that DVC themselves are the largest owner and renter of points.

II can't help but wonder what else is coming.

LAX

It seems they are taking to heart what I always called the "last sentence" of the POS. "Now that you've read all of this we want you to know that we retain all rights to change anything anything or everything that you just read".

(It's not the actual quote but that's the gist of what they state)

 

[LAX]

Regarding rentals the main things is that DVC themselves are the largest owner and renter of points.



It seems they are taking to heart what I always called the "last sentence" of the POS. "Now that you've read all of this we want you to know that we retain all rights to change anything anything or everything that you just read".

(It's not the actual quote but that's the gist of what they state)

The way DVD "rents" its points is different from how we, "little potatoes", do it. If I understand the process correctly, the points DVD owns reserve the inventory to be booked with cash. I don't think points ever enter into the picture. Thus, it would be very easy for DVD to a stop on other owners from renting while it continues to do so. That's not to mention that DVD/DD can always change the rules however it sees fit, including banning renting while it continues to do so. I have completely lost faith in DVC, to be honest. Now it's really a matter of when I should sell my contract, not if.

LAX

 

[KAT4DISNEY]

The way DVD "rents" its points is different from how we, "little potatoes", do it. If I understand the process correctly, the points DVD owns reserve the inventory to be booked with cash. I don't think points ever enter into the picture. Thus, it would be very easy for DVD to a stop on other owners from renting while it continues to do so. That's not to mention that DVD/DD can always change the rules however it sees fit, including banning renting while it continues to do so. I have completely lost faith in DVC, to be honest. Now it's really a matter of when I should sell my contract, not if.

LAX

DVC owns points just like we do. We also technically rent out reservations just like they do. The other part they play is to rent out reservations that pay for trades that members have made. Points are the underlying basis for that also but wouldn’t apply to being an owner and renting out.

We also own pieces of the resort that are represented by points.

 

[crvetter]

Regarding rentals the main things is that DVC themselves are the largest owner and renter of points.

That is true but they probably could restrict owners even considering that. They have different classes and rules for their points already compared to us in the POS so I wouldn’t say that is stopping them. They already have stated for instance none of the resale restrictions apply to the points that DVD or DVC may repurchase.

I’ve seen condos say the HOA can rent any units they own but the owners aren’t allowed. Though that was in Illinois.

 

[LAX]

That is true but they probably could restrict owners even considering that. They have different classes and rules for their points already compared to us in the POS so I wouldn’t say that is stopping them. They already have stated for instance none of the resale restrictions apply to the points that DVD or DVC may repurchase.

I’ve seen condos say the HOA can rent any units they own but the owners aren’t allowed. Though that was in Illinois.

That was kind of my point. DVD plays with a different set of rules (if there are any rules at all). It would be very easy for DVD/DD to restrict us from doing something (ie: renting, booking, or whatever else it wishes) that doesn't apply to them at all. It appears (at least to me) that DVD/DD can pretty much do anything it wants to increase profit. All it takes is rewriting the agreements under the disguise of benefiting the membership, whether we like it or not.

LAX

 

[drusba]

I’m fairly certain that Florida State Law prohibits timeshare companies from banning rentals.

After all, if it’s my deeded property, who I allow to use it is nunya.

The declarations expressly allow rentals. Under Florida Law, that right given in the declarations cannot be amended as to an existing owner absent the consent of that owner. Fl. Stats §718.110(13). Thus, any amendment to the declarations to prohibit rentals by existing owners would essentially require a unanimous vote of the existing members. However, the right to rent of future owners may be taken away if the amendment is made before they purchase. Id.

In other words, we should expect a future change taking away the right to rent for future resale contracts. Moreover, under DVD's new found power to effect major changes to rights spelled out in the POS documents, including the declarations, by simply having DVCMC or BVTC make contractual changes to the DVC Membership Agreement or DVC Resort Agreement, we should also expect DVD to make that change by having DVCMC modify the DVC Membership Agreement rather than going through the amendment process of the declarations, since such a major change to the declarations would actually require a majority vote of the members. As to the statute, DVD would just claim it has done nothing to actually change the terms of the declarations and thus the statute does not apply.

 

[TK-Tampa]

That was kind of my point. DVD plays with a different set of rules (if there are any rules at all). It would be very easy for DVD/DD to restrict us from doing something (ie: renting, booking, or whatever else it wishes) that doesn't apply to them at all. It appears (at least to me) that DVD/DD can pretty much do anything it wants to increase profit. All it takes is rewriting the agreements under the disguise of benefiting the membership, whether we like it or not.

I appears that is what they are saying. That they can do whatever they want any time they want. The only thing that is guaranteed is that owners will be forced to pay their share of the maintenance fees whether or not they can actually use the resort due to DD giving their preferred customers priority over non-preferred owners. But anything else is in their power since they control the reservation system.

 

[Aron1012]

I finally received a call back today from Disney following up to my call last Tuesday where the lady said the majority of my questions needed to go to the compliance department. Today's call was just to setup an appointment for a call this Friday with Yvonne at 1:00pm. If anyone has any specific questions they would like me to ask I would be glad to add those to my list. I certainly intend to focus primarily on the resale restrictions as that was the point of my original email. Though I do intend to mention the 2020 points chart/lock-off premium issue and the recent UY amendment, as they also relate to this new approach that DVC is pushing the envelope in their ability to change the rules for their benefit.

 

[crvetter]

I finally received a call back today from Disney following up to my call last Tuesday where the lady said the majority of my questions needed to go to the compliance department. Today's call was just to setup an appointment for a call this Friday with Yvonne at 1:00pm. If anyone has any specific questions they would like me to ask I would be glad to add those to my list. I certainly intend to focus primarily on the resale restrictions as that was the point of my original email. Though I do intend to mention the 2020 points chart/lock-off premium issue and the recent UY amendment, as they also relate to this new approach that DVC is pushing the envelope in their ability to change the rules for their benefit.

I would like to offer that I agree the Resale Restriction changes were a negative for all owners while the UY amendment is not (really harms no one). Though perhaps, as you suggested, they are just showing a desire to amend the documents, which they previously did very little of. Just wanted to throw it out there, that yes the UY amendment shows them flexing the ability, but doesn't harm members (might even increase resale prices since they can just ROFR all the cheap contracts with no consideration on UY). So I'm just more concerned about the flexing their power and coupled with the resale restrictions what else they might try. But viewed in solitary they UY amendment isn't bad and is probably best for the membership. Personally I feel both were legal because we did sign contracts that allowed them to modify the agreements, which is all the changes did. But I feel it was a disservice to the membership and opposite of their spin, which was my main point.

I've already spoken (prior to the UY amendment) to Yvonne, multiple times, about the resale restrictions and about the 2020 point charts (prior to them being overturned). So I won't likely follow up on this point with her but thank you for being another voice.

 

[ljmiii]

I certainly intend to focus primarily on the resale restrictions as that was the point of my original email...

I'm not a lawyer though have read many a contract to find issues for my company's lawyers to investigate. That said...

I understand how they can build a new resort, Riviera, that doesn't allow resale buyers of the 'original 14' to use their DVC points to stay there. And I can understand how they can build a new resort the resale owners of which can not stay at any other resort. What I can't find is any reading of the DVC documents that then allow them to do those two things and also allow direct Riviera owners to stay at any of the 'original 14'.

It isn't that any one or two of them 'break' the agreements...it's all three together.

 

[crvetter]

I'm not a lawyer though have read many a contract to find issues for my company's lawyers to investigate. That said...

I understand how they can build a new resort, Riviera, that doesn't allow resale buyers of the 'original 14' to use their DVC points to stay there. And I can understand how they can build a new resort the resale owners of which can not stay at any other resort. What I can't find is any reading of the DVC documents that then allow them to do those two things and also allow direct Riviera owners to stay at any of the 'original 14'.

It isn't that any one or two of them 'break' the agreements...it's all three together.

You are missing a fourth piece which is they allowed direct buyers of the "original 14" to stay at Riviera. It was 4 sets of rules

1) Resale Original 14 after 1/19/19 can't stay at Riviera
2) Resale Riviera can only stay at Riviera
3) Direct Riviera can stay at Original 14.
4) Resale Original 14 owned before 1/19/19 or Direct can stay at Riviera

I am curious though how you could see it being legal if they did #1 or #2 individually (or together?) but lumping all 1-3 together wasn't? I saw it as a modification of the Disclosure Document that dictated our rights as Club Members. They simply defined the four sets of rules above, which they legally were allowed to do because we gave that right to BVTC to modify the Disclosure Document as they pleased. Some feel admitting Riviera to the club at all was a violation of our DVC Resort Agreements because it contains the restrictions on resale purchasers; therefore, Riviera's Resort Agreement is substantially different. My feelings here are while the Resort Agreement says it must be "substantially" similar to admit a new resort it also says that they may admit a new resort under their own Terms and Conditions, which I would say the Resale Restrictions fall under so keeping it still substantially similar since it just defined terms and conditions of admittance to the club. So Riviera is restricted by its Resort Agreement and the Disclosure Document and the Original 14 are restricted by the Disclosure Document, which likely why the resales at the Original 14 can trade in and out of each other always (since their Resort Agreements allowed access to all existing resorts and future resorts subject to their terms and conditions, which never existed for the old so harder to add to the existing resorts. But admitting Riviera is admitting it with its terms and conditions, which our Resort Agreements allowed).

The only thing that stands out, to me, is this "In making a decision to associate additional DVC Resorts, BVTC shall use its commercially reasonable efforts, in good faith and based upon all available evidence under the circumstances, to further the best interests of the Club Members taken as a whole with respect to the Club Members' opportunity to use and enjoy all of the Vacation Homes and related facilities made available through the DVC Reservation Component." Though perhaps this is a point to make? Does this 1 sentence in the Resort Agreement 6.2(b) get violated by the resale restriction? Enough member feedback saying members aren't happy with the change, legality aside, would perhaps get them to reverse course (either by removing Riviera, unlikely since it is selling already, or removing the restrictions).

 

[ljmiii]

You are missing a fourth piece which is they allowed direct buyers of the "original 14" to stay at Riviera. It was 4 sets of rules

1) Resale Original 14 after 1/19/19 can't stay at Riviera
2) Resale Riviera can only stay at Riviera
3) Direct Riviera can stay at Original 14.
4) Resale Original 14 owned before 1/19/19 or Direct can stay at Riviera

I am curious though how you could see it being legal if they did #1 or #2 individually (or together?) but lumping all 1-3 together wasn't?...

Because in the Original 14 "Club Members" doesn't distinguish between direct and resale owners. DVD was free to create a new club (starting with Riviera) that did distinguish between the two types of owners. From that they could allow owners of both clubs to trade between each other and only allow direct owners of the new club to trade into the old club (2 & 3). Or not allow Riviera to trade into the 'original 14' and visa versa (1 & 2). But that isn't how DVD decided to play this.

Instead DVD have taken the position that they can ride roughshod over their BVTC obligations and rewrite whatever they wish since they 'hold the pen'. Which while oft attempted doesn't have the best success rate in litigation. Theoretically, I suppose someone could try to sue today for their failure to operate in good faith. But I think a court would better accept the standing of an Original 14 owner who bought after 1/19/19 and was denied the ability to make a reservation at Riviera. Ideally after a direct (or pre-1/19/19 resale) owner of the 'Original 14' succeeded and a Riviera owner had made a reservation at one of the Original 14.

 

[crvetter]

Because in the Original 14 "Club Members" doesn't distinguish between direct and resale owners. DVD was free to create a new club (starting with Riviera) that did distinguish between the two types of owners. From that they could allow owners of both clubs to trade between each other and only allow direct owners of the new club to trade into the old club (2 & 3). Or not allow Riviera to trade into the 'original 14' and visa versa (1 & 2). But that isn't how DVD decided to play this.

Instead DVD have taken the position that they can ride roughshod over their BVTC obligations and rewrite whatever they wish since they 'hold the pen'. Which while oft attempted doesn't have the best success rate in litigation. Theoretically, I suppose someone could try to sue today for their failure to operate in good faith. But I think a court would better accept the standing of an Original 14 owner who bought after 1/19/19 and was denied the ability to make a reservation at Riviera. Ideally after a direct (or pre-1/19/19 resale) owner of the 'Original 14' succeeded and a Riviera owner had made a reservation at one of the Original 14.

Understood, though I guess we mainly differ on did the lack of distinguishing resale and direct protect us from ever doing so. I would argue no, since it did say new resorts could have their own terms and conditions and the Disclosure Document could be amended.

Ideally DVC reverts the change and does what has worked well vs what they are are allowed to do. Currently they hide behind we are allowed to do it and members want this. If we show them not all members want it (direct and resale) that might be the best option as I think they vetted it already, seems less sloppy than the 2020 point charts. Hopefully enough feedback, especially direct buyers who they claim are asking for it, start making comments and questioning it.

 

[CraigInPA]

My issue is with BVTC accepting a set of rules for Riviera's trading that prevents certain classes of "members" of L14 resorts from trading into Riviera. That devalues L14 member's contracts, both those who are restricted, and those whose contracts will eventually be sold with restrictions.

 

[Frederic Civish]

Isn't the option to book your non-home resort a guarantee on the old L14 contracts?

If their intention is to kill the resale market then the only way IMO is to offer real, significant perks to direct buyers. Perks that make you think that over the next 20 years the price difference won't be significant. Park discounts, longer FP+ window, longer ADR window. And only give the perks to those who purchase the majority of their points directly.

Good ideas, but complicated by the fact that those perks require consent/cooperation with other WDW divisions whose priorities are different. Longer FP and ADR windows are probably easier to negotiate than park discounts that reduce revenue for the Parks division, but DVD would most likely need to develop perks that they could control and ensure continuity.

I agree that if they REALLY want to differentiate their Direct Sales from Resales, that their best option really is to increase the value of Direct by increased perks specifically tailored to them. Yes, I understand they can't just hand out discounts. They need to do things without impacting the profits of the other divisions, and they cannot just change policies as they desire, when those policies have been set by the other divisions. But I don't think it would take much in the way of perks to swing the sales balance in their direction. The biggest thing they really should do is create the belief in the minds of their Direct purchasers that those Direct purchasers are getting a special deal, with special benefits and special value.

Here are some suggestions that I think are reasonable, and not too expensive:

1. Give a ONE YEAR Annual Pass to the purchasers, once, for every 50 or every 100 points that they purchase.

2. Let Direct Purchasers have 1 extra FastPass per day, per person who is staying in their unit. (So they could have 4 instead of 3 per day.) Preferably in perpetuity, but at least for 5 years.

3. Allow Direct Purchasers to get their FastPasses one week early, while they own the contract.

4. Allow Direct Purchasers to make Dining Reservations one week early, while they own the contract.

5. Give Direct DVC Purchasers one free 12 ounce bottle of water per day, for each person staying in the unit. They could easily provide this by having the DVC Owners go by the Reception area and show their Magic Bands and pick them up. What does a bottle of water cost? 5 cents?

6. Every year, send the Direct Purchasers a T-Shirt (or something similar that people would see) that says, "I purchased DVC Riviera from Disney. It's mu home." (increase Membership fees for Riviera by $10 per year to cover this.)

I think there are a number of other Perks that would make people happy, make people feel that they got a great deal, and make people want to Buy Direct, because it makes them feel special. I don't think it would take much for people to choose Direct over Resales, if Disney did that.

 

[Frederic Civish]

The declarations expressly allow rentals. Under Florida Law, that right given in the declarations cannot be amended as to an existing owner absent the consent of that owner. Fl. Stats §718.110(13). Thus, any amendment to the declarations to prohibit rentals by existing owners would essentially require a unanimous vote of the existing members. However, the right to rent of future owners may be taken away if the amendment is made before they purchase. Id.

In other words, we should expect a future change taking away the right to rent for future resale contracts. Moreover, under DVD's new found power to effect major changes to rights spelled out in the POS documents, including the declarations, by simply having DVCMC or BVTC make contractual changes to the DVC Membership Agreement or DVC Resort Agreement, we should also expect DVD to make that change by having DVCMC modify the DVC Membership Agreement rather than going through the amendment process of the declarations, since such a major change to the declarations would actually require a majority vote of the members. As to the statute, DVD would just claim it has done nothing to actually change the terms of the declarations and thus the statute does not apply.

I appears that is what they are saying. That they can do whatever they want any time they want. The only thing that is guaranteed is that owners will be forced to pay their share of the maintenance fees whether or not they can actually use the resort due to DD giving their preferred customers priority over non-preferred owners. But anything else is in their power since they control the reservation system.

And if that is the case, then we can feel free to sue them any time we want. Dirty Disney, the Sewer Rat.