Official Thread - New commercial use policy published 03/31

[DonMacGregor]

So far, I’ll say this: I’m truly baffled by the fixation with 20 reservations. I feel like I’m watching Spinal Tap but instead of “This one goes to eleven”, it’s “But I don’t have 20 reservations so I’m good”. The collective rationalization is fascinating. It here, and it’s in every Facebook post I’ve seen.

As I pointed out earlier, the 20 reservation threshold is just ONE of five examples given that management could conclude constitutes a commercial enterprise, and it’s not even the first given (its number 4) and that list isn’t even exhaustive. Any single one of the examples given could be, as is specifically stated in the language, at their discretion, enough to constitute a commercial enterprise.

3. Policy Regarding Use of Vacation Homes for Commercial Purposes: "Commercial purposes" includes a pattern of rental activity or other occupancy by an Owner (other than DVD and its affiliates) that the Board and/or Disney Vacation Club Management, LLC (the "Management Company"), in its reasonable discretion, could conclude constitutes a commercial enterprise or practice.

Without limiting the discretion of the Board and Management Company, the Board and/or Management Company may reasonably conclude that an Owner is using or occupying Vacation Ownership Interests and/or Vacation Homes for commercial purposes based on any one or more of the following activities (which are a non-exhaustive list of examples and without limiting any other possible factors):

• A majority of reservations made by an Owner or individuals identified in the Management Company's system of record as an "associate" or an "affiliate" ("Associate"), or a majority of the aggregate Vacation Points or Ownership Points (as applicable; "Points") owned or controlled by an Owner (which may take into account all Points owned or controlled by an Owner across all Resorts at any given time), in either case, are used by individuals or entities other than the named Owner or Associate, regardless of whether the Owner or Associate is listed as a named guest on the reservation. As used herein "controlled by an Owner" shall include all Points that an Owner possesses discretion and authority to utilize, which authority may be proxy, power of attorney, or other permission from another Owner; or
• A majority of reservations or Points owned or controlled by an Owner (which may take into account all Points owned or controlled by an Owner across all Resorts at any given time) are made or used respectively at Resorts with overlapping room types and/or dates, regardless of whether the Owner or Associate is named as a guest on said reservations; or
• Regular advertising by an Owner, Associate, or someone else at the direction of an Owner (such as an employee, principal, officer, director, contractor, or agent acting on behalf of an Owner; collectively
  "Owner Agent") of the availability of Vacation Ownership Interests and/or Vacation Homes for rental, including but not limited to use of a dedicated website, social media account, page, post, third-party service provider, or on any other media or platform now known or hereafter devised; or
• In any 12-month period more than 20 reservations are made by an Owner and/or its Associate (which may take into account all Points owned or controlled by an Owner across all Resorts at any given time) and a majority of such reservations are not used by the named Owner or Associate; or
• An Owner, Associate, or Owner Agent conducts photography, videotaping, or recording on Resort property that is used to market the availability of Vacation Ownership Interests and/or Vacation Homes for rental activity.

Plus, the first two bullet points that reference a “majority of reservations” also include the language “or points”. Something else people seem to conveniently overlook or ignore. So, a member could arguably have just one or two rentals per year, but if those rentals represent 51% of the points owned by the member, they could be in violation of the commercial renting policy.

Honestly though, as long as your total number of rental reservations are equal to or less than the square root of 20, times Planck’s Constant, you should be ok.

 

[DonMacGregor]

FWIW, I chatted with a friend of mine who rents out the majority of his 300 points every year and he said the main impact will be that he will not do small point rentals.

He may want to re-read this part:

A majority of reservations made by an Owner or individuals identified in the Management Company's system of record as an "associate" or an "affiliate" ("Associate"), or a majority of the aggregate Vacation Points or Ownership Points (as applicable; "Points") owned or controlled by an Owner (which may take into account all Points owned or controlled by an Owner across all Resorts at any given time), in either case, are used by individuals or entities other than the named Owner or Associate, regardless of whether the Owner or Associate is listed as a named guest on the reservation. As used herein "controlled by an Owner" shall include all Points that an Owner possesses discretion and authority to utilize, which authority may be proxy, power of attorney, or other permission from another Owner;

 

[Cyberc1978]

Prior to the updated policy, DVC themselves, based on enforcement and what owners were told, they did indeed allow people to have all 20 be in the names of others.

That is why I think this updated policy is more specific because DVC has decided they want to enforce differently .

Because the old 2011 policy said enforcement didn’t kick in until after 20, and DVC only acted when above 20, the implication was it didn’t matter.

Now, this new policy is clearer of DVCs intent..and why I mentioned earlier, what I was always advised,,,that written policy matters and that if they want to enforce the policy language needs to be clear….IMO, that is a big reason why this is now as detailed as it is for owners.

While it still gives DVC discretion when evaluating at the individual owner level, it gives pretty specific examples of what triggers things and all the potential consequences that can occur.

if the previous policy said enforcement didn't kick in until after 20 reservations and if they now are able to enforce on 11 wouldn't that be considered a limitation according to the FL stat?

 

[Cyberc1978]

But DVD is not a HOA. It is a condo association.

In this case I dont think it matters. The FL stat 718 is for condominiums and DVC is a COA, but often just referred to as a HOA.

 

[Cyberc1978]

I’m sure this may have been discussed, but are we assuming the values will be dropping?

if DVC starts to enforce the policy and some of the mega renters starts to dump their contracts and flooding the market I will make the prices go down.

IMO if the delta between direct and resale becomes much bigger than today it could cut into the DVC direct sales. Who wants to buy Poly direct at $240 if resale is $100.

I know that assumes the direct buyers know about resale, not all do that but some do. With social media all you need to be is in a Disney group and your feed is flooded with anything Disney related including DVC.

 

[smileyanna]

Glad to see this policy revisited. Now let’s see if/how Disney enforces it. Until we hear about a wave of Disney notifications and consequences…

 

[Sandisw]

if the previous policy said enforcement didn't kick in until after 20 reservations and if they now are able to enforce on 11 wouldn't that be considered a limitation according to the FL stat?

The policy only discussed what happened after 20…it didn’t explicitly state under 20.

Because it’ was DVC discretion, there was ambiguity.

DVC did not say its 11… They said majority, and while yes, 11 is technically majority, it’s not defined for a reason.


IMO, what this policy does is clear up questions and puts in writing what wasn’t there before, which has always been what I was advised.

Enforcement needs to be clear and not a secret and in my talks with DVC, they always said policy changes would be shared with owners.

You still get it have 20 reservations like before…no change…and they still evaluate…no change…

I actually think thhis being as detailed as iit is, it’s clear it’s about running a business with your memberships and the average owner.

The other piece that I think is importsnt ks that they said reservations or points.

Thats why I don’t see it as further limiting because they are not changing what is a prohibited.

We always were prohibited to turn it into a commercial enterprise and thhat is still the case.

What they did not do is limit any specific action in isolation.

The big ones for me. being on demand vs spec rentals, or who you can rent to..known or unknown.

They can deny lead guest name changes when they believe you are crossing to the commercial world.

But, they don’t outright ban it which would be an example of what IMO would have potentially run up against that statute.

This reads to me that it remains about volume of reservations in the names of others…that create that pattern.