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 this being as detailed as it is, it’s clear it’s about running a business with your memberships and ETA: NOT the average owner.

The other piece that I think is importsnt is 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 with turning it into a commercial enterprise and that 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.

 

[mkatsy]

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.

If you look closely at FL stat 718 they make a clear distinction between “residential condominium” and “timeshare condominium”. Very early in the statute (in the definition section) they defer the management of timeshare condominium to 721. it looks to me like they wash their hands of timeshares. [718.103(26)]

 

[PoppyJ]

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.

This is the part I don't understand. What does "majority" mean?

Say hypothetically, I have 200 points, I have been a member for 5 years and I have never rented out my points, I've always used them for my own reservations. After 5 years, I can't make it to Disney World for whatever reason. For that one year, I want to rent out my 200 points. But under this new rule I can't because it is more than a majority of my points? But someone with 500 points could rent out 200 points every year?

 

[airjay75]

This is the part I don't understand. What does "majority" mean?

Say hypothetically, I have 200 points, I have been a member for 5 years and I have never rented out my points, I've always used them for my own reservations. After 5 years, I can't make it to Disney World for whatever reason. For that one year, I want to rent out my 200 points. But under this new rule I can't because it is more than a majority of my points? But someone with 500 points could rent out 200 points every year?

It's not really a rule - it's just one of 5 examples given upon which the Board or the Management company "may reasonably conclude" than an owner is using their ownership for commercial purposes. It is very flexible language that continues to give them a lot of discretion.

Personally, I wouldn't worry about the situation you have described. I really don't think that is what they're targeting with this. What I might do is try to keep it under 20 reservations for any 12-month period so as to avoid triggering any internal "flag" they may or may not be instituting. The example they have given is both a majority of the reservations for someone else AND more than 20 in a rolling 12-month period.

 

[Tumnus]

Just speaking out as another very much in favor of this! I don't see myself ever renting out points - we had some expiring from a resale purchase and I just went through friends and family until someone said yes absolutely to taking a free night at Disney. My goal of being a DVC owner is amazing trips for my family. If we go on less trips, it will be time for better rooms. If we ever have points left, I'll gift em. Renting would be an absolute last case scenario and I don't see any reason for me ever to do it personally.


That all being said - renting a few here and there makes perfect sense and should 100% be allowed because not everyone has those friends and family who can just drive over to Disney. Owning points just to rent, sitting on the cheapest point rooms/best rooms? No thanks please get rid of them all!

 

[Moonspinner]

This is the part I don't understand. What does "majority" mean?

Say hypothetically, I have 200 points, I have been a member for 5 years and I have never rented out my points, I've always used them for my own reservations. After 5 years, I can't make it to Disney World for whatever reason. For that one year, I want to rent out my 200 points. But under this new rule I can't because it is more than a majority of my points? But someone with 500 points could rent out 200 points every year?

The way I read this is that if they want to go after you they will. Their statement is spongy and allows them to do what they want. I see it as they reserve the right to determine whether or not you have crossed the line. They always had that right if you read your contracts. Now they are warning people that now, they will exercise it.

There are many things that Disney does not enforce. Off topic, but one thing that is interesting to me is how YouTubers use Disney property to make money. I know that DVC specifically prohibits this (you are not allowed to engage in commercial activity at Dvc resorts), and yet Disney has never enforced it. I suspect at some point they will.

 

[IsDVCForMe?]

There’s a person on FB that seems to post a new reservation everyday. Guessing we won’t be seeing that anymore lol.

 

[muppets3d]

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.

There are dozens of timeshares along I-Drive and in Kissimmee that have a $0 resale, and they sell direct contracts every single day.

 

[Moonspinner]

It's not really a rule - it's just one of 5 examples given upon which the Board or the Management company "may reasonably conclude" than an owner is using their ownership for commercial purposes. It is very flexible language that continues to give them a lot of discretion.

Personally, I wouldn't worry about the situation you have described. I really don't think that is what they're targeting with this. What I might do is try to keep it under 20 reservations for any 12-month period so as to avoid triggering any internal "flag" they may or may not be instituting. The example they have given is both a majority of the reservations for someone else AND more than 20 in a rolling 12-month period.

It is impossible for us to stay below 20 reservations. We do a lot of short trips and if we don’t get a 2 bedroom, we often get two studios. We also do things like will will do in May, where we will go to Vero and stay in 2 studios/inn rooms, so 2 reservations, but then, on our way home, we are spending the night at Poly, again 2 studios. So that one 4 night trip has 4 reservations.
I’m not worried about Disney investigating us. We’ve never rented at all. Not on purpose. We just never have enough points to rent. We are borrowed into 2027 for our ridiculous number of reservations lol.

 

[Genie+]

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

Yes. This is a major obstacle for commercial renters to overcome if they try to fight back against DVC’s enforcement.

 

[muppets3d]

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.



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.

People are just trying to justify their behavior.

My body is ready for DVC to drop the hammer.

 

[reddog21]

There’s a person on FB that seems to post a new reservation everyday. Guessing we won’t be seeing that anymore lol.

Unless Disney visibly warns or penalizes someone, it’s just empty threats, which is probably the point.

 

[IsDVCForMe?]

Unless Disney visibly warns or penalizes someone, it’s just empty threats, which is probably the point.

Guess we will see.

 

[muppets3d]

To me it feels like DVC is getting all their ducks in a row and covering all their bases. If the commercial renters that DVC has identified (I am sure they have a list somewhere) don't stop, they have all the data they need to fight back against any possible action the commercial renter may take.