Official Thread - New commercial use policy published 03/31

[Sandisw]

Here is another thing that stands out for me. They don’t confuse things by using the words “family and friends”

They kept it to what constitutes commercial and what actions can lead them to that conclusion.

 

[TDK44]

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

Am I interpreting this correctly to mean that the DIS DVC Rental/Transfer board is now out of policy?

 

[muppets3d]

I appreciate that no one has put this to the test, but I was wondering if anyone can tell from the wording whether breaking one of these rules is enough to be penalised, or if breaking one of the rules will simply make them investigate you for potentially being a commercial renter.

The only one which bothers me is the overlapping rooms/dates part. We are thinking of doing a family trip in the next year or two with my parents and my sisters family. We're definitely beyond sharing rooms so we would most likely book three studios. I couldn't afford a grand villa, and most of my points are at BCV which doesn't even have them. It would likely take at least a years worth of points, so clearly a majority. Does this mean that I as I have broken one of the stated rules they can take action against me, or would I be able to challenge this as it I can prove that these people are related to me so it is not a commercial rental? I don't mind if they want to question me but I don't want it to be enforced without investigation!

I do find this rule to be quite unusual. If I was renting out my points I probably wouldn't want my renters staying at the same time as me! I also regularly book overlapping rooms while we're still in the planning stages.

There is a clear pattern of behavior that constitutes commercial renting. Someone who books 3 studios for their family versus one grand villa does not constitute a pattern of behavior that constitutes commercial renting.

Am I interpreting this correctly to mean that the DIS DVC Rental/Transfer board is now out of policy?

It has been since it was created because DVC's rules have always expressly prohibited exchanging money for transferred points, but ensuring owners adhere to DVC's rules isn't this board's responsibility.

 

[Brian Noble]

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.

“It is difficult to get a man to understand something, when his salary depends upon his not understanding it!”
--Upton Sinclair

What does "majority" mean?

The plain meaning is: "More than half."

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

It's very clear (and has been for a while, IMO) that Disney has very carefully framed this entire discussion as "We are just clarifying what the documents have always said."

Here's how I read all of this, in light of how other developers have done similar things: These are not Rules so much as Reasons. And as Don notes in the rest of his post (a part I did not quote), the list is not all of the possible Reasons. (That's what the "[w]ithout limiting the discretion" clause means.)

Here's the difference between a Rule and a Reason. Rules are an exhaustive list that clearly define The Line. If you violate them, you are on the wrong side of The Line; if you stay within them, you are on the right side of The Line. Reasons are the justifications for doing something that Disney wants to do anyway, and in most cases will be viewed by most impartial observers as reasonable in light of The Reasons.

The way this has played out with Wyndham: They had a short list of who they considered to be the worst offenders, and those specific individuals were very publicly targeted. The first round was a set of "knock it off or else" letters. Those who chose "or else" had their accounts frozen, and were essentially dared to sue. Almost without fail, each of those individuals was so obviously running a business that almost no one else* thought that what they were doing was within The (implied) Rules. Rank and file owners generally lined up with Wyndham and against the Evil Mega-Renters, leaving the latter on an island.

At that point, the Evil Mega-Renters were left with the following choices: exit the business, or try to take Wyndham to court. I can think of exactly one person who negotiated an exit that wasn't a total capitulation, but he did so in part by pointing out all the loopholes that the other Evil Mega-Renters were using to get leverage in the system, so he had something to offer. The rest were stuck in endless and very expensive litigation unitl they either reached a settlment that included an NDA and an agreement to never own Wyndham again, or they just quit.

Will Disney do that? I don't know. But it sure looks like they are lining up the ducks to do exactly this. Slowly.

As I've also noted before, this "shoot first ask questions later" approach Wyndham took to was modestly successful, but it was partly a game of whack-a-mole. What was much more successful? Cancelling a few rental reservations made by some of those worst offenders at the very last minute, and telling the guests when they arrived; "Sorry, we can't help you." Those guests then told everyone, everywhere, that Wyndham rentals were "risky" and demand plummeted, and fast. If you do not believe me, go back and skim the we loooooove Bonnet Creek thread. For years, WBC was the darling of the offsite deal-seeking community: a resort with tons of availability at extremely good prices that felt like it was inside the bubble. Almost overnight, demand cratered. To this day, there are a lot of "be careful, Wyndham cancels reservations" warnings whenever anyone talks about renting there.

At the end of the day, here is the thing I think most people are missing. Disney does not have to have an airtight legal case for this to work. The guidelines may or may not be entirely 100% kosher. It won't matter, for two reasons. One: Disney is almsot certinly going to choose the absolute worst offenders that no reasonable person would say is not a buisness. For example, if I were one of the named principals in one of the Large Broker's group of LLC-owned Memberships, I would assume there is a target on my back. Two: Even if Disney's case is not airtight, they absolutely can (and probably will) starve out individual owners in expensive litigation.

"What about a pro bono class action suit? That will save us!" To the extent I understand the economics of those things, there is approximately no chance of that happening, because the class is not nearly big enough and the damages are not large enough.

I appreciate that no one has put this to the test, but I was wondering if anyone can tell from the wording whether breaking one of these rules is enough to be penalised, or if breaking one of the rules will simply make them investigate you for potentially being a commercial renter.

This is exactly what I mean by Rules vs. Reasons. This question is framed in a Rules world. Disney is not going to use a bunch of criteria to sweep up 10% of the ownership to hassle, beyond maybe sending a "hey, knock it off" letter. They are going to pick a dozen or so of the largest, most egregious examples they can find, and go after them first, pointing to this list as the Reasons.

And, if I were a betting man, I'd bet they already know who those dozen or so people are---and have for years.

--------------------
*: The exceptions were, almost without fail, other medium-to-large-scale renters. They spent a lot of time trying to convince the rank-and-file owners that these moves were harming their ownership. The rank-and-file owners were not having it.

 

[atthebeachclub]

I just counted and we also have 25 reservations. 7 are individual day reservations at VDH to get the free lighting lane on each day lol.

LOL; I have 7 VDH of the same! I almost didn’t even consider it. I also booked my BCV studio for the same timeframe in case it turns out my mom isn’t coming after all and we decide to head back to our usual BCV. I suspect my personal use is running afoul here.

 

[Sandisw]

The biggest issue to me are bots or accounts snagging high-demand reservations (popular dates, value rooms at AKL, etc.) to rent them for profit and I sincerely hope these new published guidelines will give Disney the leverage they need to go after these renters aggressively.

I am sure they have already modeled use across a large sample size, the number 20 did not manifest out Mickey's gluteus maximus. It's an established threshold now.

I see the tag about the overlapping reservations to be geared toward this since they already know who are using a majority or even all of the points for others and it’s something I had a conversation with them about.

By being specific but general at the same time allows owners to have a better idea of what they are looking for when deciding if you have shifted to a commercial enterprise.

IMO, the inclusion of that term is important in what they want to make clear.

People who are making a lot of reservations in the names of others and it’s clear of the intent, this really lets them know all they will watch for.

 

[Sandisw]

Am I interpreting this correctly to mean that the DIS DVC Rental/Transfer board is now out of policy?

No because they mention owners can use a third party to help them rent.

It goes back to how often and regularly one is doing it.

Now, will it mean some owners who post here and post a lot of points may find themselves in review?

Possibly but they will have lots of other things to use to conclude that owner has shifted to using the membership as a commercial enterprise.

If I had to speculate, that clause is to bolster the case against an owner they have identified.

 

[Cyberc1978]

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)]

I’m sorry but I’m not seeing it.

https://www.leg.state.fl.us/statute...ute&URL=0700-0799/0718/Sections/0718.110.html

 

[AstroBlasters]

He may want to re-read this part:

He’s kind of stuck. He bought Aulani, Disneyland Hotel, and Rivera direct with loans and then had a job change which cut his income. He can’t sell the contracts without a major cash infusion (which he doesn’t have) and so the rentals essentially cover the dues and part of the loan payments.

We can “should have, could have, would have” all you want…. but that doesn’t really matter at this point.

It’s rent or go into foreclosure and he does not want to go into foreclosure and has hopes that the income will increase in time in a new role with a new company and that he will be able to use them for personal use.

At this point, I would put him in the “willing to risk it” category and will just adjust to have fewer & larger rentals.

 

[Brian Noble]

…which is great, but I’m not sure it will make it any less likely he ends up in the crosshairs. Maybe? Maybe not.

 

[davper]

This is my quick take on the new rules - 20 max remains, but there are 4 new things that can trigger enforcement consequences:
1. The majority of reservations made are used by non owners/associates - for example - you make 10 reservations & over half of them are for non owners/associates
2. The majority of reservations made have overlapping room types or dates
3. You advertise rentals
4. The old 20 reservations in 12 months remains
5. Videotaping on resort property to market vacation rentals

It sort of reads like they’re targeting certain business practices…we’ll see.

So does this mean the points for rent forum at Disboards will be discontinued?

 

[dcfromva]

We'll have to see how this goes. We don't rent out our points, but we do make quite a few reservations. We don't always use all our points ourselves--We occasionally let family members use some of our points. I don't know if that puts us in the bullseye.

One reason we have a lot of reservations is that I pick up the scraps after the 11 month booking window rolls around. I try to "modify" to add extra days as they come available, but the available days don't always come available consecutively. I just completed a visit at the VGC which originally consisted of 4 nights with 3 reservations--until I requested member services smoosh them all together. I have an upcoming reservation this fall at BWV that consists of 3 reservations for 9 days. Do they count the towards the 20 before or after you smoosh them together? What if you make a reservation and then end up canceling it-does that count as one of the 20? I don't have a counter going--so I don't have any idea as to where I stand.

Another reason we have a lot of reservations is that DH and I have annual passes for both DL and WDW. (We are retired and I like to see the different seasons.) We've already gone to DL twice with 4 more visits scheduled in the next 12 months. We've gone to WDW once with 3 more visits scheduled (so far).

We also have few overlapping reservations because we have invited folks to join us. But, (this is more a rant against the universe) sometimes things work out where folks can't join us. Like if the person we've invited has a job that requires them to cancel at the last minute (for me "last minute"= less than 7months LOL). I've tried to manage this the best I can by getting 2 rooms instead of a 2br (a 2br would be kind of silly if only DH and I ended up going). And, if an unplanned cancellation happens we don't rent out the second room, we cancel the reservation and put the room back into DVC inventory.

One pet peeve I have about the associate thing is DH is listed as the primary member on one of our contracts. It was not set up that way when we signed the contract, but Disney morphed it over to DH being the primary member on one of the subsequent contracts we purchased. ( I did fix this on the 4th and 5th membership--with just me on the contract. ) Anyway, after 35 years of visits to WDW DH goes there mainly to keep me company and to hang out with the extended family. I make the reservation in my name (even if it is on the contract where DH is primary) because I could end up going by myself--plus, it didn't use to make any difference up to now. (The likelihood of DH going by himself is zero). If I did a look back-- I don't think DH has been the primary guest in any recent times (on the contract where he is primary). Is DVC going to overlook my previous transgressions?

We originally purchased DVC 24 years ago because of the program's flexibility. We were what I considered unconventional timeshare users because at the time I worked shift work with no sat/sun weekends off (so for us--no Fri/Sat/Sun check ins for a traditional timeshare week). And, it took us 10 years to decide to purchase. We eventually purchased DVC because DVC literally had a good answer for every one of our concerns. I hope this new policy does not impact the use and enjoyment of our DVC.

I've thought about adding on at the Polynesian or the Grand Floridian, but there are a few strikes against this (one-me being kind of old and not likely I'll see the end of the contract). Another concern is if our current level of ownership results in restricted use of our contracts I think we would be crazy to add on more points.

 

[byurick]

He kind of stuck. He bought Aulani, Disneyland Hotel, and Rivera direct with loans and then had a job change which cut his income. He can’t sell the contracts without a major cash infusion (which he doesn’t have) and so the rentals essentially cover the dues and part of the loan payments.

We can “should have, could have, would have” all you want…. but that doesn’t really matter at this point.

It’s rent or go into foreclosure and he does not want to go into foreclosure and has hopes that the income will increase in time in a new role with a new company and that he will be able to use them for personal use.

At this point, I would put him in the “willing to risk it” category and will just adjust to have fewer larger rentals.

I find it pretty silly that someone with only 300 points to rent would be considered a "for profit" business but what do I know.

 

[Cyberc1978]

Bots? Really? I guess that wouldn’t be abnormal these days.

It’s been discussed a lot in the past and maybe someone is using a bot - but we honestly don’t know.
We used it as an explanation to why reservations disappear as fast as they do. Another possible explanation could be Disney themselves grapping the rooms - again we don’t know but it is a just as good explanation as any.

 

[RivShore]

And, if I were a betting man, I'd bet they already know who those dozen or so people are---and have for years.

Thanks for another informative TS post, Brian!!

As for the above, why do you think are they jumping thru all these new hoops, when we all know DVC knows exactly who the commercial renters are. They could have just given them the boot based on "no commercial" which was already the documents, no? Is it just to make it lawsuit proof? Just to keep others from establishing a new rental business? Just to make it look like they are doing something for all us complainers? All of the above?

 

[cruisehopeful]

I find it pretty silly that someone with only 300 points to rent would be considered a "for profit" business but what do I know.

I see that situation as "for break even" and not for profit. This is a very specific situation that I couldn't imagine Disney having an issue with. I guess we'll see eventually.

 

[kristenrice]

You would still be able to do that, just not the majority of the time (counted by reservations and points). So once in the last few years for 1/3 of your points during that time and 1/3 of your total reservations would be allowed.

I do not like this "rule"...

If we want to travel regularly with another family, why must we be forced to stay in the same room with them? Why can't we book them into their own room? There are many reasons why people who are legitimately travelling together may not want to be in the same room(s). DVC actively promotes the "club" as a way for extended families to vacation together "year after year". What if multiple rooms are needed for those annual vacations? Are they saying that those owners will now be penalized as "commercial renters" if they bring friends or family members "year after year"?

 

[cruisehopeful]

Thanks for another informative TS post, Brian!!

As for the above, why do you think are they jumping thru all these new hoops, when we all know DVC knows exactly who the commercial renters are. They could have just given them the boot based on "no commercial" which was already the documents, no. Is it just to make it lawsuit proof? Just to keep others from establishing a new rental business? Just to make it look like they are doing something for all us complainers? All of the above?

My opinion is they just want everything in a row for litigation. Mega renters are probably going to want compensation for their losses. Disney will be able to direct them to all of the things that were violated.

 

[mkatsy]

I’m sorry but I’m not seeing it.

https://www.leg.state.fl.us/statute...ute&URL=0700-0799/0718/Sections/0718.110.html

Not in 718.110 back up at the top in 718.103 where they define the terms used in the statutes. Read 718.103 (26) all the way down to 718.103 (29).

 

[crazywig]

It’s been discussed a lot in the past and maybe someone is using a bot - but we honestly don’t know.
We used it as an explanation to why reservations disappear as fast as they do. Another possible explanation could be Disney themselves grapping the rooms - again we don’t know but it is a just as good explanation as any.

I think the consequence of losing the ability to book online is a tell that there are bots they want to stop? I'm a long time subscriber to bot theory lol.