Third party commercial renters

[Sandisw]

I can buy 8000 points of resale at 2 different resorts for 150 a point for 1.2 million dollars. I can rent those points out for 25 a point in 19 separate 420 point 1 week VGF and BLT 2BR reservations, netting me 200k. In 6 years I will have paid off those points and be profiting 200k a year minus dues. I can do all of this and be legal in the eyes of DVC. I can do it again in the names of friends and family members and become a millionaire. Is this ok to most members? What about when I realize I can make even more than 200k per year by spec renting? What about when I realize I can use a script or walk reservations to block other members from those hard to get ones?

If I decide to get 50 of my family and friends, and we all buy our own memberships, and we all rent reservations within a threshold of what DVC says falls under the guidance of a "personal use" membership...which by contract includes rentals...then none of us are running a business, even if we agree that all the money each of us makes will be pooled together to buy, say, a beach house.

I know I have said this, but spec renting and renting, are considered the exact same thing when it comes to our contract. DVD did not differentiate that when they gave us the right to rent..

Even one rental will make someone a "profit". I made a "profit" off DVC when I sold it...even though I never used those contracts as a business....

I get the point you are making that someone can find a way, using DVC, to end up making a lot of money, even if they do the bare basics in renting, but the contract we signed does not preclude that, even if you want it to.

As I posted above, I am becoming more and more convinced that there is a strong possibility that the reason DVC can't stop people from doing some of what they are doing is because they found out that they can only apply rules at the membership level.

 

[Sandisw]

Or maybe it's just as simple as DVC isn't really doing much of anything about commercial renting on the rental broker sites in spite of all the "what if" scenarios and membership math that one can find in this thread.

Often the simple answer is the right answer.

I shared a real example of what I could do. Do you think DVC would be allowed to legally classify the membership my children own as one being used for "commercial purposes" if all it had on it was 15 reservations, if DVC was using the 20 threshold limit?

I agree, maybe the answer is the simple one....DVC doesn't do anything across memberships because either the threshold is higher than people want to accept or they legally can't.

 

[BeachClub2014]

I shared a real example of what I could do. Do you think DVC would be allowed to legally classify the membership my children own as one being used for "commercial purposes" if all it had on it was 15 reservations, if DVC was using the 20 threshold limit?

You shared a purely hypothetical scenario created to support your supposition that DVC is enforcing the rule prohibiting commercial rentals. Which is fine. I don't share that same belief so I offered a counter hypothesis. DVC isn't doing all they can and should do.

 

[lowlight]

I get the point you are making that someone can find a way, using DVC, to end up making a lot of money, even if they do the bare basics in renting, but the contract we signed does not preclude that, even if you want it to.

I’m not a lawyer. I don’t think you are either, my apologies if mistaken. I know we have a few on the board, maybe timeshare law or contract law is their area of expertise. I know in regular law there is letter of the law and spirit of the law. I also know what DirecTV did when they went after third party sellers who were “allegedly” making cards that could get free DirecTV. They wielded the long arm of the law and raided the homes and offices of those they thought were infringing on their IP and basically financially smushed them into the ground in a huge legal abuse of power. You should look it up, it’s pretty interesting. My point is, following the contract while simultaneously going against the spirit of the contract “no commercial business but renting is ok under 20 in a rolling 12 month period” doesn’t necessarily mean they are “not precluded”.

 

[Sandisw]

You shared a purely hypothetical scenario created to support your supposition that DVC is enforcing the rule prohibiting commercial rentals. Which is fine. I don't share that same belief so I offered a counter hypothesis. DVC isn't doing all they can and should do.

Its only hypothetical because we haven't actually done it, but I am wondering your thoughts....when I talk to DVC about this, this situation will be one that I ask about, and one I want to get an answer to.

Seeing that you and I have different views on some things, I am actually curious of what you think.

 

[mistysue]

DVC used the word "membership" in 2007 when setting the rules. Maybe there was a legal reason that rules have to be applied to individual memberships, regardless of whether an owner has multiple ones? I have no idea but it is something that just popped into my head.

I own three memberships and can't use them together, and am treated as though I am three different owners. The only way I can is if I transfer points from one to the next. I can't merge my reservations between my memberships either. So, when I book, I have to choose which membership I want to work within. Maybe its the same with enforcing rules in our contracts? Think about it, there must be a reason why owners who own multiple UYs must be given different memberships, right?

If, we assume, that all of those rentals are on memberships that have the same, or a combination of the same owners, but there are enough memberships holding them, then isn't it possible that DVC has to apply the rules to each on individually since legally, they are individual memberships?

Maybe that is why, assuming DVC is using the 20 reservation rule still, and they are monitoring, there is nothing they can do because they can't enforce rules against an owner, only the membership which holds the contracts?

Here is what I am thinking. I decide to use my Dec UY membership, which is owned by my DH and myself and I rent 15 reservations. I then use my Aug UY membership to make another 15 reservations, but this membership has my adult children as additional owners (on the contracts).

Each of those memberships, if we use the 20 reservation rule, on their own, would still be considered being used for personal use. Now, because DH and I are on both, you can say "we" have 30 rental reservations, as individuals, but my adult children, as owners, only have 15. So, can DVC really penalize them, when legally, what they own is not being used for commercial purposes?

I just have to wonder if there isn't something we don't know about what legally DVC can do to owners whose memberships, individually, are not being used for commercial purposes, but if you lumped them together under one membership, they would be.

And, maybe, just maybe, this is why the whole concept of owning lots of membersihps and staying below the limits is allowed to happen.

And I suspect it was worded the way it is because people who were involved realized how much they could make doing this. It only took one incident where we had to cancel a trip for DH and I to realize we could double our points, rent them out, and pay for our entire membership, our AP's, flights and expense of going year after year.
But then I have this sense of morality that always bites me in the butt and won't do it because I know it's not really supposed to be a business.

As much as DVC made these super easy to loophole rules for their buddies, that we can't even truly know if they are enforcing, nothing will change without enough members to complain and notice. Most don't notice, they just go "huh, this room sells out at exactly 8AM 11 months out every morning, sucks to be me"

I wish for a better way to restrict larger businesses, because individual owners aren't going to invest in writing bots to book rooms or in holding portfolios of the hardest to get ressies, some guy making 6 or 7 figures a year, is.

FWIW, it's not like I'm steaming mad and this is all ruining my life, which is how some of the responses (to be fair mostly from Chuck) read, as if we are all insane and irate and making up issues. I try to book something, if it isn't there I get irritated and figure out something else to book. The past few years I've noticed thinner selections. This Fall is the first time I couldn't cobble anything together with a single room over 2 nights when I looked. It was a trip that would involve two groups, so two sets of people shifting rooms every other day was too much to organize and we pushed it back. I happened to look right before we took the ONLY ever disappointing DVC trip we've been on, which makes it hang in the front of my mind because I have no desire to end up in OKW ever again. We literally got in our car to the airport saying "so maybe we buy a fixed week somewhere so we just can't end up HERE."

 

[lowlight]

Its only hypothetical because we haven't actually done it, but I am wondering your thoughts....when I talk to DVC about this, this situation will be one that I ask about, and one I want to get an answer to.

Seeing that you and I have different views on some things, I am actually curious of what you think.

I know you didn’t ask me, but I think you are misunderstanding the 20 rental rule. I don’t think DVC ever said renting under 20 is ok, I think they said rentals are ok, but if you have a pattern, that is decided by the association, of commercial rental activity, you are in trouble. It could be 3 rentals, the 20 is just there as an additional “if you are a personal owner and have over 20, we are gonna inquire about all 20 previous also to make sure you aren’t a commercial renter”.

 

[mistysue]

I know you didn’t ask me, but I think you are misunderstanding the 20 rental rule. I don’t think DVC ever said renting under 20 is ok, I think they said rentals are ok, but if you have a pattern, that is decided by the association, of commercial rental activity, you are in trouble. It could be 3 rentals, the 20 is just there as an additional “if you are a personal owner and have over 20, we are gonna inquire about all 20 previous also to make sure you aren’t a commercial renter”.

Thank you, I've kept trying to say this and getting shot down by the same people, making me feel like I'm the only person catching the language there.

 

[BeachClub2014]

Its only hypothetical because we haven't actually done it, but I am wondering your thoughts....when I talk to DVC about this, this situation will be one that I ask about, and one I want to get an answer to.

Seeing that you and I have different views on some things, I am actually curious of what you think.

I actually believe that these rental broker sites own dvc contracts purely to make spec reservations and then rent the points. I believe they do so with impunity and the belief that there is little that dvc will do to stop them. I believe it is as simple as that.

 

[Sandisw]

I’m not a lawyer. I don’t think you are either, my apologies if mistaken. I know we have a few on the board, maybe timeshare law or contract law is their area of expertise. I know in regular law there is letter of the law and spirit of the law. I also know what DirecTV did when they went after third party sellers who were “allegedly” making cards that could get free DirecTV. They wielded the long arm of the law and raided the homes and offices of those they thought were infringing on their IP and basically financially smushed them into the ground in a huge legal abuse of power. You should look it up, it’s pretty interesting. My point is, following the contract while simultaneously going against the spirit of the contract “no commercial business but renting is ok under 20 in a rolling 12 month period” doesn’t necessarily mean they are “not precluded”.

I am not a lawyer (worked with in law offices when I was younger), just someone who spends a lot of time doing a lot of research, reading, and talking with some of my lawyer friends...admiittly, none are timeshare lawyers.

IMO, when it comes to something like this, where you own a deeded piece of real estate in a timeshare, the letter of the law would take precedence. That is not to say DVC can't make things difficult, they can. They could tell us tomorrow that you can only do one rental a year, and not violate the contract....

I guess I am not sure that I see much difference in making small profits along the way, in line with our right to rent, against the profit people have made by selling for more than they paid..

 

[lowlight]

And I suspect it was worded the way it is because people who were involved realized how much they could make doing this.

I think people are either vastly underestimating or (intentionally) downplaying how much money there is in this game. Easily 50 to 100 million a year for someone like the (cough) sponsor.

Edited to add: wow, what if it’s an intentional symbiotic relationship between DVC and the brokers? The brokers prop up the resale price of DVC, people more inclined to buy because there is an exit strategy with profit unlike most timeshares, brokers make money off rentals, and DVC has a more in demand product and the cycle continues. That would be nuts.

 

[BuzzLightyr]

Per the maximum reallocation chart...meaning every day is the same....SV studios at BWV would be 15 points a night and PV studios would be 18 points a night... and 1 bedrooms are SV 30 points with PV being 36 points...there are more PV rooms than SV rooms so there really isn't a whole lot they can do to make point differences enough to change demand....

Popular rooms are popular rooms and even if they didn't interest renters, they are still going to be plenty of owners who are shut out of them...and I am just not convinced that too many owners who lose out really care if they lost out to an owner who ended up letting someone else stay in it, or to the owner themselves. The end result is they didn't get the room.

For the 1 bedrooms, I don't see them ever removing the king beds....and I hope they do not...

I think an incremental shift in points will shift demand.
Looking at the current 11 month window in May and not being specific with availability per forum rules.
Just looking at studios. using weeknights point rates for consistency.
9 point options are booked up (gripes on this thread with - Boardwalk - SV and Animal Kingdom Value
12 point options AK SV Jambo are mostly available
15 point options are broadly available (CCV, BRV, BLT, BCV, BWV PG, AK Kidani SV)

Everyone has booked up the cheap options, more expensive options don't have this issue.
OKW is 10 points/weeknight - which is avaiaible, but perhaps less desirable due to bus transportation and internal loops.

If a broker is looking to rent out at $25/point/night
9 points = $225/night
12 points = $300/night
15 points = $375/night

A bump up in points impacts rental desirability. $375/night for a weeknight in a studio in May is hard to rent as a spec rental. $225/night is an easy one to rent out, and can rent out for much more.

Making boardwalk standard view 12 points and instead of 9 will reduce rental demand significantly, while still being the cheapest studio walkable to a theme park. Even just dropping Boardwalk PV by 1 point to 14 might shift demand from 2 bedroom owners. Current 2 bedroom is 32 for SV and 39 for PV. If SV goes up by 3 from 32 to 35 and PV goes down from 39 to 38, the view category becomes a reasonable step up for what it is.

1 King vs. 2 Queens - that's a personal preference and impacted by group size. I'm personally hoping for a hotel like categorization where you can choose and book what you'd like. But that's a harder change within DVC and requires a remodel. My point is I see 1 bedroom as a poor value for the incremental points - as i value beds / sleeping surfaces. I see most people either choosing studios for value or 2 beds for space, and the problem is made worse at boardwalk as all the 2 beds are studio lockoffs.

 

[Sandisw]

I actually believe that these rental broker sites own dvc contracts purely to make spec reservations and then rent the points. I believe they do so with impunity and the belief that there is little that dvc will do to stop them. I believe it is as simple as that.

Okay...I'll keep everyone posted on what DVC says about me and my children each using memberships to rent and whether we can be penalized as a group, or if each membership would fall under their own rules.

 

[tx911]

.

 

[mistysue]

I think people are either vastly underestimating or (intentionally) downplaying how much money there is in this game. Easily 50 to 100 million a year for someone like the (cough) sponsor.

There was a very real discussion over here about why we weren't getting into this game rather than our significantly more stressful day jobs.

 

[Sandisw]

I think people are either vastly underestimating or (intentionally) downplaying how much money there is in this game. Easily 50 to 100 million a year for someone like the (cough) sponsor.

Are you talking about the money brokers are making as a commission for renting reservations for individual owners? Or, they are making that much off reservations they rent on their own, or business owned memberships?

 

[BeachClub2014]

Okay...I'll keep everyone posted on what DVC says about me and my children each using memberships to rent and whether we can be penalized as a group, or if each membership would fall under their own rules.

I do appreciate your willingness to follow up with dvc on this topic. I'm interested to hear what they say.

 

[lowlight]

Are you talking about the money brokers are making as a commission for renting reservations for individual owners? Or, they are making that much off reservations they rent on their own, or business owned memberships?

All 3, but primarily the last two as I believe those are the most profitable and run afoul of the agreement most.

 

[Sandisw]

I think an incremental shift in points will shift demand.
Looking at the current 11 month window in May and not being specific with availability per forum rules.
Just looking at studios. using weeknights point rates for consistency.
9 point options are booked up (gripes on this thread with - Boardwalk - SV and Animal Kingdom Value
12 point options AK SV Jambo are mostly available
15 point options are broadly available (CCV, BRV, BLT, BCV, BWV PG, AK Kidani SV)

Everyone has booked up the cheap options, more expensive options don't have this issue.
OKW is 10 points/weeknight - which is avaiaible, but perhaps less desirable due to bus transportation and internal loops.

If a broker is looking to rent out at $25/point/night
9 points = $225/night
12 points = $300/night
15 points = $375/night

A bump up in points impacts rental desirability. $375/night for a weeknight in a studio in May is hard to rent as a spec rental. $225/night is an easy one to rent out, and can rent out for much more.

Making boardwalk standard view 12 points and instead of 9 will reduce rental demand significantly, while still being the cheapest studio walkable to a theme park. Even just dropping Boardwalk PV by 1 point to 14 might shift demand from 2 bedroom owners. Current 2 bedroom is 32 for SV and 39 for PV. If SV goes up by 3 from 32 to 35 and PV goes down from 39 to 38, the view category becomes a reasonable step up for what it is.

1 King vs. 2 Queens - that's a personal preference and impacted by group size. I'm personally hoping for a hotel like categorization where you can choose and book what you'd like. But that's a harder change within DVC and requires a remodel. My point is I see 1 bedroom as a poor value for the incremental points - as i value beds / sleeping surfaces. I see most people either choosing studios for value or 2 beds for space, and the problem is made worse at boardwalk as all the 2 beds are studio lockoffs.

That is very true, but by raising the points to make things less desirable for owners to rent, you do realize it means that owners who are not renting, and just want to book the rooms for themselves, now have to pay more?

Not sure that I support that at all.

 

[mistysue]

I think people are either vastly underestimating or (intentionally) downplaying how much money there is in this game. Easily 50 to 100 million a year for someone like the (cough) sponsor.

Edited to add: wow, what if it’s an intentional symbiotic relationship between DVC and the brokers? The brokers prop up the resale price of DVC, people more inclined to buy because there is an exit strategy with profit unlike most timeshares, brokers make money off rentals, and DVC has a more in demand product and the cycle continues. That would be nuts.

You know there have to be people who left working for DVC to do just this once they saw how easy it was to take advantage of.

Are you talking about the money brokers are making as a commission for renting reservations for individual owners? Or, they are making that much off reservations they rent on their own, or business owned memberships?

Not addressed to me, but all of the above.