Third party commercial renters

[Genie+]

What makes you think these owners are not paying the taxes they owe? I make sure to declare any rental income on my tax return.

Renting the same huge contracts year after year after year is a type of flagrant non-compliance, so I’d expect to find at least some overlap there when it comes to other rules and regulations.

It’s more A) risk of being a target for IRS rewards with B) renting out such a high number of points on the same contracts year after year is not worth the bother for most tax brackets to claim.

 

[Chuck S]

I of course had to go track down this post. One of the commenters said the same thing recently happened to them. It’s really too bad for the people who had rented the points and were planning on the GV.

I do feel bad for the innocent renters in these situations, but at least the Broker should either refund their money or make some other reservations to cover their trip. The renters I feel really sad for are people that rented directly from the owner, not only can't the owner work with them to find other DVC accommodations, but may choose to not refund their money and just not communicate at all with them

Honestly I am surprised there hasn’t been more IRS issues. Many of the people renting 1000 or 4000 points on FB, here and elsewhere use real name as username (and almost always during rental process). Like here you can see years and years history of multi 1000pt+ transactions and details, and name on DVC contracts searchable on OCC site. It’s a very public paper trail. Doesn’t IRS give out 10% rewards on fruitful reporting? Even if nobody reported, would the IRS ever look into something like that?

Brokers based in the US would be required to inform the IRS via a 1099, or similar document, so if it isn't claimed, it would probably at least trigger a letter from the IRS. Much like my property manager for my regular rental properties files such a document. In fact, PayPal also has my info to file a 1099 for income through them. But it is rare there is ever any income to report by PayPal, as renting my points isn't something I do on a regular basis.

 

[Sandisw]

I believe we just said the same thing. I just said it in many fewer words.

The other takeaway that I'm getting from this, that you are not really pointing out, is that this does leave DVC wide open to allowing the "buddy" of someone in charge to be massively abusing the system and get away with it because they are not really committed to any specifics of when they have to stop any particular individual. You could have people getting in trouble for renting out 20 reservations and somebody else renting out 50 and DVC looking the other way, But the rules are written in a way as to be so vague that they are essentially meaningless for enforcement purposes, unless someone backstage decides they want them to be in any particular case.
In other words, the person who saw their reservation canceled literally could have been dealing with a situation where it was only looked into because somebody in DVC decided they wanted the room instead. I don't expect that that's what actually happened, but it's absolutely possible with how loosely these rules are written.

Actually, that is not what I am saying. What I am saying is the rules are the rules, and they are what the documents say they are and not what someone believes they are or should be. And, right now, when I read all the documents, the rules are broad and no specifics are in place, which allows me to use my membership based on what is there, and not what is not.

If DVC is going to use a threshold to cancel reservations, then we, as owners, will see that in our doucments and if it is not there, and someone has a reservation canceled, then they have a right to file a complaint because the rules were not stated, which, from what was disclosed to me, they need to be.

We, as owners, like it or not, only have the right to hold DVC accountable for our own use, and not the use of others. So, could DVC look the other way and let some memberships break rules and not others if there is such published rule?

Of course...its possible. And, there is no way for us, as owners. to know whether they do, outside of filing a complaint against them with FL timeshare board.

But, the key is that the rules needs to be there in order for you or I and not someone else, to be treated differently. I think what I am taking away from all of this is that DVC, right now, with how the rules are written, has chosen to have broad rules in place and when, and if, they decide they want them to be stricter we will be notified.

In terms of the example shared, it appears to have been due to outstanding reservations, but complaince could also be related financial reasons as well that cause them to cancel too.

Hey, I get it....people want stricter rules written up, and should contact DVC to share with them that they think they should have stricter rules for personal use...for me, until I see it officially in writing from DVC in the documents on my membership, then I am comfortable with the current rules and regulations of my contract.

 

[mistysue]

Actually, that is not what I am saying. What I am saying is the rules are the rules, and they are what the documents say they are and not what someone believes they are or should be. And, right now, when I read all the documents, the rules are broad and no specifics are in place, which allows me to use my membership based on what is there, and not what is not.

If DVC is going to use a threshold to cancel reservations, then we, as owners, will see that in our doucments and if it is not there, and someone has a reservation canceled, then they have a right to file a complaint because the rules were not stated, which, from what was disclosed to me, they need to be.

We, as owners, like it or not, only have the right to hold DVC accountable for our own use, and not the use of others. So, could DVC look the other way and let some memberships break rules and not others if there is such published rule?

Of course...its possible. And, there is no way for us, as owners. to know whether they do, outside of filing a complaint against them with FL timeshare board.

But, the key is that the rules needs to be there in order for you or I and not someone else, to be treated differently. I think what I am taking away from all of this is that DVC, right now, with how the rules are written, has chosen to have broad rules in place and when, and if, they decide they want them to be stricter we will be notified.

In terms of the example shared, it appears to have been due to outstanding reservations, but complaince could also be related financial reasons as well that cause them to cancel too.

Hey, I get it....people want stricter rules written up, and should contact DVC to share with them that they think they should have stricter rules for personal use...for me, until I see it officially in writing from DVC in the documents on my membership, then I am comfortable with the current rules and regulations of my contract.

We are saying the same thing, The only difference is I am calling it abuse when someone is clearly going against the intent even though it's not formally written into the contract.

 

[Sandisw]

We are saying the same thing, The only difference is I am calling it abuse when someone is clearly going against the intent even though it's not formally written into the contract.

Got it....that is we differ.

A side point, for others...didn't want to start a new post...I did find some information regarding the term "lock out" and DVC can lock someone out of a membership for both financial reasons and for going against the governing documents...lock out can mean reservations canceled.

So, DVC does have the right to cancel reservations if they see someone who is doing something that is not in compliance of the governing documents....it is in the MS POS (which applies to everyone)...I knew I had seen something to that effect.

 

[DonMacGregor]

The renters I feel really sad for are people that rented directly from the owner, not only can't the owner work with them to find other DVC accommodations, but may choose to not refund their money and just not communicate at all with them

That wouldn't be very smart...

 

[CWTC]

Saw this on a Facebook tips page tonight. Maybe Disney is trying to stop the commercial renters? A renter has their grand villa cancelled at AKL for a week in December.

I’ve been keeping an eye on the Facebook post and one of the managers from the rental store she used posted this:
“Regarding the member involved in this situation, upon becoming aware of the reservation no longer confirming with Disney, we reached out to inquire about the status. We were informed by the member, after they spoke with Disney Vacation Club, that they were suspected of commercial renting. As a result, their most recent contract purchase was voided, along with five reservations that were secured with the points on the contract, one of which is the original poster's.”

If that’s accurate then 5 reservations were cancelled and the member lost their most recent DVC purchase. Also a second commenter said the same thing happened to them.

 

[GoingSince1990]

Renting the same huge contracts year after year after year is a type of flagrant non-compliance, so I’d expect to find at least some overlap there when it comes to other rules and regulations.

It’s more A) risk of being a target for IRS rewards with B) renting out such a high number of points on the same contracts year after year is not worth the bother for most tax brackets to claim.

There is a huge difference between breaking Disney's rules about commercial versus personal use of your points versus nonpayment of income taxes. Breaking Disney's rules may mean that some reservations get canceled, while not paying your taxes can result in thousands of dollars of interest and penalties and possible prosecution and prison time. And my guess would be that any "commercial" operators renting out huge amounts of points and making six or seven figures in profits per year are if anything more likely to be paying the taxes they owe than someone who occasionally rents a small number of points through David's (which is based in Canada and does not send out 1099s) and forgets to report the couple of hundred dollars on their tax return. Because the commercial operation making large profits and not paying taxes is the kind of thing that the IRS comes down on like an absolute ton of bricks.

 

[JackosinDIS]

Got it....that is we differ.

A side point, for others...didn't want to start a new post...I did find some information regarding the term "lock out" and DVC can lock someone out of a membership for both financial reasons and for going against the governing documents...lock out can mean reservations canceled.

So, DVC does have the right to cancel reservations if they see someone who is doing something that is not in compliance of the governing documents....it is in the MS POS (which applies to everyone)...I knew I had seen something to that effect.

It appears from reading further comments in respect of the cancelled reservation on FB, that the owner, being suspected of ‘commercial renting’ not only had five reservations cancelled, but the contract purchase was actually voided by Disney.

I’m not sure that anything in the MS POS mentions voiding a purchase! The term ‘lock-out’ certainly doesn’t seem to cover it.

I do feel that where there are apparently such severe consequences, Disney ought to clarify the rules so that owners can make sure they don’t fall foul of them. At the moment owners are at the whim of DVC as to what they consider to be commercial.

 

[Brian Noble]

If DVC is going to use a threshold to cancel reservations, then we, as owners, will see that in our doucments and if it is not there, and someone has a reservation canceled, then they have a right to file a complaint because the rules were not stated, which, from what was disclosed to me, they need to be.

I would suggest that this interpretation is the one you want, but not the only one that is possible.

The governing documents are written with a wide latitude, including lots of "in [DVCMC's] sole and unfettered discretion"s. If they decide to go after some owner for whatever reason, they will, and it will be up to that owner to fight it. That's a losing proposition for the vast majority of owners, who would not be able to front the time and money it would take to prevail. Throw in the very real possibility of losing, and it's doubtful most people would even try.

I've seen this play out in several other timeshare systems, and it always unfolds the same way. Lots of people believe (a) the management company would never go after them, and (b) they'd fight and win if it happened. Each time it actually happens, the owner in question slinks away with their tail between their legs.

This is the developer's game, they set and can change the rules, and we can play within those rules as they evolve or leave.

 

[Sandisw]

It appears from reading further comments in respect of the cancelled reservation on FB, that the owner, being suspected of ‘commercial renting’ not only had five reservations cancelled, but the contract purchase was actually voided by Disney.

I’m not sure that anything in the MS POS mentions voiding a purchase! The term ‘lock-out’ certainly doesn’t seem to cover it.

I do feel that where there are apparently such severe consequences, Disney ought to clarify the rules so that owners can make sure they don’t fall foul of them. At the moment owners are at the whim of DVC as to what they consider to be commercial.

Once closed, they can’t take contract away, but if you are in the process of buying one? Then I don’t think anything can legally prevent DVD from canceling a sale. It’s possible that they found it would violate the 8000 point rule.

I see those as two different things.

 

[Genie+]

Once closed, they can’t take contract away, but if you are in the process of buying one? Then I don’t think anything can legally prevent DVD from canceling a sale. It’s possible that they found it would violate the 8000 point rule.

I see those as two different things.

I was wondering if they can prevent an owner from partaking in the membership due to breech of contract, especially where continued and repeated breech of contract is concerned. Could the last option left be that person transferring title or selling?

The way that park bans function to bring the hammer down - is there any DVC equivalent that accomplishes a similar function?

 

[JackosinDIS]

Once closed, they can’t take contract away, but if you are in the process of buying one? Then I don’t think anything can legally prevent DVD from canceling a sale. It’s possible that they found it would violate the 8000 point rule.

I see those as two different things.

You wouldn’t think they could take a closed contract away…

But the quote below is a FB post by @pkrieger2287 which very much indicates that the contract (having already used the points to make reservations) was in fact voided!

As a result, their most recent contract purchase was voided, along with five reservations that were secured with the points on the contract, one of which is the original poster's.”

 

[Sandisw]

I would suggest that this interpretation is the one you want, but not the only one that is possible.

The governing documents are written with a wide latitude, including lots of "in [DVCMC's] sole and unfettered discretion"s. If they decide to go after some owner for whatever reason, they will, and it will be up to that owner to fight it. That's a losing proposition for the vast majority of owners, who would not be able to front the time and money it would take to prevail. Throw in the very real possibility of losing, and it's doubtful most people would even try.

I've seen this play out in several other timeshare systems, and it always unfolds the same way. Lots of people believe (a) the management company would never go after them, and (b) they'd fight and win if it happened. Each time it actually happens, the owner in question slinks away with their tail between their legs.

This is the developer's game, they set and can change the rules, and we can play within those rules as they evolve or leave.

That is what I walked away with, and always knew that rules can be changed by DVC and one has to weigh that against all else in terms of making decisions….

So, that is why I focused in on my two main pieces that might play a role in renting for me…and my use of my contract is all I care about…and right now, I don’t see anything in the documents to suggest DVC could cancel outright based on those two situations.

Not saying that they couldn’t try, but I think something as specific as using a broker, even for one rental, would be one that we will see in published documents if they want to include that as part of the guidelines. Until then, each owner can decide what and how to do things.

 

[Sandisw]

You wouldn’t think they could take a closed contract away…

But the quote below is a FB post by @pkrieger2287 which very much indicates that the contract (having already used the points to make reservations) was in fact voided!

Doesn’t mean the contract was closed though, does it? It could have been a new contract that was doing the whole 90 day thing? That to me is what the word “void” would refer to because once a contract is owned, DVD would have to take it back legally in some way and that word doesn’t seem to fit.

 

[JackosinDIS]

Doesn’t mean the contract was closed though, does it? It could have been a new contract that was doing the whole 90 day thing? That to me is what the word “void” would refer to because once a contract is owned, DVD would have to take it back legally in some way and that word doesn’t seem to fit.

Yes you’re probably correct on that… I hope so anyway.

 

[Sandisw]

I was wondering if they can prevent an owner from partaking in the membership due to breech of contract, especially where continued and repeated breech of contract is concerned. Could the last option left be that person transferring title or selling?

The way that park bans function to bring the hammer down - is there any DVC equivalent that accomplishes a similar function?

They can lock out an owner from use of membership for specific reasons so yes, it seems they can…but not being a lawyer, I don’t know for how long, etc. I would need to read that clause again.

 

[DonMacGregor]

I'm torn between brewing another pot of coffee, or just going straight to popping some popcorn. This is going to be entertaining.

 

[Swaggerwagon]

If that’s accurate then 5 reservations were cancelled and the member lost their most recent DVC purchase. Also a second commenter said the same thing happened to them.

This only needs to happen a couple times and it will cause enough doubt for the whole rental industry to get rocked. Social Media will do Disney’s work for them.

 

[MarkNC2Disney]

I’ve been keeping an eye on the Facebook post and one of the managers from the rental store she used posted this:
“Regarding the member involved in this situation, upon becoming aware of the reservation no longer confirming with Disney, we reached out to inquire about the status. We were informed by the member, after they spoke with Disney Vacation Club, that they were suspected of commercial renting. As a result, their most recent contract purchase was voided, along with five reservations that were secured with the points on the contract, one of which is the original poster's.”

If that’s accurate then 5 reservations were cancelled and the member lost their most recent DVC purchase. Also a second commenter said the same thing happened to them.

Wow!!