Tighter renting restrictions

[rinkwide]

...DVC's definition for "commercial purpose" may be a fairly broad concept made up of a number aspects...

And my definition may be rather narrow and include very few instances where such purpose might exist. Who's would be right?

Unfortunately for them, DVD does not have ultimate authority to define "commercial purpose". As a result, I think we'll see continued posturing with little, to no action.

 

[Plutofan]

Nothing I've seen in the Timeshare or Condo rules would address this issue other than the rule to include that one should not expect a profit from resale. And I do believe it is applicable here and is clearly aimed at preventing sellers from using the idea to buy now and make a profit later as a sales tactic. And as Doc mentioned above, there would be no way for DVC to realistically monitor the price charged, much less the profit since there are more variables than simply price. Plus for the minimal glimps of info we've gotten from those directly affected, there has been no mention of price or profit, only number of rentals per year with the number of 20/yr being mentioned.

When I talked to a guide they said that Disney had a problem with people buying points, renting them out, and then selling in a few years when the price goes up. People were not using the points themselves.

 

[Dean]

When I talked to a guide they said that Disney had a problem with people buying points, renting them out, and then selling in a few years when the price goes up. People were not using the points themselves.

I don't see how that addresses the question, it's too general. The issue is where and how does DVC draw any lines and what are they going to do about it after that. The only references we've gotten so far is the level of 20 rentals per year (or was it 20 reservations per year). The truth is DVC frequently doesn't know which are rentals either and you can bet members won't be in any hurry to tell them now even though the rules say we are supposed to though it's not a POS rule I don't believe.

 

[ducklite]

As Doc wrote above, there is no mention in the POS of profit, only a reference to commercial renting, which isn't defined in the POS currently. The price received is not taken into account.

We sold our BCV points for a tidy profit a couple years ago. We had bought them at a special CM rate shortly before we decided to build the house in Florida. We sold them about six months after we moved into the Florida house, as we realized we no longer needed 460 points a year. We retained the BWV points--210 of those 460. So they certainly don't have a problem with profit through sale, as they passed during ROFR. For the record, we had rented 60 or so of those points to friends earlier that year, knowing we weren't going to use them, before we decided to sell them.

I think what they are trying to put an end to is people with large contracts who reserve a number of units during peak holiday seasons and then sell the week on E-Bay or through other means for astronomical prices equating to $20 a point or so, making it unfair to other OWNERS who are shut out from those weeks as a result, as well as those who buy large amounts of points, rent them for a few years without ever using them for personal use, and then sell at a profit.

As used in the POS, lessee clearly means a renter as it uses terms like "members, their lessees,"

Agreed.

Anne

 

[RobDoc]

And my definition may be rather narrow and include very few instances where such purpose might exist. Who's would be right?

Unfortunately for them, DVD does not have ultimate authority to define "commercial purpose". As a result, I think we'll see continued posturing with little, to no action.

While we can each have a definition, the only entity that has the ability and responsibility to define these issues is DVD. That responsibility is spelled out in the POS to some extent. If an affected individual disagrees with any enforcement, they have the right to challenge DVD's ability to enforce the policy. In this case, DVD's definition would be right until they decide to change it or are directed to change it by a court.

DVD absolutely has the ultimate authority to define "commercial purpose" and they have already done so in the POS. Again, they can also change that definition either voluntarily or by direction of a court, but we have already agreed to their authority to make that definition when we signed our documents. Whether we agree with the defintion is a different issue.

Again, from the POS :

"Commercial purpose" shall include, but not be limited to, a pattern of rental activity by a Cotenant that the Association, in it's reasonable discretion, could conclude constitutes a commercial enterprise or practice.

We can debate the interpretation, but it's clear, to me at least, that they do have the authority to define it as they wish. It would be up to those affected to challenge the decision as it applies to their personal situation. Apparently, at least a few have already accepted and acquiesed to the "posturing" already presented.

 

[3DisneyKids]

While the rules allow you to rent to make up for the occasional year you don't plan to visit yourself, what they prohibit is renting as routine commercial venture.

This is it exactly.

Word on the street is that DVC is now cracking down on this. There have been many threads dealing with this, some of which have gotten heated and/or locked. There have been some members who have received a letter stating that their accounts "looked like" they were renting for profit (also referred to as commercial renting). If this was found to be the case, reservations are in jeopardy of being cancelled. So far, no one has reported actually having a reservation cancelled.

Additionally, there used to be several DVC'ers who were commercial renters who always advertised on eBay. We have noticed that these folks are no longer on eBay--their listings on eBay had been removed by eBay. It is likely that they were removed from eBay due to the use of copyrighted photos (they were actually using Disney's own photos in their eBay ads).

In addition, DVC is now enforcing (strictly, it seems) the one transfer policy (in or out, not one of each) per year. This will also curtail commercial renting activities, and more importantly, the morphing of points.

 

[rinkwide]

...Apparently, at least a few have already accepted and acquiesed to the "posturing" already presented.

Well, at least we can agree that it's merely posturing.

 

[bicker]

It isn't "merely posturing." Disney relies on the integrity of its guests, and in this case, members, to voluntarily comply with many of its rules and regulations. They're not aiming to formulate ways to sue the people they do business with -- they're trying to get those people to behave like reasonable people, and to stop exploiting every situation possible.

 

[dianeschlicht]

We addressed this question when we met with our guide yesterday before we left for home. He said they have certainly cancelled a lot of reservations and sent out a lot of letters. He did not say how much activity would trigger such a resonse, but I got the impression he didn't know the answer to that either.

 

[dumbo71]

He said they have certainly cancelled a lot of reservations and sent out a lot of letters.

CANCELLED????? I think he is mistaken. Even if they have cancelled ressies (which I highly doubt) I don't believe they would be telling guides about it.

My guess here and to be very clear I'm not suggestiong you made this up, I believe the guide heard about the letter and the THREAT of cancelled ressies and just leaped ahead and assumed some have had cancelled ressies.

Based on my experiences with actually receiving said letter and then a follow up coversation with Carli, I do not believe they have gotten that far yet. I think we are seeing the steps being taken. Warning first, if the offenders continue then cancelled ressies and suspended accounts. I also know for a fact some have received this letter in error.

I could certainly be wrong but with a board this size and with the detectives we have here I'm sure we would have heard something.

 

[dianeschlicht]

CANCELLED????? I think he is mistaken. Even if they have cancelled ressies (which I highly doubt) I don't believe they would be telling guides about it.

My guess here and to be very clear I'm not suggestiong you made this up, I believe the guide heard about the letter and the THREAT of cancelled ressies and just leaped ahead and assumed some have had cancelled ressies.

Based on my experiences with actually receiving said letter and then a follow up coversation with Carli, I do not believe they have gotten that far yet. I think we are seeing the steps being taken. Warning first, if the offenders continue then cancelled ressies and suspended accounts. I also know for a fact some have received this letter in error.

I could certainly be wrong but with a board this size and with the detectives we have here I'm sure we would have heard something.

I can only tell you what my guide told me. I can't verify if what he said is true.

 

[Doctor P]

Again, from the POS :

"Commercial purpose" shall include, but not be limited to, a pattern of rental activity by a Cotenant that the Association, in it's reasonable discretion, could conclude constitutes a commercial enterprise or practice.

And my point is that the notion of "commercial enterprise or practice" is not something as amorphous as some would like to believe. There IS guidance from statutes and administrative rules and case law on what constitutes a commercial enterprise or practice. This is not just a convenient phrase, IMHO. Lawyers and accountants are generally well aware of these factors, and those will likely be the people offering the guidance to DVC/DVC as to how to use that "reasonable discretion".

I'll just give you a couple to whet your appetite (not necessarily in order): 1) Are the rentals publicly advertised? 2) Does the person advertising hold themselves out as a commercial enterprise? 3) Pattern and persistence of activity. Given that the third one only involves DVC's own records, it may be the easiest place to start winnowing the field, recognizing that not everything that might appear to be commercial activity is actually commercial activity. But, if there isn't such a pattern OR persistence, they probably are saying that it is incidental and they won't being targeting those people (at least for now).

 

[RobDoc]

And my point is that the notion of "commercial enterprise or practice" is not something as amorphous as some would like to believe. There IS guidance from statutes and administrative rules and case law on what constitutes a commercial enterprise or practice. This is not just a convenient phrase, IMHO. Lawyers and accountants are generally well aware of these factors, and those will likely be the people offering the guidance to DVC/DVC as to how to use that "reasonable discretion".

I'll just give you a couple to whet your appetite (not necessarily in order): 1) Are the rentals publicly advertised? 2) Does the person advertising hold themselves out as a commercial enterprise? 3) Pattern and persistence of activity. Given that the third one only involves DVC's own records, it may be the easiest place to start winnowing the field, recognizing that not everything that might appear to be commercial activity is actually commercial activity. But, if there isn't such a pattern OR persistence, they probably are saying that it is incidental and they won't being targeting those people (at least for now).

I agree - it is not amorphous and is not a convenient phrase at all. It has a clear definition even though the specifics have not been published by DVC. The examples above are likely very important components of the definition and contribute to the analysis used to base any enforcement decision.

Very good summary!

 

[T.E. Yeary]

I had a strange thing happen to me last week. I was transferring some of my personal points into the account of a DVC member who was trying to get a ressie and because they had not yet closed on their resale were fearful of losing out. I made the transfer to their account and was then told to follow up with a letter to MS. I did so but I must admit was a bit annoyed about it! The crazy thing is, I did explain to them that the points would be put back into my account after their closing and I was doing it as a favor. They put me on hold for 15 minutes and then came back with the instructions about writing the letter. Some mighty strange things are going on!!! The heck of it is, I don't know if it's a good thing or not???? What are your thoughts???

Tom

 

[greenban]

I had a strange thing happen to me last week. I was transferring some of my personal points into the account of a DVC member who was trying to get a ressie and because they had not yet closed on their resale were fearful of losing out. I made the transfer to their account and was then told to follow up with a letter to MS. I did so but I must admit was a bit annoyed about it! The crazy thing is, I did explain to them that the points would be put back into my account after their closing and I was doing it as a favor. They put me on hold for 15 minutes and then came back with the instructions about writing the letter. Some mighty strange things are going on!!! The heck of it is, I don't know if it's a good thing or not???? What are your thoughts???

Tom

Hi Tom:

With the new rule/enforcement (depending on POV) of one transfer per mebership per use year, MS should have told you that your transfer can not be reversed. Your membership can not transfer out or in again until your next Use Year begins.

I think the transfer rule enforcement is overall a good idea as it will severely limit point morphing. Otherwise it will only hurt the 'average' DVCer. I still would prefer to see the point morphing loophole corrected in software, and a limit to point transfers of a multiple of points owned, say a maximum of 2 or 3 times the annual point allotment per contract/membership.

I still think even casual renting will become much harder, and probably not allowed in DVC - II or DVC - III, I may be wrong, but that is how I am reading the tea leaves right now!

-Tony

 

[dumbo71]

I can only tell you what my guide told me. I can't verify if what he said is true.

Diane,

I'm not questioning you in any way. I completely believe you were told of the cancelled reservations.

Your guide may be right, I just have doubts. Time will tell.

Disclaimer: part of my doubts with this is I've dealt with some extremely uninformed Guides. Luckily mine has been informed and upfront if nothing else.

 

[childsplay]

I guess my take on all of this is that DVC is finally weighing in on the rental issue (after years of sitting on the sidelines) which is a good thing as far as I'm concerned. They can apply pressure from a variety of angles (limiting transfers, tracking points, letters to owners, etc..) without ever having to actually define "commercial enterprise or practice". I think that most of us here have always fallen in line ideologically somewhere in the neighborhood with what Bicker said earlier about renting...and i think DVC's actions over the past several months have brought us closer to that.

 

[T.E. Yeary]

My biggest question was, have any of you been told to write a letter to MS when you make a transfer?????

Tom

 

[greenban]

My biggest question was, have any of you been told to write a letter to MS when you make a transfer?????

Tom

Yes, about 30% of the time, as transferring Owner I was asked to send an email, fax or letter to MS to confirm the transfer. However, the points were immediatley available to the person I transferred to, while MS awaited my confirmation.

Also about 25% of the time (in the past) when points were transferred to me, the Owner had to fax or email a written confirmation as well.

Now that we can only do one transfer a year (which should really cut down on the number of transfers MS has to do, I would expect most transfers to require a written confirmation to MS, since there will be fewer of them, with more MS Agents available to confirm, and/or track said transfers.

-Tony

 

[T.E. Yeary]

Thanks Tony! OK, I see this is a trend. I did ask about faxing or e-mailing and was told it had to be by the US mail?????????? I just wish there was a little bit more consistency in MS.

Tom