Tighter renting restrictions

[bavaria]

Tom, you didn't need to send anything when you transferred points to me last year I take it; I then transferred a few points to someone and was told that I would need to send an email. Then I got an email response saying 'thank you - but the email was not necessary in order to do the transfer'

of course, that was all before the 1x/year rule came into place

 

[dianeschlicht]

It almost sounds a bit like they are trying to track "point laundering" much like you would track money laundering.

 

[T.E. Yeary]

This is the first time it has happened to me, that's why I was so surprised. I shouldn't make a big deal out of it. I just hate snail mail!! LOL I really got the impression they didn't believe me when I told them what I was doing but who knows what kind of stories they hear on a day to day basis.

Tom

 

[Dean]

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.

DVC hasn't published their rule or definition, how could one know to police themselves without the ground rules?

 

[Dean]

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).

Any legalities pertaining to tax issues or a business per se would not necessarily apply. In this case there is clearly the legal right to rent so where to draw the line is the question. And given the nature of the situation, I don't think anything outside the timeshare or condo statutes and case law DIRECTLY associated will have any bearing. I am not aware of any other timeshare that allows an owner to rent but limits that ability beyond the limits of the timeshare use otherwise. IMO, this is a fairly unique situation. The only applicable case law I'm familiar with that applies at all to this issue is that of a developer who tried to limit owners of a condo complex from doing short term rentals and to only allow longer term leases while at the same time doing shorter term rentals themselves. As I understand it, the courts found in favor of the owners and against the developer finding that the rules had to apply to all equally.

 

[Dean]

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

Tom

The rules for transfer has always been for it to be in writing. As a rule, they've tried to enforce it from what I've seen though overall they seem to be as hit or miss on this as anything else they do. The rules don't say what type of writing I don't think.

 

[bicker]

1) Are the rentals publicly advertised? 2) Does the person advertising hold themselves out as a commercial enterprise? 3) Pattern and persistence of activity.

I agree with Doc that this is a great summary of the criteria. Note that listing DVC reservations on eBay three times would qualify under all three tenets.

 

[bicker]

DVC hasn't published their rule or definition, how could one know to police themselves without the ground rules?

In the OP, the OP indicated clearly that DVC has announced that they are cracking down on renting. Reasonable people will rent points only when they're sure that their rental activity is explicitly non-commercial. People who are generally exploitive will equivocate and rationalize their commercial rental activity, regardless.

 

[childsplay]

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

Tom

I have only done one transfer, and yes they did want me to write down the details and send it them, I used email however...but i agree that as with someother things MS does, it is hit or miss.

 

[dumbo71]

I agree with Doc that this is a great summary of the criteria. Note that listing DVC reservations on eBay three times would qualify under all three tenets.

If that is the criteria then I was a "commercial renter". I would have qualified into all of those categories. I did rent in public and each and every year.

What about the 20 rentals per year? I still believe there is some validity to that number and DVD is going after the big players........... except when they make a mistake.

 

[bicker]

Twenty is just an arbitrary number. In general (i.e., not just related to DVC rentals), a pattern can be as few as three instances of something. I suspect if a number is going to be a definitive qualification as a minimum, then that number would be closer to three than the twenty.

 

[rinkwide]

...Reasonable people will rent points only when they're sure that their rental activity is explicitly non-commercial...

Well, I don't think any of us wants to be unreasonable but it's hard to be that sure when there are practically no guidelines. Maybe we should just post our intended point usage for approval by the authorities here on the boards so we could be certain.

 

[Dean]

In the OP, the OP indicated clearly that DVC has announced that they are cracking down on renting. Reasonable people will rent points only when they're sure that their rental activity is explicitly non-commercial. People who are generally exploitive will equivocate and rationalize their commercial rental activity, regardless.

How can one be sure if DVC does not say what their guidelines are. The only info we've seen is that some have been told it's 20. Plus I disagree with you idea that reasonable people won't rent at all which is the only way to be certain given your definition of commercial. Twenty wasn't arbitrarily chosen, whether it's truly accurate remains to be seen.

 

[JudyS]

Lots of interesting posts here! I agree that unless Disney explicitly tells members what is allowed and what isn't, it's going to be very hard to tell what is within the rules or not.

Dean, I haven't been on this board much lately. Can you tell me where you heard that 20 rentals per year is the rule? Was it on another thread here somewhere?

 

[tor]

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

This would be simple to stop. All DVC needs to do is not allow name changes on reservations. The owner wouldn't know who to make the reservation for until it is sold on EBAY and then needs to change the name at that point DVC should cancel the reservation and make them rebook. All canceled reservations should then go to the waitlist first.

 

[hematite153]

This would be simple to stop. All DVC needs to do is not allow name changes on reservations. The owner wouldn't know who to make the reservation for until it is sold on EBAY and then needs to change the name at that point DVC should cancel the reservation and make them rebook. All canceled reservations should then go to the waitlist first.

That's a good idea.

Except, sometimes a person might book a vacation before they are sure which family members are coming.

What about requiring that ONE name on the initial reservation be identified as fixed but allow changes to the other names on the reservation?

 

[Dean]

Lots of interesting posts here! I agree that unless Disney explicitly tells members what is allowed and what isn't, it's going to be very hard to tell what is within the rules or not.

Dean, I haven't been on this board much lately. Can you tell me where you heard that 20 rentals per year is the rule? Was it on another thread here somewhere?

I've heard that number from 2 different sources. One from a member on this board, he can speak up if he wants, who apparently talked directly to DVC legal and was given this information. The other came independently from another source but was also second hand.

 

[Dean]

That's a good idea.

Except, sometimes a person might book a vacation before they are sure which family members are coming.

What about requiring that ONE name on the initial reservation be identified as fixed but allow changes to the other names on the reservation?

I don't see how they could do that. I don't see how they could limit by name in any way. There certainly are a lot of rules they could institute such as minimum stays and fees for multiple reservations, cancellations and changes, etc. Most would likely hurt members overall more than anyone who was heavy into renting but could be effective secondarily in controlling rentals. The reality is that the system is what it is and other than something we're looking at here which probably only affects a half dozen or so people, there's not much else that can reasonably be done that would also be reasonable for the membership as a whole. Personally I think it's nuts for anyone to have bought points with the main reason as renting. The risk does not and never has justified the return. And as the price goes up and the terms decrease, the models shifts more and more away from renting as being a viable alternative other than for those trying to do so temporarily or for exchange options.

 

[rinkwide]

...as the price goes up and the terms decrease, the models shifts more and more away from renting as being a viable alternative...

I hope you're right but I just can't see how this issue will simply resolve itself.

Maintenance fees are going to increase over the coming years but not enough to make renting unattractive. In fact, when I consider the future and think about the potential volume of outstanding points combined with outrageously expensive on-site deluxe room rates it makes me think we could very well be headed toward a rent-for-profit explosion. This would surely be perceived as a threat to booking revenues and you know Disney would try and take more drastic measures to discourage rental practices.

And that's fine, what they ought to do is scale back membership sales (ha, that's funny) but instead they're likely to escalate their current course of action which utilizes intimidating notices and threats, something I consider to be a misguided attack on member's rights. I say 'misguided' because, in my opinion, DVD is using regulatory language, that was originally designed to protect the membership, for it's own self-serving purposes (all in the name of protecting "personal" use). If their bullying tactics should lead to actual cancelled reservations I suspect they'd face a legal challenge - something Disney would be reluctant to get involved in as the court would, I think, allow much latitude in favor of ownership rights.

Beyond that, I can't really envision how things might play out but it's sort of reminiscent of that Matthew Broderick movie War Games where a super-computer runs through every possible nuclear war strategy only to find there are no winning outcomes.

Heck, while were on a roll...

Personally, I don't think Disney is really cut out for the large-scale timeshare business.

DVC was the shining ray of light on the post 9/11 Disney balance sheet. Members were good for huge up-front profits and their visiting habits seemed unfazed by the apparent nationwide travel depression. I think that spurred Disney to over-build and over-sell this particular division without thoroughly considering the long-term consequences. It's my opinion that, over a longer period of time, on-site Disney property is simply too valuable to sell off in any form, even a right-to-use. But you know that the enormous cash windfall is just too tantalizing for them to pass up and they can probably rationalize that if there were no DVC people would simply buy off-property instead. I'm guessing it's all going backfire a bit 10-20 years down the line when they don't have the complete and total control of the resorts like they are used to.

It's a jagged little pill, the fact that members are legally allowed to rent their villas, and I know Disney would rather live in denial but they need to accept the fact that there are pluses and minuses to being in the timeshare business. Right now the whole thing seems like a growing snowball that's nowhere near the bottom of the hill.

Of course this is all speculative rambling and I could be way, way off. It might be that members are reasonable people who will rent points only when they're sure that their rental activity is explicitly non-commercial.

 

[dumbo71]

I've heard that number from 2 different sources. One from a member on this board, he can speak up if he wants, who apparently talked directly to DVC legal and was given this information. The other came independently from another source but was also second hand.

I'm one of the sources he mentions. The other is a friend of Beca.

My letter from DVC did not state 20 rentals in a year. When I finally got a response from DVC about this letter that 20 rental number was specifically mentioned. Now I heard it first hand and Beca had a friend who was also told this number via the letter. Take that for what it is worth.

In the beginning I did not buy that arbitrary 20 number. I knew that I had only had 20 -25 rentals over a twelve year period. So therefore the fact that I received that letter told me otherwise. When I finally got a response from DVC it ended up that the letter I received was in error.

Now, who knows what to believe anymore. I'm just glad I no longer rent points. It seems DVD can bend the rules to suit their agenda of the moment and that should make ALL members nervous, not just the renters.