Tighter renting restrictions

[jctwizzer]

If I got notice my membership was cancelled, 99 chances out of 100, I'd know why.....because I violated some rule; which made it possible for that action....this won't happen in a vacuum. It would also mean I took the action even tho I knew termination was possible. The first question any decent lawyer is going to ask is "you knew it could lead to termination and you did it anyway"? Gives him really good grounds for a good case!!!! Good luck in finding a lawyer. Unless you care to pay a lawyer more than what you paid for the membership--which isn't too bright, but then your the one who took the action you knew was not permitted. Now, just an opinion, but
I think the initial action DVC might take would be to cancel the reservation that caused their reaction...after determining you had a history of transaction that violated policy .I don't see them terminating a membership as an first step. In which case you might be out $1000....still going to call a lawyer. Or bite the bullet and find an alternative. ??? Common sense will eliminate anything negative happening with a particular individual. And we all know common sense is abundantly evident in DVC members...We could go on discussing "what ifs" forever but nothing would come of it. With that in mind, think get off the subject and go do something productive....like work on my golf swing..

 

[RobDoc]

I think some things are getting twisted here. jctwizzer's comment was about LITIGATION. There is a big difference between contacting a lawyer and engaging in litigation. I certainly would find out what my rights are and options are, and perhaps have the lawyer send a letter, but a vigorous litigation is another story.

Actually, the original quote from jctwizzer was about POSSIBLE litigation and that was the basis for my comments. I would consider any contact by DVC legal as POSSIBLE litigation- especially if my ability to use my membership was being refused by MS.

I do agree that if you know you are renting as a commercial enterprise it might be fruitless to try to vigorously defend yourself thru the courts and you would already have a good idea what you had done wrong long before a court trial. We're not likely talking about Disney initiating any litigation - any "possible litigation" would need to come from those members whose membership had been adversely affected.

I disagree with any notion that "the dollar amounts involved don't warrent spending the money for a decent lawyer" since it will affect your ability to use your membership for the next 35 - 47 years. That would be a considerable amount of money and well worth trying to protect. Again, the "decent lawyer" would likely be needed to assist with the return of the membership right already lost.

As I already stated in this thread - "If I received a simple letter, I would merely call DVC myself to see what it meant - without legal counsel - but if I found that my ability to use my ownership was jeopardized I would have an attorney in a heartbeat. I consider the cost of ownership more than enough to justify a vigorous fight for ANY member injustly denied the ability to use that membership. " - and if that means I'm being "really anal about the situation" - then so be it.

To my knowledge, no members have actually been placed in that situation at this time and I feel that very few would meet that criteria. However, some have reported receiving a letter and at least one reported selling some of their contracts without ever contacting DVC to challenge the concerns suggested in the letter. I seriously doubt any members on this board would ever need to even contact an attorney regarding their membership since a simple phone call would likely resolve any misunderstanding regarding use of membership.

Again, the yet-to-be-answered question - if on Monday, you (personally) were denied the ability to make a reservation when calling MS would you just walk away from your membership or would you consider "possible litigation" if needed to to regain that right? How about "vigorous litigation" for your personal situation - or would you just allow your membership to terminate without any response on your part?

My real point with this is that because at least one member has reported selling contracts merely as a result of receiving the letter from DVC and without any followup inquiry sold some of their contracts - I feel it important to emphasize to others that just receiving the letter is not a reason to sell their membership.

I would suggest immediately contacting DVC to make sure the letter was intended for them, get an understanding what (if anything) DVC is concerned about and what (if any) consequences may result. Most likely, members will find that either the letter was in error or they exceeded some threshhold and can even explain what actually transpired. If and unless DVC does take action against the account (cancelling a reservation or locking the account) there would be no need to even contact legal counsel. If a DVC identifies what usage they are concerned about, the member can either heed the advice or continue the activity. If you still feel you are in compliance with DVC policy and some action is taken, I would feel that legal advice wold be warranted. If you know you are on the edge regarding compliance and wish to still challenge DVC's authority, then you will have to make a decision about the "value" of your membership and how far to challenge the system.

Personally, I know I will never recieve the letter and will have no need for any legal advice - but would not hesitate to call DVC if I did get such a warning.

 

[dumbo71]

My point with this is that because at least one member has reported selling contracts merely as a result of receiving the letter from DVC and without any followup inquiry sold some of their contracts - I feel it important to emphasize to others that just receiving the letter is not a reason to sell their membership.

Being the one who sold I have to say I totally agree with this. First step should always be to have a direct conversation with DVC.

My sale, was a result of a series of dissapointments combined with the letter. I no longer had confidence that I could comfortably add points until retirement and continue to rent. I also saw what I percieved to be a decline in WDW dining, service and cleanliness. I was on the fence anyway, honestly. The letter just gave me the final shove. It was also nice to get out while resales values were still high.

I still hold hope for the future of WDW and DVC. Time will tell. For now I still have 350 points at SSR so my foot is still in the door.

Doc has provided good advice. I'll answer his question since no one else will, Yes I would have taken legal action if my membership was suspended.

 

[3DisneyKids]

I have not owned long enough to have ever had even one rental transaction, so this does not apply to me currently. However, if my membership was somehow "frozen" yes, I would get legal representation. As far as litigation...there is no way a DVC contract issue would ever reach litigation. (I am not a lawyer, though I am a professor at a law school, so am more well-versed than the average non-lawyer).

 

[Dean]

Maybe the most damning evidence would be how someone represents their rental activity for tax purposes. The proceeds from renting should be taxable income. I had understood that for vacation properties you could deduct expenses (such as maintenance, mortgages, the costs of renting and advertising) as business deductions if you met certain tests. If those deductions are available for timeshare rentals, I would think a true commercial renter would want to take those deductions to reduce their taxes.

I don't know if those rules apply to timeshares [AND DO NOT TAKE THIS AS TAX ADVICE ] but that would be one way to prove that someone considered themselves engaged in commercial activity.

That's why I stated earlier that this was different than taxable issues. Using what's reportable for tax purposes would preclude renting at all. Thus being reportable and being "commercial" in this context are not the same and likely not even directly related.

 

[4Pluto]

My point was not that the rent was reportable. My point was that the deductions you take for your personal real estate (for your home and your second home) against your income are likely different than the deductions that someone who rents lodging as a business would be entitled to take against the income derived from renting out the lodging (for example, maintenance and the costs of renting) and likely reported on different schedules (which could show that the renter considered the activity to be a business activity). Someone out there may know if these deductions are available for renting timeshare for non-personal use.

 

[greenban]

After my conversations with Disney Compliance, I have decided to stop purchasing additional DVC to meet my goal of 5,200 points for personal retirement purposes. (The ebay auction was just me being me, I never expected to win it at $50.00 per point, I'm quite suprised how close I came!). I will wait to later in life to purdhase the final 'chunk' of points that I will need. Hopefully at CRV, but AKL will do in a pinch <grin>.

After discussion with my lawyer, I have decided that it is prudent to stop my rental activity significantly. As always, most of my points have been used for my employees as longevity rewards. I now inform MS when making ressies, that this ressie is for an employee, not a guest. When sending family (Thanksgiving this year), I also point out that my guest is family. These actions will suppossedly prevent my account being flagged. I have many ressies made before the 'crackdown' that are all fine, I have checked each one with MS, and for the future I will only rent a few 'extra' points to prior renters, who's names appear on my prior reservations.


I'm being proactive in this manner because I believe (with no concrete evidence) that the renting crackdown will continue and become much more restrictive, and I don't wish to jeopardize a major part of my retirement plans.

I too am not interested in picking a fight with an 800 pound, football owning gorilla!

-Tony

 

[starbox]

After my conversations with Disney Compliance, I have decided to stop purchasing additional DVC to meet my goal of 5,200 points for personal retirement purposes.

Just curious - how are you planning to retire with DVC?

 

[dumbo71]

After my conversations with Disney Compliance, I have decided to stop purchasing additional DVC to meet my goal of 5,200 points for personal retirement purposes. (The ebay auction was just me being me, I never expected to win it at $50.00 per point, I'm quite suprised how close I came!). I will wait to later in life to purdhase the final 'chunk' of points that I will need. Hopefully at CRV, but AKL will do in a pinch <grin>.

After discussion with my lawyer, I have decided that it is prudent to stop my rental activity significantly. As always, most of my points have been used for my employees as longevity rewards. I now inform MS when making ressies, that this ressie is for an employee, not a guest. When sending family (Thanksgiving this year), I also point out that my guest is family. These actions will suppossedly prevent my account being flagged. I have many ressies made before the 'crackdown' that are all fine, I have checked each one with MS, and for the future I will only rent a few 'extra' points to prior renters, who's names appear on my prior reservations.


I'm being proactive in this manner because I believe (with no concrete evidence) that the renting crackdown will continue and become much more restrictive, and I don't wish to jeopardize a major part of my retirement plans.

I too am not interested in picking a fight with an 800 pound, football owning gorilla!

-Tony

Tony,

Thanks for posting about this contorversial topic with your real life experiences.

Your posts not only validate what I posted some time ago, they also give people a reliable source. ( I'm reliable but to new to be trusted. )

Tom may have to close down his operation if you aren't adding on anymore. Seriously, I'm sure he'll be shedding a few tears if he reads this.

Prety sad really that in an effort to catch the ABUSERS (which are few and far between) honest guys like you get caught up in the web.

Fact of the matter is that by waiting until you retire to add a lump of points, it will cost you far more than if you gradually added on and rented in the interim.

Well, happy travels, Greenban.

p.s. You got a contract for $59/pp??? You are the man.

 

[drakethib]

I still wish we could find a copy of the "letter" so someone could post it.

If I was to get one of these letters and have not been renting to other, I would call Disney and talk with them. I think all would be well with a simple phone conversation. If not I would seek counsel and ask that the lawyer fees be added to the judgment.

If I would have been renting my points, I would just come come clean with Disney and stop.

If you have been renting and want to continue to rent unless you have Trump money and want a bunch of lawyers to get rich fighting DVC, I wouldn't fight it.

Take the money and invest it elsewhere. I think you can get a better return anyway.

JMHO

 

[T.E. Yeary]

Tom & Staff

 

[Dean]

My point was not that the rent was reportable. My point was that the deductions you take for your personal real estate (for your home and your second home) against your income are likely different than the deductions that someone who rents lodging as a business would be entitled to take against the income derived from renting out the lodging (for example, maintenance and the costs of renting) and likely reported on different schedules (which could show that the renter considered the activity to be a business activity). Someone out there may know if these deductions are available for renting timeshare for non-personal use.

if you rent, you can deduct any legitimate expenses including maint fees, long dist phone calls and the like. If you did it as true business, you could even deduct a second phone line or a portion of your high speed internet, possibly a home office, etc. It is reportable unless you qualify for the free 2 weeks rental under the condo rules, difficult for timeshare but possible it seems with DVC.

 

[Doctor P]

if you rent, you can deduct any legitimate expenses including maint fees, long dist phone calls and the like. If you did it as true business, you could even deduct a second phone line or a portion of your high speed internet, possibly a home office, etc. It is reportable unless you qualify for the free 2 weeks rental under the condo rules, difficult for timeshare but possible it seems with DVC.

Everyone should consult their own individual tax adviser. The rules are much, much more complex than this and need the attention of an individual's own tax professional.

 

[Dean]

Everyone should consult their own individual tax adviser. The rules are much, much more complex than this and need the attention of an individual's own tax professional.

For a casual renter who lists the income from the rental, the direct expenses like main fees, directly related phone calls and the like would be about as simple as any other itemized deduction. If one gets into deducting a home office, prorating or depreciating a computer and the like, I'd agree.

 

[Doctor P]

For a casual renter who lists the income from the rental, the direct expenses like main fees, directly related phone calls and the like would be about as simple as any other itemized deduction. If one gets into deducting a home office, prorating or depreciating a computer and the like, I'd agree.

Unfortunately, you are not correct about this for the average person. Once again, I suggest that any person contemplating any form of deduction consult an experienced tax professional. The rules for calculating the portion of these expenses that are deductible can trip up even a seasoned (but timeshare or rental inexperienced) tax professional. For example, only a portion of what DVC calls maintenance fees may be deductible, and that's even before you start considering the rental rules. Indeed, it is actually hard to imagine many people qualifying to deduct and even those that do will have documentation issues that are highly complex.

 

[Dean]

Unfortunately, you are not correct about this for the average person. Once again, I suggest that any person contemplating any form of deduction consult an experienced tax professional. The rules for calculating the portion of these expenses that are deductible can trip up even a seasoned (but timeshare or rental inexperienced) tax professional. For example, only a portion of what DVC calls maintenance fees may be deductible, and that's even before you start considering the rental rules. Indeed, it is actually hard to imagine many people qualifying to deduct and even those that do will have documentation issues that are highly complex.

I disagree. Only a portion of the fees are deductible as an owner, but the entire fee would be deductible that applies to the rental. Say you rent 100 points, you'd be able to deduct the full fees on 100 points for that year against the rental income. Unless one seeks to qualify as a home business, it is not as complicated or difficult as you would like to think.