Why do the Rentals really matter?

[Disney Doll]

Thanks for explaining. My only concern is, if we plan to book our vacations during holidays--would it be better to buy at SSR, a larger resort, increasing our luck at receiving a ressie? I am leaning towards BWV but it seems to be one of the smaller DVC properties. Thanks again.

BWV is a fairly good size property.

BCV is somewhat small.

 

[Island_Lauri]

It seems to me that the spirit of DVC is making a profit by providing people with nice accomodations. I don't see the difference between DVC doing it and a commerical renter doing it. Is the notion that if people couldn't rent their points out they would instead go into breakage therefore benefiting the community at large at the expense of the one? The OP's friend booked her vacation well in advance of 60 days. That means (according to the explanations provided) that DVC is doing exactly the same thing a commerical renter does...reserving space during prime times so they can rent it out for prime money...well in advance of the sixty day mark.

It would be interesting to be able to watch the waitlist to see if there is a sudden flood of availability in late September if DVC gave up on trying to rent out prime time so that they could sop up owner points instead. That would be just in time for most people to get cheap(er) airfare and to simultaneously prevent them from taking their christmas vacation dollars to another location.

Oh and...it doesn't appear that renting is affecting DVC's ability to rent units out at very high prices.

If the reservation is more than 60 days out -- unless DVD is breaking their rules -- they are renting from their own inventory and not from member inventory* and that is the difference.

*Or DVD is using points from an owner (of that particular resort) who has traded their points for a cruise or something else. Then I would expect DVD to use those points for a reservation on a first come, first serve basis - as in if someone wants a stay in June, they can get a June reservation or if they want a Christmas reservation, they get one.

But this is different than 'commerical renting' which is booking the most 'valuable' time (i.e. peak) and selling it to the highest bidder.

 

[Deb & Bill]

It seems to me that the spirit of DVC is making a profit by providing people with nice accomodations. I don't see the difference between DVC doing it and a commerical renter doing it. ....

When DVC rents out our points (so we members can go on the cruise or stay at the GF Concierge or whatever we are trading out for), they need to make the money back on what they bought for us. The money from DVC renting doesn't go into DVC pockets. It goes into maintenance, upkeep, salaries, whatever. If they can keep the building maintained, the employees paid and all our services, plus negotiate good rates for trading out AND our dues don't go up, they have done us a service.

When the commercial renter does the same, all the money goes into their pocket. And they tell the non-member that they can bring a sleeping bag (or two) and put a few more people in the room.

 

[Dean]

Actually, Lisa understands it just fine.

The issue is not whether Disney had availability -- the Disney inventory and the DVC points inventory are two separate inventories.

The issue is why OP can't get a points ressie.

If the reason they can't is cheating in the system, that is cause for them to be concerned by abuse in the system.

Only true for Developer inventory at SSR. The rest is exactly the case where Disney is reserving time with points and renting it, assuming more than 60 days out. At times that ends up being higher demand time they do rent out. Thus they are in direct competition with the members. Such is the case when a member trades their points for a cash equivalent option such as DCL. Overall this likely has a FAR greater effect than even the most malignant of private renters. So anyone who trades points is taking away weeks as are those who rent out. And DVD/DVC has an unfair advantage in the reservation process making it likely a far more important issue.

 

[doubletrouble_vb]

Perhaps it would be in the best interests of the DVC community to ban trading out so that all those cruise line weeks or trips to hawaii remain in the DVC community where they belong. After all most members probably don't trade out or trade out only rarely. That way we wouldn't have to worry about Disney renting out prime time to pick up the slack.

Disney IS making a profit on the rentals. DVC may not be but Disney has to be via any services they provide to DVC. Cruises for example! Hotel point rentals to members Christmas week when they've been locked out of using points inside of DVC.

I can't see demonizing the commercial point renters and annointing Disney with pixie dust for engaging in the same practice. Especially since Disney screwed things up in the first place by not managing the points properly for transfers.

 

[mochabean]

Only true for Developer inventory at SSR. The rest is exactly the case where Disney is reserving time with points and renting it, assuming more than 60 days out. At times that ends up being higher demand time they do rent out. Thus they are in direct competition with the members. Such is the case when a member trades their points for a cash equivalent option such as DCL. Overall this likely has a FAR greater effect than even the most malignant of private renters. So anyone who trades points is taking away weeks as are those who rent out. And DVD/DVC has an unfair advantage in the reservation process making it likely a far more important issue.

This is exactly my point - DVC has access (through members trading out) to a great number of points which it is apparently using to book prime weeks for rent. It seems likely that DVC does this to a much greater extent than any commerical renter. Thus I put DVC in the same category as commerical renters - they both book prime weeks to rent for cash to make a large profit.

And while the commerical renters doing it doesn't benefit the DVC community, I will argue that DVC doing it doesn't benefit the DVC community either. It does benefit the people who trade out - by making more money off their points, they can lower the point requirements for trades. But again this only benefits those who trade out, not the entire DVC community. Personally, since I don't trade out, I would prefer DVC reserve and rent out time in the slow season and raise the point requirements for trading out. This way more prime weeks would be open to DVC members.

 

[Dean]

This is exactly my point - DVC has access (through members trading out) to a great number of points which it is apparently using to book prime weeks for rent. It seems likely that DVC does this to a much greater extent than any commerical renter. Thus I put DVC in the same category as commerical renters - they both book prime weeks to rent for cash to make a large profit.

And while the commerical renters doing it doesn't benefit the DVC community, I will argue that DVC doing it doesn't benefit the DVC community either. It does benefit the people who trade out - by making more money off their points, they can lower the point requirements for trades. But again this only benefits those who trade out, not the entire DVC community. Personally, since I don't trade out, I would prefer DVC reserve and rent out time in the slow season and raise the point requirements for trading out. This way more prime weeks would be open to DVC members.

To give the other side. I don't believe DVC is preferentially renting out high demand times overall. I think their TRYING to minimize the impact of the points they do rent out through CRO. But it's such a number of points that it can't but help to affect members availability. I found this quote interesting from Fl statues 721.

A managing entity shall have breached its fiduciary duty described in subsection (2) in the event it enforces the denial of use pursuant to paragraph (b) against any one purchaser or group of purchasers without similarly enforcing it against all purchasers, including all developers and owners of the underlying fee or underlying personal property;

 

[mochabean]

I found this quote interesting from Fl statues 721.

Sounds like cancelling ressies made by renters could be illegal.

 

[RobDoc]

To give the other side. I don't believe DVC is preferentially renting out high demand times overall. I think their TRYING to minimize the impact of the points they do rent out through CRO. But it's such a number of points that it can't but help to affect members availability. I found this quote interesting from Fl statues 721. "A managing entity shall have breached its fiduciary duty described in subsection (2) in the event it enforces the denial of use pursuant to paragraph (b) against any one purchaser or group of purchasers without similarly enforcing it against all purchasers, including all developers and owners of the underlying fee or underlying personal property;"

I don't see where that quote affects the reservations rented thru CRO - created by points "used" by members for other options. The POS certainly makes clear that members are at a significant disadvantage when trying to rent their points. As Dean already stated, DVC only has developer inventory at SSR at this time. The reservations rented more than 60 days in advance are on behalf of members and the rental "disadvantage" is created by and on behalf of the membership itself.

 

[minnie61650]

But there are very few people who actually do this. Availability is tight because unless you book 11 months out, everyone who does not own Boardwalk or Beach Club will grab them the second they can. Disney constantly adds more points to the system with their offers and that allows more people to be in the mix so...add Saratoga Springs into the mix and their incentives and availability is much harder.

There is no balance to this system by definition! How do you balance them constantlt adding more points and the ability to borrow, bank and use current. It becomes a question of the person who plans earliest gets what they want.

Renting does not hurt anyone at all. Disney wins, The renter wins and the owners win.

I would venture to say the owner who rents a DVC for profit is the biggest winner of all. I bet most of them do not even declare the profit as income.

I also think owning large numbers of points to rent for out for profit really hurts the average DVC owner who owns for their own pleasure.

JMHO

 

[Dean]

I don't see where that quote affects the reservations rented thru CRO - created by points "used" by members for other options. The POS certainly makes clear that members are at a significant disadvantage when trying to rent their points. As Dean already stated, DVC only has developer inventory at SSR at this time. The reservations rented more than 60 days in advance are on behalf of members and the rental "disadvantage" is created by and on behalf of the membership itself.

A large part of the CRO rentals are points rentals for cash equivalent exchanges and breakage inventory. Both of which would fall under the statues I quoted above as I understand it. And it might even fall under the transfer rules depending on how the transactions are being handled. The POS quote about being at a disadvantage would not supersede any regulations under statues such as 721. In any conflict between the POS and the FL statues, the statutes would be the final test.

 

[Sammie]

Sounds like cancelling ressies made by renters could be illegal.

I don't think DVC would cancel the reservations of the Renters but stop the process much early on.

If you read the entire Fl. Statues 721, instead of just one small portion, I don't see that this has anything to do with this particular situation and more to do with action against delinquent purchasers.

I am sure DVC checked all the legal aspects prior to the release of the email, as to what their legal rights were.

 

[RobDoc]

A large part of the CRO rentals are points rentals for cash equivalent exchanges and breakage inventory. Both of which would fall under the statues I quoted above as I understand it. And it might even fall under the transfer rules depending on how the transactions are being handled. The POS quote about being at a disadvantage would not supersede any regulations under statues such as 721. In any conflict between the POS and the FL statues, the statutes would be the final test.

Perhaps, but the small portion of 721 conveniently chosen for the quote pertains to owners who are delinquent in paying their annual fees and is in regards to the "managing entity's" right to rent the time (points) of the delinquent purchaser. Suggesting that it refers to someone involved in violating the "commercial purpose" issue is a bit of a stretch as that is not mentioned at all in the 721 document. Used in the context of the document, the quote covers an entirely different and specific topic outlining the responsibilities of the "managing enitity" and it's "fiduciary responsibility" to the "purchasers"- stating it has the option of renting out the time of any "delinquent purchaser" after due notice. If you are including "commercial purpose" renters in the "delinquent purchaser" category then I would agree that DVC has the responsibility to treat all "delinquent purchasers" the same, but I'm not convinced that "commercial purpose" renters would be included in the same category as "delinquent purchasers".

That same section goes on to state in Section (6) (a): " The managing entity of any timeshare plan located in this state, ..., may deny the use of of the accommodations and facilties of the timeshare plan, including the denial of the right to make a reservation or the cancellation of a confirmed reservation for timeshare periods in a floating reservation timeshare plan, to any purchaser who is delinquent in the payment of any assessments made by the managing entity against such purchaser for common expenses or for ad valorem real estate taxes pursuant to this chapter ..."

Section (6) (b) states:"(b) A managing entity desiring to deny the use of the accommodations and facilities of the timeshare plan to a delinquent purchaser and to those claiming under the purchaser, including his or her guests, lessees, and third parties receiving use rights in the timeshare period in question through a nonaffiliated exchange program, shall, no less than 30 days after the date the assessment is due in accordance with the timeshare instrument, notify the purchaser in writing of the total amount of any delinquency which then exists, including any accrued interest and late charges permitted to be imposed under the terms of the timeshare plan or by law and including a per diem amount, if any, to account for further accrual of interest and late charges between the stated effective date of the notice and the first date of use. The notice shall also clearly state that the purchaser will not be permitted to use his or her timeshare period, that the purchaser will not be permitted to make a reservation in the timeshare plan's reservation system, or that any confirmed reservation may be canceled, as applicable, until the total amount of such delinquency is satisfied in full or until the purchaser produces satisfactory evidence that the delinquency does not exist."

The statute later includes the quote chosen by Dean. None of these quotes specifically deal with the enforcement of a "pattern of rental activity" and none of them require DVC to do anything except take required fiduciary steps to collect delinquent fees. Those steps include cancelling reservations providing all delinquent purchasers get the same treatment (Dean's quote).

721's comments about the "managing entity" is pertinent to renting the time of "delinquent purchasers" to recover the delinquent fees and does not appear to limit other rental activity by management.

Interesting read, but nothing here that specifically addresses any lack of ability to enforce the "commercial purpose" clause.

 

[Dean]

Perhaps, but the small portion of 721 conveniently chosen for the quote pertains to owners who are delinquent in paying their annual fees and is in regards to the "managing entity's" right to rent the time (points) of the delinquent purchaser. Suggesting that it refers to someone involved in violating the "commercial purpose" issue is a bit of a stretch as that is not mentioned at all in the 721 document. Used in the context of the document, the quote covers an entirely different and specific topic outlining the responsibilities of the "managing enitity" and it's "fiduciary responsibility" to the "purchasers"- stating it has the option of renting out the time of any "delinquent purchaser" after due notice. If you are including "commercial purpose" renters in the "delinquent purchaser" category then I would agree that DVC has the responsibility to treat all "delinquent purchasers" the same, but I'm not convinced that "commercial purpose" renters would be included in the same category as "delinquent purchasers".

That same section goes on to state in Section (6) (a): " The managing entity of any timeshare plan located in this state, ..., may deny the use of of the accommodations and facilties of the timeshare plan, including the denial of the right to make a reservation or the cancellation of a confirmed reservation for timeshare periods in a floating reservation timeshare plan, to any purchaser who is delinquent in the payment of any assessments made by the managing entity against such purchaser for common expenses or for ad valorem real estate taxes pursuant to this chapter ..."

Section (6) (b) states:"(b) A managing entity desiring to deny the use of the accommodations and facilities of the timeshare plan to a delinquent purchaser and to those claiming under the purchaser, including his or her guests, lessees, and third parties receiving use rights in the timeshare period in question through a nonaffiliated exchange program, shall, no less than 30 days after the date the assessment is due in accordance with the timeshare instrument, notify the purchaser in writing of the total amount of any delinquency which then exists, including any accrued interest and late charges permitted to be imposed under the terms of the timeshare plan or by law and including a per diem amount, if any, to account for further accrual of interest and late charges between the stated effective date of the notice and the first date of use. The notice shall also clearly state that the purchaser will not be permitted to use his or her timeshare period, that the purchaser will not be permitted to make a reservation in the timeshare plan's reservation system, or that any confirmed reservation may be canceled, as applicable, until the total amount of such delinquency is satisfied in full or until the purchaser produces satisfactory evidence that the delinquency does not exist."

The statute later includes the quote chosen by Dean. None of these quotes specifically deal with the enforcement of a "pattern of rental activity" and none of them require DVC to do anything except take required fiduciary steps to collect delinquent fees. Those steps include cancelling reservations providing all delinquent purchasers get the same treatment (Dean's quote).

721's comments about the "managing entity" is pertinent to renting the time of "delinquent purchasers" to recover the delinquent fees and does not appear to limit other rental activity by management.

Interesting read, but nothing here that specifically addresses any lack of ability to enforce the "commercial purpose" clause.

We read it somewhat differently but as a minimum, it establishes the precedent that developers and management companies are held to the same standards as other owners when dealing with units of the coop.

 

[Chuck S]

But let us not forget, the POS, which specifically gives Disney the right to rent points turned in for other venues and those units that fall under the 60 day breakage rule were reviewed by and approved by the State of FL, and any other state where DVC is licensed to sell. Would whatever board oversees timeshare sales in FL give approval to a POS they felt violated state timeshare statutes? Kind of doubtful.

 

[RobDoc]

We read it somewhat differently but as a minimum, it establishes the precedent that developers and management companies are held to the same standards as other owners when dealing with units of the coop.

I'm not sure what we're reading differently because the quote you provided deals specifically with the fiduciary responsibility of the managing entity to try to collect funds owed by "delinquent purchasers" and simply states that all "delinquent purchasers" must be treated the same. Unless the "managing entity" is somehow a "delinquent purchaser" they are not included (along with all other purchasers in good standing) in that directive.

The precedent established has a specific responsibility and does not deal with cancelling reservations for other reasons. It does clearly define the responsibility of management to provide 30 days notice before cancelling any reservations held by "delinquent purchasers".