Would you join a lawsuit against DVC to stop/revert the 2020 reallocation?

[Dean]

It sells you a percent of a very specific unit which is what is on your title. That unit is typically made up of a number of rooms. My argument has always been that because I own a percent of a unit, I should always be able to book that percent of the unit in the year. Points can not be reallocated across units otherwise DVC is changing my ownership.

The POS spells out that points are simply a symbolic representation of what you own. It's clear in the POS that points owned are not tied to points to reserve that "unit".

 

[KAT4DISNEY]

But that argument makes little sense in the concept of DVC's flexible point system.

Using that thought - "does it make sense" - does it make sense for the management company to increase points required for booking units beyond what is sold? Does it make sense that timeshare regulations would actually agree with that if they had chosen to address point systems when they talk about one to one use for weeks? Especially when those points are tied to a percentage of ownership that is tied to a unit which are the underlying components of the resort?

We can go back and forth on all of this - legal, ethical, Disney standards, timeshare sleeze. With nothing more than a "it's just fine, believe us" or "it's proprietary and we won't tell you" there remains doubts about the reasons they are about to do what they say they will in the 2020 point charts. Most visible to me is the potential gain they, the Management Company who makes the point charts, can make from this reallocation. Past reallocations it was certain owners that won and other owners that lost. This also has that - but then it also has the management company appearing to win pretty big.

 

[Cyberc1978]

I know some participants in this thread wrote to DVCMC did anyone ever receive a reply, is so what did they explain?

 

[mrsap]

My DH called the day this was announced. All the woman kept saying was ‘she’s so sorry’ and ‘she’ll make sure our comments get to the proper people.’

 

[mab2012]

For all the wrangling over the interpretation of the language in the contract or even the legislation, I'm not sure any of it actually matters.

I'll start with the standard "I am not a lawyer" disclaimer. My grasp of the law is no better than any other educated layman. But what I do know is this: contract law (civil law in general) is not a black or white thing. When a civil case is considered, it's rare that any party is wholly in the right or wholly in the wrong. Any judgement in the case will be based on the balance of all factors under consideration, and intent matters, at least to some degree. Further, even if one party IS found to be in the wrong, the wronged party must be able to show an actual loss (damages) in order to be awarded compensation. US courts are rather quicker than most to award punitive damages, but even then punitive damages are hard to argue without some clear financial or emotional damage.

So let's assume that the strict interpretation of the POS that would disallow reallocations outside of a single unit is correct. And let's further assume that a court agrees with that interpretation, and finds DVCMC to be in breach of that particular clause of the contract. That factor is not going to be considered in a vacuum. DVCMC is going to argue that they were acting in the best interest of the membership, both in past and current reallocations, and in accordance with their obligation to balance demand across units. And even if the judge doesn't agree that the "best interest" argument justifies the breach of the reallocation clause, there's still the question of damages. To the extent that reallocations are neutral, it's very simple to show that there are no damages across the membership as a whole.

Now suppose that the membership could in fact prove that DVCMC is acting in their own best interest, or even further, in Disney's best interest, and thus had failed in their fiduciary duty to the membership. Given that DVCMC is in a clear conflict of interest position, I suspect a judge could look upon this very unfavourably indeed. This is where very substantial punitive damages might be imposed, not to mention the bad press. It's this, more than anything else, that leads me to believe that there is probably not anything nefarious going on with the reallocation, even if we can't guess at the full explanation. Disney knows perfectly well that DVCMC is in a conflict of interest, and they also know perfectly well how badly it might go for them if DVCMC were to abuse that position. So I suspect they're actually quite careful not to do anything that wouldn't hold up to close scrutiny. Not because they're our best friends and the thought of screwing us over would never even occur to them, but out of a healthy sense of their own self-preservation. To that extent, their own best interest actually aligns perfectly with ours.

So in the end, I think the only thing that really ends up mattering is whether DVCMC can show that they are, in fact, putting members' interests first. And I would guess that they (and their giant legal department) have a pretty rock-solid argument for why that's true, even if they're not choosing to share it.

All that said, I'm really glad we're having this conversation, and it's not my intent at all to be dismissive of anyone's concerns, or suggest that they're unfounded. It's exactly this sort of discussion that will keep Disney accountable, and it's important to keep ourselves as informed as possible. Thanks @zavandor for starting it, and to all who have contributed.

 

[mab2012]

Here's why I'm having a hard time getting too worked up over the lock-off premium:

At resorts that have both dedicated and lock-off studio and/or 1BR units, there is no difference in booking cost between the dedicated and lock-off units. That is, the point cost of a lock-off is directly tied to the point cost of a dedicated unit of the same size, which is itself subject to the neutral reallocation rules. I'm not up-to-date on the configurations at all resorts, but from what I've read in this thread, it seems that most resorts do have some dedicated studio and/or 1BR units. As I understand it, the exceptions are SSR and GVF. At SSR, the studio and 1BR point costs are roughly inline with the costs of similar units at other resorts. This was true both before and after the 2020 reallocation. GVF runs higher in general, but even there the studio and 1BR costs relative to the 2BR cost seem to be close to the proportions found at other resorts (I haven't added them all up, but if anything, the lock-off premium at VGF looks a bit lower overall than SSR).

As long as this remains true, I don't see any real reason to worry that the lock-off premium could grow uncontrolled. Essentially, the premium at most resorts is directly limited by the reallocation rules, and those resorts that don't have dedicated smaller units appear to just be following the trend. If you can argue that a dedicated studio plus a dedicated 1BR need not equal a dedicated 2BR at resorts that have them, then the same argument (presumably based on demand) can equally be applied to resorts that have only lock-offs.

Incidentally, I've seen several mentions of the handful of cases at SSR where a 2BR standard view unit is cheaper than a 1BR preferred unit in the same season, but a quick perusal of the point chart shows that the same is true (or nearly so) at other resorts in 2020. In particular, at AKV a 2BR standard is cheaper than a 1BR savannah view on weekdays in Adventure, Choice, and Dream (and only marginally more expensive on weekends and in Magic season). 2BR standard is cheaper than 1BR MK view at BLT almost across the board, and at BWV the 2BR standard cost is within 5 points/night of the 1BR preferred view for most nights. Just more evidence that SSR's smaller unit costs don't appear to be disproportionate to other resorts.

 

[skier_pete]

Incidentally, I've seen several mentions of the handful of cases at SSR where a 2BR standard view unit is cheaper than a 1BR preferred unit in the same season, but a quick perusal of the point chart shows that the same is true (or nearly so) at other resorts in 2020. In particular, at AKV a 2BR standard is cheaper than a 1BR savannah view on weekdays in Adventure, Choice, and Dream (and only marginally more expensive on weekends and in Magic season). 2BR standard is cheaper than 1BR MK view at BLT almost across the board, and at BWV the 2BR standard cost is within 5 points/night of the 1BR preferred view for most nights. Just more evidence that SSR's smaller unit costs don't appear to be disproportionate to other resorts.

I had noticed this as well - and thought the argument wasn't very strong as that it's a bad thing. I think the reason it hurts the most is that the "Preferred" areas of SSR are (a) 40% of the resort and (b) not really all that better than the standard areas. Unlike AKV, BWV, and BLT where you are paying that premium stake for a vastly improved view, SSR all you get better is a little closer to the main building or DS. (And OK, I would admit that at BWV, the "Standard" and "Garden" view rooms are barely a difference as well.) For those like me and DW who could care less what's outside the window of our room - I actually PREFER that these resorts have a cheaper option, and it's one thing I look at in buying at resorts.

In the "no one cares but me" category - when I ran the numbers for what we want to get out of our 75 BWV points - 5 nights every year in Oct/Nov F&W season - the preferred/Boardwalk view rooms we went from being 76 points (1 point short) to 82 points (7 points short), but standard rooms went from 54 points (21 excess) to 59 points (16 excess) So even though the difference between the two barely changes (22 vs 23) the need to borrow extra points makes the appeal for standard view just became greater to me. Now i just need to battle for the room category every year.

 

[KAT4DISNEY]

As I understand it, the exceptions are SSR and GVF. At SSR, the studio and 1BR point costs are roughly inline with the costs of similar units at other resorts. .

Resorts with no dedicated studios and 1BR's are more numerous than your understanding. OKW, VB, HHI, SSR, AKV-Kidani, BLT, VGC, Aulani and VGF. Leaving Kidani out because of Jambo it's 8 of the 14 resorts. Another note is that 3 of these rank in the top 4 for largest resorts. SSR alone has 432 2BR lockoffs compared to 241 dedicated studios and 197 dedicated 1BR's in the 5 resorts that have those unit types. Those resorts with dedicated studios and 1BR's also have 484 2BR lockoffs. So those that may have increase controls in place don't offset much more than 1 resort that doesn't.

BWV, VWL, BCV, AKV-Jambo and CCV have dedicated studios and dedicated 1BR's. 5 of the 14

And then there's PVB.

Others also mentioned that there were locations other than SSR that have the 2BR/1BR overlap. BLT and AKV are 2 of them.

 

[mustinjourney]

Here's why I'm having a hard time getting too worked up over the lock-off premium:

At resorts that have both dedicated and lock-off studio and/or 1BR units, there is no difference in booking cost between the dedicated and lock-off units. That is, the point cost of a lock-off is directly tied to the point cost of a dedicated unit of the same size, which is itself subject to the neutral reallocation rules. I'm not up-to-date on the configurations at all resorts, but from what I've read in this thread, it seems that most resorts do have some dedicated studio and/or 1BR units. As I understand it, the exceptions are SSR and GVF. At SSR, the studio and 1BR point costs are roughly inline with the costs of similar units at other resorts. This was true both before and after the 2020 reallocation. GVF runs higher in general, but even there the studio and 1BR costs relative to the 2BR cost seem to be close to the proportions found at other resorts (I haven't added them all up, but if anything, the lock-off premium at VGF looks a bit lower overall than SSR).

As long as this remains true, I don't see any real reason to worry that the lock-off premium could grow uncontrolled. Essentially, the premium at most resorts is directly limited by the reallocation rules, and those resorts that don't have dedicated smaller units appear to just be following the trend. If you can argue that a dedicated studio plus a dedicated 1BR need not equal a dedicated 2BR at resorts that have them, then the same argument (presumably based on demand) can equally be applied to resorts that have only lock-offs.

Incidentally, I've seen several mentions of the handful of cases at SSR where a 2BR standard view unit is cheaper than a 1BR preferred unit in the same season, but a quick perusal of the point chart shows that the same is true (or nearly so) at other resorts in 2020. In particular, at AKV a 2BR standard is cheaper than a 1BR savannah view on weekdays in Adventure, Choice, and Dream (and only marginally more expensive on weekends and in Magic season). 2BR standard is cheaper than 1BR MK view at BLT almost across the board, and at BWV the 2BR standard cost is within 5 points/night of the 1BR preferred view for most nights. Just more evidence that SSR's smaller unit costs don't appear to be disproportionate to other resorts.

As an actual attorney, I’ll just say you don’t have to have monetary damages. An injunction can be the goal in this case. As in, make the 2020 point charts go back to 2019 numbers.

 

[zavandor]

I have read all the SSR POS, from start to finish (time I will never get back). I found a few interesring things I'll post tomorrow when I'll have more time, but the biggest issue is that I haven't found an explicit mention that the point charts are balanced around the 2BR booked as 2BR.

Many people have said the in the POS there is explicit mention that the point charts are balanced around 2BR not locked. Where is it? Is it in the multi site POS (which I don't have)?

 

[mab2012]

Resorts with no dedicated studios and 1BR's are more numerous than your understanding. OKW, VB, HHI, SSR, AKV-Kidani, BLT, VGC, Aulani and VGF. Leaving Kidani out because of Jambo it's 8 of the 14 resorts. Another note is that 3 of these rank in the top 4 for largest resorts. SSR alone has 432 2BR lockoffs compared to 241 dedicated studios and 197 dedicated 1BR's in the 5 resorts that have those unit types. Those resorts with dedicated studios and 1BR's also have 484 2BR lockoffs. So those that may have increase controls in place don't offset much more than 1 resort that doesn't.

Thanks for the correction. I was really only thinking of the WDW resorts, so was missing BLT and OKW, but admittedly there's no reason not to also consider the others. Even so, the argument doesn't change. So long as the point allocations for studios and 1BR units at resorts that don't have dedicated smaller units are kept reasonably in line with those that do (as a proportion of each resort's 2BR cost), it really only takes one "control" to keep the lock-off premium in check.

At resorts without dedicated small units they apparently don't HAVE to keep studio and 1BR costs in reasonable proportion to 2BR costs, but so far it seems that they have (using resorts with dedicated smaller units as a baseline), so there's no particular reason to assume that they'll suddenly start doing otherwise. If they do, my opinion might change, but for the moment I'm not too bothered by it.

And for the record, I'm not trying to dictate how anyone else should feel about it. Just sharing my own point of view.

Others also mentioned that there were locations other than SSR that have the 2BR/1BR overlap. BLT and AKV are 2 of them.

I didn't say otherwise, but my apology if I was being repetitive. I did read most of the thread, but in catching up late on a 30+ page thread, I might have missed a few of the finer points.

 

[wdrl]

Resorts with no dedicated studios and 1BR's are more numerous than your understanding. OKW, VB, HHI, SSR, AKV-Kidani, BLT, VGC, Aulani and VGF.

FYI: Aulani has one dedicated studio among its 467 vacation homes.

 

[motherof5]

As an actual attorney, I’ll just say you don’t have to have monetary damages. An injunction can be the goal in this case. As in, make the 2020 point charts go back to 2019 numbers.

Do you think Disney would do this if enough people complain?

 

[mustinjourney]

Do you think Disney would do this if enough people complain?

Complaints? No.

Media attention which might lead to a large dip in sales of direct points? Absolutely.

 

[KAT4DISNEY]

FYI: Aulani has one dedicated studio among its 467 vacation homes.

Interesting. Was that added when they did some of the conversion after the initial design or was it always there?

 

[wdrl]

Interesting. Was that added when they did some of the conversion after the initial design or was it always there?

Here is something I wrote on July 12, 2014:

When Aulani was first announced in 2010, it was going to have 460 DVC vacation homes, including 21 Grand Villas. In 2012, Disney began work on a number of renovations and upgrades at the resort, including a new pool, water play area, expanded pool deck, and a new casual cafe, to name a few. Due to these changes, DVC made some changes to the number of accommodations that make up the Aulani Condominium Association.

Recently, I had an opportunity to talk to a DVC Cast Member about changes to Aulani's accommodations and configuration. To make room for the new Ulu Cafe, Disney Vacation Development removed a Residential Unit containing a Standard View Grand Villa from the Aulani Condominium Association. The Grand Villa that was removed was one of the three Standard View Grand Villas at Aulani and the only one on the Waianae side of the resort. Now, the two remaining Standard View Grand Villas are located on the Ewa side above Auntie's Beach House.

About the same time as the Ulu Cafe was being built on the Waianae side of Aulani, Disney Vacation Development made a renovation on the Ewa side of the resort. It modified a two-bedroom lock-off villa, removing the one-bedroom portion and keeping the studio portion as a stand-alone dedicated villa. This modification was made to improve access and not to add a new guest amenity.

To make up for the loss of the Grand Villa and the one-bedroom villa, DVC added a Residential Unit containing 8 Standard View Hotel Rooms that are located in Aulani's Hotel Wing.

Due to these changes, here is Aulani's updated villa configuration:

20 Grand Villas -- 2 GVs are Standard View; 18 GVs are Ocean View.

193 Dedicated Two-Bedrooms -- 9 Standard; 74 Island; 25 Pool; 85 Ocean.

245 Lock/off Two-Bedrooms -- 17 Standard; 93 Island; 31 Pool; 104 Ocean.

1 Dedicated Studio -- Standard View

8 Hotel Rooms -- Standard View


These changes also resulted in a change in Aulani's total DVC points from 11,518,422 to 11,519,025 points, a net increase of 603 points. The changes were as follows:

Remove Unit 01A containing one Grand Villa = -46,343 points
Reestablish Unit 01A containing 8 Hotel Rooms = +62,960 points
Remove one-bedroom from Unit 02C = -16,014 points

Net difference = +603 points

Aulani's total number of Residential Units has remained constant at 199.​

 

[motherof5]

Complaints? No.

Media attention which might lead to a large dip in sales of direct points? Absolutely.

I'll keep my fingers crossed for now

 

[Madame]

Thanks for the correction. I was really only thinking of the WDW resorts, so was missing BLT and OKW, but admittedly there's no reason not to also consider the others. Even so, the argument doesn't change. So long as the point allocations for studios and 1BR units at resorts that don't have dedicated smaller units are kept reasonably in line with those that do (as a proportion of each resort's 2BR cost), it really only takes one "control" to keep the lock-off premium in check.

At resorts without dedicated small units they apparently don't HAVE to keep studio and 1BR costs in reasonable proportion to 2BR costs, but so far it seems that they have (using resorts with dedicated smaller units as a baseline), so there's no particular reason to assume that they'll suddenly start doing otherwise. If they do, my opinion might change, but for the moment I'm not too bothered by it.

And for the record, I'm not trying to dictate how anyone else should feel about it. Just sharing my own point of view.



I didn't say otherwise, but my apology if I was being repetitive. I did read most of the thread, but in catching up late on a 30+ page thread, I might have missed a few of the finer points.

Yes, it definitely feels different if SSR is a home resort.

 

[cruisin5]

I've read the entire thread (and those related). My understanding when purchasing in 2001 was if the total number points required to book a resort for a year was X then that number (X) would not change. The 2020 charts reflect that with a very small but acceptable increase.

What am I missing?

 

[mustinjourney]

I've read the entire thread (and those related). My understanding when purchasing in 2001 was if the total number points required to book a resort for a year was X then that number (X) would not change. The 2020 charts reflect that with a very small but acceptable increase.

What am I missing?

DVC has exploited the lock-off premium that has the effect of increasing the cost of studios and 1BRs without having to decrease the cost of 2BRs.

The numbers below are for VGF. You'll see that total points have increased 80,000 going from 2019 to 2020 (this is worst case scenario in which all the studios are booked as studios and not part of a 2BR lock-off). This has the effect of DVC being able to rent out 80,000 points via cash bookings and that incoming money doesn't get disbursed back to the members since DVC already exceeds the maximum that can be reallocated to members to offset MFs. In short, Disney will likely be pocketing a minimum of $1.5 million extra off of VGF alone.