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

[Madame]

Thanks Rob, I'm not sure how it'll come through.

Completely legible.

 

[Jerry5788]

Members would exhaust their points faster due to the higher point total needed for renting studio and one bedrooms. This would now allow Disney to rent some “extra” rooms for cash.

Not sure that’s true as even if you exhaust points more people will borrow. So would be next year points might be late but then you can borrow from following year etc

 

[Madame]

Not sure that’s true as even if you exhaust points more people will borrow. So would be next year points might be late but then you can borrow from following year etc

Eventually you run out of points to borrow though & you have to forego a trip. You’re just pushing off cutting a night from your trip annually until your cut nights equal a trip.

 

[zavandor]

This is exactly what a reallocation is supposed to accomplish - "balancing points between different size villas".

This is what THIS reallocation accomplishes, not what every reallocation should accomplice.

Florida laws says there is a one-to-one use right to use right requirement ratio, it means that the total number of Vacation Points needed to book the whole resort must be equal to the total number of points sold at that resort. This is the initial requirement that must be respected when designing the first point chart.
For years almost everyone here on the DIS have though that this requirement was the sole to apply also to reallocation. But it is not the case.

The paragraph quoted by Dean from the multi site POS is out of context so it's difficult to judge its implications in full, but as I read it, it just reiterates the rule above. It has no mention of reallocations. I would like to read what it says about reallocations, I hope Dean can find a way to scan or photograph it. If anyone has an electronic copy of it, please post it.

My understanding is that DVD sells points, DVCMC (DVC Management company) manages the resorts for the members benefit. Those two are separate entities and they must be. DVCMC must not operate for the DVD benefits, DVCMC must act in members interests. When creating the DVCMC a number of task have been assigned to them and a number of rules guide their actions. Those are specified in the POS.
Rules about the reallocations are described in the the resort POS in Exhibit G, Paragraph 3.3, titled: "Home Resort Vacation Point Reservation Value".
Note that the definition of "Home Resort Vacation Point" is "Vacation Points symbolizing an Ownership interest at a Home Resort and which Vacation Points may be utilized to reserve accommodations at that Home Resort where that Ownership interest is held".
So, paragraph 3.3 of Exhibit G talks about the value of HRVP, and how that value could change over time. If one year I can book a week with my allotment of HRVP, the next year I could be able to book 6 days. This lowers the value of my HRVP for a specific period and might increase it for another.

Rules here are extremely clear, there are a number of rules in the paragraph:
(parts in Italic are direct quotes from the POS)

1. the reallocation has to be done to balance demand. When a reallocation is needed and how it is done is at the absolute and unfettered discretion of DVCMC. A reallocation aimed at pushing the sale of larger units is illegal
2. during the Base Year the total number of HRVP required to reserve all Vacation Homes during all Use Days in the condominium must always equal, and be symbolic of, the total number of Ownership interests owned by Club Members in the Condominium. This reiterates the rule above, in compliance of the Florida Law
3. DVCMC may, in its sole discretion, increase or decrease the Home resort Vacation Point requirements of a given Use Day within a given Vacation Home during the given calendar year by any amount not to exceed twenty percent (20%) of the Home Resort Vacation Points required to reserve a Use Day during the previous calendar year; provided, however, that the total number of Home Resort Vacation points existing within a given Unit at any time may not be increased or decreased because of such reallocation.
   
   This sentence is badly written. Firstly it talks about a Vacation Home, secondly about units and finally it says that "points exist": points are an abstract concept, they do not exist. They represent the reservation value associated with the ownership interest. They should have written "the total number of HRVP required to reserve all Units/VH...".
   
   Having used two different words to describe this rule, it's a bit more confusing. However, since both have been used, both have to be respected. If DVC could reallocate points within a Unit at will, the rule requiring to reallocate only within a VH would be broken. If instead the reallocation happen within a VH, then automatically also the number of points within a Unit remain the same. So I think this is what the rule says. Also note that not being able to reallocate points across units would probably bind DVCMC to reallocate within the same VH anyway. Units are formed of different rooms compositions anyway, so balancing lockoffs, dedicate rooms and GV could prove impossible anyway, but I haven't analysed all units, so if you can find a counter example please comment.
   Reallocations between studios and Poly bungalows are clearly illegal. As are THV and change in view category at SSR, BLT and AKV, as those rooms are in different units.
   
   
4. Any Increase or decrease in the Home Resort Vacation Point reservation requirement for a given Use Day pursuant to DVCMC's right to make this Home Resort adjustment must be offset by a corresponding decrease or increase for another Use Day or Days.
   
   This reallocation has increased the cost of studios in all Use Days without any offset in any other User Day. Poly bungalows have only gone down. THV have only gone up. Sometimes the adjustment has been offset in a different room type in the same Use Day.

DVCMC is not one of the Avengers: they do not have superpowers. They can or cannot do things based on the POS. And for reallocations all of the 4 rules above are clearly written. I cannot see why rule 2 should be the only in effect.

But DVCMC have always done it, it must be legal
Have they? When they found an unbalance of demand between different locations at OKW and BWV they have created a new booking category with the same point requirements (HH and BWView). It was only many years after DVC was established that they created a new booking category with different point costs within the same resort at SSR. Also, the reclassification of BLT rooms didn't happen until a couple of year after BLT went on sale. It seems DVC followed their own rules for a long time and only recently they're started probing members to see if they could get away with.

But they have already done it and you haven't said anything
Can our rights expire in the middle of the validity of our contract? I don't think so.

And what about the increase in lockoff premium?
I believe they cannot increase it, but it's more difficult. It is only cited in the VGF POS, it has always been there, there is no clear rule forbidding it. I do believe that it violates the one-to-one use right to use right requirement ratio in the Florida Law, but I am no lawyer. In regards to the reallocation there are explicit rules in the DVCMC rulebook that clearly state what they have done is not allowed, it cannot be easier. Anyway, in order to increase the lockoff premium they should demonstrate it is in members interest, given the breakage income for DVD will increase as a consequence and members HRVP value decreases, it should be easy to challenge it.

 

[papertraveller]

Thank you all sincerely for your information, analysis and opinions.
We are frequent studio vacationers and this will have a negative impact on our family.
As to the legality, do I understand correctly that the issue boils down to the definition of the 'unit' -- i.e. are the points allocated only to the units of similar type, and thus that the points bucket for studios (whether standard, theme park, lakeview, savanna etc.) cannot rise so that two-bedrooms might fall?
Where can I send my email to express my concerns to Disney?

 

[Jerry5788]

Eventually you run out of points to borrow though & you have to forego a trip. You’re just pushing off cutting a night from your trip annually until your cut nights equal a trip.

Correct but point increase was 10% so you forego 1 trip every 10 years? I’m just missing the part how Disney really benefits from these lock-off premium stuff. Perhaps they benefit for people needing to top up on contracts

 

[Madame]

Correct but point increase was 10% so you forego 1 trip every 10 years? I’m just missing the part how Disney really benefits from these lock-off premium stuff. Perhaps they benefit for people needing to top up on contracts

How do you know they’ll stop there? We already have 1bds requiring more points than 2bds at SSR in the same season. I’m a forward looking type.

 

[10CJ]

Members would exhaust their points faster due to the higher point total needed for renting studio and one bedrooms. This would now allow Disney to rent some “extra” rooms for cash.

That is only some members though. Those who rent 2 bedrooms may come out ahead, maybe they extend their vacation. Maybe this increases availability at the 7 month window for some resorts. I don’t think you can assume this automatically means Disney has extra to rent.

 

[skier_pete]

They made two bedrooms cheaper right? I don’t book 2 bedrooms so adverse to me but perhaps next trip I’m planning I will bring some friends and upgrade to the 2 bedroom.

Seems hard to prove intention behind the changes unless you can actually get a judge to grant you discovery and someone was stupid enough to put it in email. I agree it is likely a consequence of the change what you described as studios are always the first to

They did in some cases but not sufficient to offset the amount they raise in lock offs.

See, all 2-bed lock offs are sold as 2-beds. So if it used to be 300 points for a week, and maybe 110 points for a lockoff studio and 220 points for lock-off 1-bed. If owners rent the studio, the 2-bed is no longer available, so the 1-bed goes to another member. This creates 30 points in the system that are owned by any members. Multiply that by all the 2-bed lock offs that are split in the system, and there's a bunch of extra points in the system that can't be used by members. (Remember, members only own 300points for that room, but used 330 points to rent it.

Now Disney takes this lock off, and lowers the two bedroom rate to 270 points, then raises the studio rate to 120 and 1-beds to 240. (This is again a simplified example where I chose to have the point totals remain the same in the case there are dedicated studios and 1-beds as well.) But when they rent out the lock-off as the two separate units, now they are creating 90 points instead of 30 points. Again, these are 90 points that don't exist in the system, so members are unable to make up the difference to rent all the rooms. All this doesn't create points, but it creates unoccupied rooms. Now, resorts likely BCV and on t see the extra rooms unoccupied because non-owners will funnel more points into BCV, but overall Disney benefits in two ways. (1) sells more 1-time use points to all the people that are now short points, (2) drastically increase the number of unoccupied rooms in the system that they can then convert to cash rentals. Yes, these rooms are likely to be at the less popular resorts, but they still are available.

This trick here is of course can easily argue they are benefiting the members by making 2-bedrooms more affordable. This is great for the portion of members that rent two bedrooms, but considering the average first contract for the last 6-7 years has been 140-150 points, is that benefiting the majority of members? And regardless of it is indeed benefiting some members, it's hurting many more, and the one that clearly benefits the most IMO is Disney.

 

[Jerry5788]

They did in some cases but not sufficient to offset the amount they raise in lock offs.

See, all 2-bed lock offs are sold as 2-beds. So if it used to be 300 points for a week, and maybe 110 points for a lockoff studio and 220 points for lock-off 1-bed. If owners rent the studio, the 2-bed is no longer available, so the 1-bed goes to another member. This creates 30 points in the system that are owned by any members. Multiply that by all the 2-bed lock offs that are split in the system, and there's a bunch of extra points in the system that can't be used by members. (Remember, members only own 300points for that room, but used 330 points to rent it.

Now Disney takes this lock off, and lowers the two bedroom rate to 270 points, then raises the studio rate to 120 and 1-beds to 240. (This is again a simplified example where I chose to have the point totals remain the same in the case there are dedicated studios and 1-beds as well.) But when they rent out the lock-off as the two separate units, now they are creating 90 points instead of 30 points. Again, these are 90 points that don't exist in the system, so members are unable to make up the difference to rent all the rooms. All this doesn't create points, but it creates unoccupied rooms. Now, resorts likely BCV and on t see the extra rooms unoccupied because non-owners will funnel more points into BCV, but overall Disney benefits in two ways. (1) sells more 1-time use points to all the people that are now short points, (2) drastically increase the number of unoccupied rooms in the system that they can then convert to cash rentals. Yes, these rooms are likely to be at the less popular resorts, but they still are available.

This trick here is of course can easily argue they are benefiting the members by making 2-bedrooms more affordable. This is great for the portion of members that rent two bedrooms, but considering the average first contract for the last 6-7 years has been 140-150 points, is that benefiting the majority of members? And regardless of it is indeed benefiting some members, it's hurting many more, and the one that clearly benefits the most IMO is Disney.

Are they able to go beyond the % of points that they hold? How far can they rent these unoccupied rooms out is it 1 month is it 6 months out? Don’t these room rentals help offset costs and hopefully don’t see dues raise as high they did this year?

 

[skier_pete]

Are they able to go beyond the % of points that they hold? How far can they rent these unoccupied rooms out is it 1 month is it 6 months out? Don’t these room rentals help offset costs and hopefully don’t see dues raise as high they did this year?

I don't know the answer as to when they can convert inventory to rental. Others have mentioned that a certain % of the fees go back to the owners, but that was already being fully met by the old system.

 

[skier_pete]

I do want to admit a few things here. I'm sure many of you have seen the availability charts that Bing_Showei and I have generated for studios and 1-bedrooms. He has prodded me to also complete charts for 2-bedrooms, which we are working on now. (Been doing it for a few months but not more than 1/3 done.) The assumption we all make is that studios are the most popular, followed by 2-bedrooms, followed last by 1-bedrooms. This data mining should once and for all answer that question.

To date, the results I am seeing are mostly backing that up, but it's a lot closer than I would've though. And I have to say, it looks like at SSR the 2-bedrooms might actually be even more available than the 1-bedrooms. (Though both are pretty damn available.) Other resorts seem to be confirming the thought that 2bedrooms do run out first, such as BCV, but again since the resort books up pretty quickly at 7-months the difference isn't huge. A few resorts (

I guess what I'm saying is Disney may have SOME ammo - especially at SSR - to say that 2-bedrooms need lower point prices. However, raising 1-bedroom rates still remains a problematic argument in my point of view. As I said, even though I am a studio renter, i can fully see the argument to increase studios rates, but increasing 1-beds at the same time does not have a firm basis in the data.

 

[Frederic Civish]

I think Zavendor is doing an excellent job here. No one is against balancing demand and supply. I'm convinced if DVCMC had increased studios, and decreased 1 beds in a direct point to point set off, no one would have been able to say that was done in bad faith.
What people on Facebook etc seem unable to grasp (eyes filled with pixie dust) is what Zavandor seems to be highlighting.
I think DVCMC need to come out and explain, with data, their exact thinking on the points allocation, and also answer the issue raised above.
I'd also like to know why none of this was addressed at the members' meeting the week before. That MUST have been a conscious decision, which is totally unacceptable.
The new head of DVC needs to now address this, and failing that, Jeff Vahle needs to be contacted.
If we still get nowhere, the lawsuits may be next.
I'm pretty sure if there is a good case, a lawyer would take a class action on a contingency basis. I would suggest maybe contacting one and asking if they'll be interested.
Unfortunately the whole system is not ideal. When you effectively have the management co making its money based on a percentage of dues, and effectively controlled by DVD, who are still selling timeshare, conflicts can arise. I'm not saying they have, but they obviously can.
What I want initially is the clarification, then I can consider if I was wrong all along and what I see as a counter productive points allocation was actually done for the members' benefit.

Zavandor, Wakey, and all the other people who are concerned about what Disney has done, I think you are right on. I love Disney. (I think that should be obvious, considering that I own over 1000 DVC points.) I literally live and breathe Disney EVERY DAY. My family gets so tired of me talking about it. I have a large family, and often travel with up to 14 people. I plan multiple, incredible trips per year, big, long, expensive trips (though I will admit that I end up throwing half of them away, when things often don't work out). I used to live in Florida. I have Family that lives in Florida who are also DVC owners and we meet them at Disney World multiple times per year. Sometimes they even fly out here and we go to Disneyland together. I just say all these things so that no one thinks I am just this big, negative, 'complainer' who is out of touch, uninformed, and who has no right to the negative opinion that I am forming.

So, I care. A lot. And that is why this whole reallocation thing bothers me. I may not be happy when Disney raises the price for Park Entry, Annual Passes, Food in Disney World and Disneyland, and then all the little nickle and dime stuff that they have started to do lately. I don't like it, and, frankly, I think it is showing that Disney Corporation is becoming more and more rapacious and greedy. I KNOW they have investors and they need to show a profit, etc. etc. But I question, what about their responsibility to their USERS (whether they own DVC or pay cash) and what about their responsibility to the Legacy of Walt Disney? Even so, though I might disagree with that, that is their right as an American business. However, when they start 'stealing' points from DVC Members, in violation of CONTRACTS THAT HAVE BEEN SIGNED AND ESTABLISHED, then they are going too far. Again, it doesn't matter that it is 'only a little bit,' or that it might or might not affect a certain person or family adversely. It is simply that what is right is right, and if Disney respects us so little that they are willing to make DVC changes ENTIRELY FOR THEIR OWN PROFITS, then they are WRONG, and they have violated the trust that we, as DVC Owners, have placed in them.

So, yes, I am unhappy. I hate to start losing my trust in Disney. Maybe I need to open my eyes, get the Pixie Dust out of them and really start to accept Disney for what it is. Maybe I shouldn't be surprised. But, if that is the case, then I need to start treating them just like every other business. I have recently been involved in a lawsuit where someone who managed things and had a fiduciary relationship violated that relationship, and we won. I didn't want to do it, but it needed to be done. And now, I am starting to think that we really need to do the same with Disney and their DVC agreements.

So, yeah, I will support moving forward with legal action, and pressure on Disney, and if you need a small donation to be able to pursue that, then I am willing to kick in for that, too.

 

[Dean]

How do you know they’ll stop there? We already have 1bds requiring more points than 2bds at SSR in the same season. I’m a forward looking type.

There's a reasonable limit and there's a maximum reallocation limit so this is not an infinite risk. I wouldn't be surprised if in the future they further increased studios though and at resorts with dedicated smaller units, decreased 2 BR further.

 

[Jerry5788]

There's a reasonable limit and there's a maximum reallocation limit so this is not an infinite risk. I wouldn't be surprised if in the future they further increased studios though and at resorts with dedicated smaller units, decreased 2 BR further.

Maybe next year we see low maintenance cost change because the point chart changed who knows

 

[Dean]

I do want to admit a few things here. I'm sure many of you have seen the availability charts that Bing_Showei and I have generated for studios and 1-bedrooms. He has prodded me to also complete charts for 2-bedrooms, which we are working on now. (Been doing it for a few months but not more than 1/3 done.) The assumption we all make is that studios are the most popular, followed by 2-bedrooms, followed last by 1-bedrooms. This data mining should once and for all answer that question.

To date, the results I am seeing are mostly backing that up, but it's a lot closer than I would've though. And I have to say, it looks like at SSR the 2-bedrooms might actually be even more available than the 1-bedrooms. (Though both are pretty damn available.) Other resorts seem to be confirming the thought that 2bedrooms do run out first, such as BCV, but again since the resort books up pretty quickly at 7-months the difference isn't huge. A few resorts (

I guess what I'm saying is Disney may have SOME ammo - especially at SSR - to say that 2-bedrooms need lower point prices. However, raising 1-bedroom rates still remains a problematic argument in my point of view. As I said, even though I am a studio renter, i can fully see the argument to increase studios rates, but increasing 1-beds at the same time does not have a firm basis in the data.

Thanks for adding that information. For resorts with lockoff's you can't increase 2 BR without decreasing studios AND 1 BR's.

 

[Dean]

Maybe next year we see low maintenance cost change because the point chart changed who knows

They likely won't change that quickly if they change at all. It'll be too soon and any changes will be more incremental and more in terms of control of increase over the next few years.

 

[Frederic Civish]

DVC could render this moot with a single sentence. This could be just the first year of a 2-year adjustment, necessitated by the 20% cap. In 2021 there could be a shifting of points from One Bedrooms to Studios. Or they could claim that they have actual usage data to back up the moves made. All we can tell from booking data presented online is whether a resort/room type is 100% sold out. The underlying trends regarding how quickly rooms fill across the seasons may tell a different story.

They could claim that the 1BR changes gave more weight to other measurable booking trends rather than comparing to Studios and Two Bedrooms (Adventure & Choice vs Dream & Magic, Standard Views vs Preferred/Lake, Weekdays vs Weekends.) Sometimes you have to eat the elephant one bite at a time.

If a legal professional is truly interested in this cause, the first thing they'll want to know is what dialogue has taken place with DVC. Disney may not make it easy, but an avenue exists to discuss the matter one-on-one. Flying to Florida for the day--even from the UK--is going to cost less than the legal fees necessary to read POS, research case law and send a written inquiry.

If someone wants to go meet with DVC, I'll buy them lunch. But that's about the extent of my interest level. Gathering support for a lawsuit should be about Step 8 in this process. With all due respect, people are being asked to support a random crowd-funded legal battle when other avenues (steps) are being completely ignored.

It is very unlikely that there has been some 'HIDDEN DEMAND' for 1-Bedrooms, and that Disney is just making adjustments pursuant to proven demand. If there was such an excessive, hidden demand for 1-bedrooms, then you would need to postulate that people are reserving ALL the 1-bedrooms, down to the last few, and that then the demand for 1-bedrooms comes to a screeching halt, and the last few are only desirable again, and thus booked, after ALL the other DVC units are pretty much taken up. It is actually pretty impossible.

As for the desire not to rush right into legal action, pressure, or a lawsuit, I agree with that. I would strongly encourage that we follow Theodore Roosevelt's admonition to 'Speak softly, and carry a big Stick!' I am all for a full, OPEN and polite dialog with Disney. But that doesn't mean we should wait until after the dialog to get the big stick ready. The time to prepare the Big Stick is now. Especially since Disney is MUCH more likely to engage in a full, ohpen and meaningful dialog if they can see the big stick hanging on the wall behind us.

 

[glamdring269]

Assumption filled post ahead.....

My assumption is they increased 1BR in order to curtail a typical studio renter from simply making the leap to the next level. If the end game is to maximize profit then they need all of the cash bookings they can get which requires trying to lock people into the same room type they typically book but at a greater price. A person booking a studio doesn’t need a 2br but likely wouldn’t mind having a 1br if the pricing is not so far off. A 1br renter probably doesn’t need a 2br.

Of course this assumes there is a profit play going on and not something that is truly in our interest. So if they can simply explain their logic and put this to rest...

 

[OKW Lover]

How do you know they’ll stop there? We already have 1bds requiring more points than 2bds at SSR in the same season. I’m a forward looking type.

We certainly don't know what they intend to do in the future. However, there is no basis for complaining (lawsuit) now about what might be done.