Brian Noble
Gratefully in Recovery
- Joined
- Mar 23, 2004
They barely even bother with exchange guests. I finally got a “stop by the body snatcher for a free gift” text on my stay last month. That was the first time out of a dozen or more.
DVC commercial renters
- Thread starter Chili327
- Start date
drusba
I went to Iowa once, and it was closed.
- Joined
- Aug 19, 1999
A. The Rental Restrictions
Every DVC Resort at WDW is a condominium resort except the new CFW. Those resorts' Declarations, other than CFW, provide that members have a right to rent except that the association can prevent a member from renting if if it makes a reasonable conclusion that the member has engaged in a pattern of rental activity that shows a member is acting as a "commercial enterprise," a legal term that means some person or entity is in the "business" of doing something.
There is a further restriction on corporations or other business entities that are members, in that such corporations or business entities are limited to allowing use of the resort rooms and recreational parts of the resort to owners, directors, officers or employees of such corporation or business entity.
Those terms have never been amended. In 2006, DVC did put out an interpretative guideline which said that, if a member exceeds 20 reservations in any use year, a presumption will be created that the member is violating the commercial purpose clause and any reservations over 20 will not be allowed unless the member shows that the member has not violated the rental restriction.
That rule itself was subject to question legally, but was not questioned because it is likely someone who is doing more than 20 reservations in a given use year is violating the rental restriction provided in the Declarations.
So, essentially, the rental provisions in the declarations, other than CFW, allow rentals for members seeking to offset dues and possibly make a little profit, rent reservations they can no longer personally use, rent to friends and family, rent during a use year they cannot go to Disney because of work or medical issues, or other rentals that do not amount to showing a member is in the business of doing rentals. Moreover, DVC could limit any members who are corporations such as limited liability corporations, partnerships or other group agreements to do reservations, from renting to anyone other than owners, directors, officers, or employees of those business entities.
B. The CFW Rule Changes
Many members, including on these boards, want rentals to either stop or be further restricted. Many suggestions have arisen, such as to do away with rental rights or limit rentals to times when there is not high demand, to a low number of rentals per member, to just friends or family, to being allowed to be made only well past the 11-month out rule, and others that would essentially further restrict the number of times and when a member could rent.
With CFW, DVD has in fact, created far more onerous restrictions. It now has new rules, which among others, state a member can be found in violation of the commercial purpose restrictions simply by any finding that the member has engaged in "frequent" reservations for rental, or just frequent reservations for persons other than the member and the members family, or frequent use of rental sites or rental agencies. And there is no longer any reasonableness standard for finding a violation, but instead DVCM and BTVC are given the "sole" power to make a determination of a violation. As written, a member could be found as violating the restrictions solely upon a finding that the member has made "frequent" reservations for persons other than the member or member's family, and DVCM and BVTC get to decide what is meant by "frequent." In other words, the way the new rules are written, DVCM could, for example, find you have violated the new restrictions by doing nothing more than making three reservations for persons other than yourself or family members, and you would have no right to challenge that finding.
C. Effect on Pre-CFW Resorts
Those new rules should not be applied to owners of the DVC Resorts at WDW other than CFW. In fact, most of the suggested changes that many members have made in the past also cannot be added to the pre-CFW resorts. That is because Florida Statute §718.110(13) essentially limits rental restrictions to those contained in the original declarations for a condominium resort, because any changes made thereafter that could be construed to further limit the number of times or period of times when a member/owner can do rentals requires the actual vote of the owners, and even if there is a vote which results in adopting new restrictions, all members who voted against the new restrictions would not have to obey them.
CFW is not subject to that statute since it was created under the trust section of the timeshare estate definition and not under the condominium section. It is subject only to a statute, §720.306(h) that relates to associations that control rental of units other than condominiums. Those associations are also prohibited, absent a vote of the owners, from creating new rental restrictions than those provided in the original declarations, but that prohibition only applies to rentals that are for a six-month or greater time period, i.e., DVC can create all kinds of new rental restrictions applicable to members who own CFW because the rentals would generally be for shorter periods than six months.
DVD's creation of the CFW rules are designed to have an impact on its problems not the members. What it wants to do is go after rentals in general via the new rules and reduce the number of rentals, and the use of outside agencies and others to do rentals, i.e., its incentive is to generally decrease the competition for room rentals.
The reason members want further restrictions is the belief that members that have become professional renters are using the reservation system and walking to prevent other members from getting hard to get rooms, including rooms at hard to get times. One problem with that concern is that, even if rentals were completely eliminated, the ability of non-renting members to get hard to get rooms, or rooms at hard to get times, would likely not significantly improve. Eliminate rentals and those rooms will still be difficult to get at 11-months out. Moreover, eliminating rentals would probably have little to no impact on getting rooms at 7-months out.
D. Acts That Could Reduce Professional Renting Without Creating Any New Rental Restrictions
One thing I seldom see is any member that is against renting suggesting solutions that could possibly significantly reduce professional renters from seizing, via walking, hard to get rooms, or rooms at hard to get times. An example of something often suggested is that members be prohibited from modifying a reservation made at 11-months out until sometime well past 11-months out, at which time getting a needed modification may no longer be possible. Such a suggestion would adversely impact members who are not renting from doing needed modifications, e.g., a member learns that a change in work schedule requires changing the arrival date.
I have noted before two possible suggestions that require no new rental restrictions but could have a major impact on limiting professional renters from carrying on their business, but will not necessarily make it easier to get hard to get rooms or rooms at hard to get times because even eliminating rentals entirely would likely not accomplish that. I assume there may be other potential solutions that could adversely affect professional renters, which I have not thought of yet, which would not require creating any new rental restrictions.
One possible change I have previously mentioned is one that could easily do away with walking as we know it by simply adopting an old rule that existed until June 2008. The reservation rule before then was that a member could reserve a room at 11/7 months out from date of departure from the DVC Resort room. For example, today, March 24, a member could make a reservation with a departure date of Feb 24, 2024. That reservation would not cover the night of Feb 24 or any date thereafter. An attempt to walk that reservation to a later date would require the member to daily modify the reservation to add the night of the existing check-out date, and when doing so the member would be competing with other members seeking that date, i.e., to do any walk, a member would have to get lucky every day of the walking period to get the room.
A second change would simply require members to inform DVC that a reservation is a rental. The POS documents point out that any rentals are supposed to be done with written contracts that contain provisions informing the lessee that the lessee will be subject to all the DVC rules applicable to occupying a room or using recreational facilities. What DVC could potentially do is adopt a new rule that simply says a member needs to provide a copy of the rental agreement for any reservation done as a rental so it can assure that required terms exist informing the renter about being subjected to any occupancy rules, and if the member fails to provide that rental agreement, and DVC learns of that failure, the reservation will be cancelled.
Getting such agreements would provide information to DVC from which it could determine whether a member is violating the commercial purpose rules. Of course, one's first thought might be that the renting member would just ignore the requirement and not tell the lessee about the requirement. But the professional renter would be taking a significant risk in doing that, because if DVC actually otherwise learns the reservation is a rental and cancels the reservation, the member could potentially be sued by the the lessee for fraud and face both compensatory and punitive damages. In essence to avoid a potential future disaster, the professional renter would need to inform any lessee of the requirement and that it will be followed, but doing so would mean DVC will accumulate the information it needs to determine whether the member is violating the existing rental restrictions.
Every DVC Resort at WDW is a condominium resort except the new CFW. Those resorts' Declarations, other than CFW, provide that members have a right to rent except that the association can prevent a member from renting if if it makes a reasonable conclusion that the member has engaged in a pattern of rental activity that shows a member is acting as a "commercial enterprise," a legal term that means some person or entity is in the "business" of doing something.
There is a further restriction on corporations or other business entities that are members, in that such corporations or business entities are limited to allowing use of the resort rooms and recreational parts of the resort to owners, directors, officers or employees of such corporation or business entity.
Those terms have never been amended. In 2006, DVC did put out an interpretative guideline which said that, if a member exceeds 20 reservations in any use year, a presumption will be created that the member is violating the commercial purpose clause and any reservations over 20 will not be allowed unless the member shows that the member has not violated the rental restriction.
That rule itself was subject to question legally, but was not questioned because it is likely someone who is doing more than 20 reservations in a given use year is violating the rental restriction provided in the Declarations.
So, essentially, the rental provisions in the declarations, other than CFW, allow rentals for members seeking to offset dues and possibly make a little profit, rent reservations they can no longer personally use, rent to friends and family, rent during a use year they cannot go to Disney because of work or medical issues, or other rentals that do not amount to showing a member is in the business of doing rentals. Moreover, DVC could limit any members who are corporations such as limited liability corporations, partnerships or other group agreements to do reservations, from renting to anyone other than owners, directors, officers, or employees of those business entities.
B. The CFW Rule Changes
Many members, including on these boards, want rentals to either stop or be further restricted. Many suggestions have arisen, such as to do away with rental rights or limit rentals to times when there is not high demand, to a low number of rentals per member, to just friends or family, to being allowed to be made only well past the 11-month out rule, and others that would essentially further restrict the number of times and when a member could rent.
With CFW, DVD has in fact, created far more onerous restrictions. It now has new rules, which among others, state a member can be found in violation of the commercial purpose restrictions simply by any finding that the member has engaged in "frequent" reservations for rental, or just frequent reservations for persons other than the member and the members family, or frequent use of rental sites or rental agencies. And there is no longer any reasonableness standard for finding a violation, but instead DVCM and BTVC are given the "sole" power to make a determination of a violation. As written, a member could be found as violating the restrictions solely upon a finding that the member has made "frequent" reservations for persons other than the member or member's family, and DVCM and BVTC get to decide what is meant by "frequent." In other words, the way the new rules are written, DVCM could, for example, find you have violated the new restrictions by doing nothing more than making three reservations for persons other than yourself or family members, and you would have no right to challenge that finding.
C. Effect on Pre-CFW Resorts
Those new rules should not be applied to owners of the DVC Resorts at WDW other than CFW. In fact, most of the suggested changes that many members have made in the past also cannot be added to the pre-CFW resorts. That is because Florida Statute §718.110(13) essentially limits rental restrictions to those contained in the original declarations for a condominium resort, because any changes made thereafter that could be construed to further limit the number of times or period of times when a member/owner can do rentals requires the actual vote of the owners, and even if there is a vote which results in adopting new restrictions, all members who voted against the new restrictions would not have to obey them.
CFW is not subject to that statute since it was created under the trust section of the timeshare estate definition and not under the condominium section. It is subject only to a statute, §720.306(h) that relates to associations that control rental of units other than condominiums. Those associations are also prohibited, absent a vote of the owners, from creating new rental restrictions than those provided in the original declarations, but that prohibition only applies to rentals that are for a six-month or greater time period, i.e., DVC can create all kinds of new rental restrictions applicable to members who own CFW because the rentals would generally be for shorter periods than six months.
DVD's creation of the CFW rules are designed to have an impact on its problems not the members. What it wants to do is go after rentals in general via the new rules and reduce the number of rentals, and the use of outside agencies and others to do rentals, i.e., its incentive is to generally decrease the competition for room rentals.
The reason members want further restrictions is the belief that members that have become professional renters are using the reservation system and walking to prevent other members from getting hard to get rooms, including rooms at hard to get times. One problem with that concern is that, even if rentals were completely eliminated, the ability of non-renting members to get hard to get rooms, or rooms at hard to get times, would likely not significantly improve. Eliminate rentals and those rooms will still be difficult to get at 11-months out. Moreover, eliminating rentals would probably have little to no impact on getting rooms at 7-months out.
D. Acts That Could Reduce Professional Renting Without Creating Any New Rental Restrictions
One thing I seldom see is any member that is against renting suggesting solutions that could possibly significantly reduce professional renters from seizing, via walking, hard to get rooms, or rooms at hard to get times. An example of something often suggested is that members be prohibited from modifying a reservation made at 11-months out until sometime well past 11-months out, at which time getting a needed modification may no longer be possible. Such a suggestion would adversely impact members who are not renting from doing needed modifications, e.g., a member learns that a change in work schedule requires changing the arrival date.
I have noted before two possible suggestions that require no new rental restrictions but could have a major impact on limiting professional renters from carrying on their business, but will not necessarily make it easier to get hard to get rooms or rooms at hard to get times because even eliminating rentals entirely would likely not accomplish that. I assume there may be other potential solutions that could adversely affect professional renters, which I have not thought of yet, which would not require creating any new rental restrictions.
One possible change I have previously mentioned is one that could easily do away with walking as we know it by simply adopting an old rule that existed until June 2008. The reservation rule before then was that a member could reserve a room at 11/7 months out from date of departure from the DVC Resort room. For example, today, March 24, a member could make a reservation with a departure date of Feb 24, 2024. That reservation would not cover the night of Feb 24 or any date thereafter. An attempt to walk that reservation to a later date would require the member to daily modify the reservation to add the night of the existing check-out date, and when doing so the member would be competing with other members seeking that date, i.e., to do any walk, a member would have to get lucky every day of the walking period to get the room.
A second change would simply require members to inform DVC that a reservation is a rental. The POS documents point out that any rentals are supposed to be done with written contracts that contain provisions informing the lessee that the lessee will be subject to all the DVC rules applicable to occupying a room or using recreational facilities. What DVC could potentially do is adopt a new rule that simply says a member needs to provide a copy of the rental agreement for any reservation done as a rental so it can assure that required terms exist informing the renter about being subjected to any occupancy rules, and if the member fails to provide that rental agreement, and DVC learns of that failure, the reservation will be cancelled.
Getting such agreements would provide information to DVC from which it could determine whether a member is violating the commercial purpose rules. Of course, one's first thought might be that the renting member would just ignore the requirement and not tell the lessee about the requirement. But the professional renter would be taking a significant risk in doing that, because if DVC actually otherwise learns the reservation is a rental and cancels the reservation, the member could potentially be sued by the the lessee for fraud and face both compensatory and punitive damages. In essence to avoid a potential future disaster, the professional renter would need to inform any lessee of the requirement and that it will be followed, but doing so would mean DVC will accumulate the information it needs to determine whether the member is violating the existing rental restrictions.
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DonMacGregor
Sub Leader
- Joined
- May 13, 2021
Simple, elegant, efficient.
- Joined
- Aug 18, 1999
This sounds like extra work for MS (and/or maybe front desk personnel) for which they would not be compensated*.
I'd hate to be a front desk CM telling a guest that their reservation was cancelled. (You know that would happen at some point). Don't see this solution ever happening until / UNLESS Disney determines renting is SIGNIFICANTLY impacting their hotel revenue in a negative way. And even then, I think Disney would try other methods first.
* DVCMC pays for MS mainly out of a fixed percentage of Member dues (with a few items like property taxes excluded). It doesn't get more $$ for doing more work. For those who want to know the nitty gritty of MS funding, see this post by drusba:
https://www.disboards.com/threads/i...ded-by-membership-dues.3810328/#post-62232623
DonMacGregor
Sub Leader
- Joined
- May 13, 2021
I'm not sure I understand you. They are hourly workers, not salaried. They get paid to be there for 8 hours, doing whatever their job description entails. When McDonalds brings back the McRib sandwich every so often, the staff don't get a raise, they just make burgers AND McRibs...
Regardless, the contract would need to be submitted to MS when it is signed, not presented on arrival, so that would be a task for MS, not front desk.
DisTravels
Mouseketeer
- Joined
- Nov 8, 2007
What does accounts frozen mean? They aren't allowed to use the weeks they own and pay maintenance fees on?
- Joined
- Aug 18, 1999
Yes, may not be an issue for individual CMs. However, DVCMC has to pay them and DVCMC does NOT get extra $$ for doing more things. If the extra time and monitoring something causes DVCMC to have to hire more CMs, that will be a problem for them.
I'm quite sure a bigger workload is why DVC actually got an online booking system. (Members had been asking for one for what seemed like forever). When we first bought our initial contracts, we had to call for everything. Hold times & complaints were getting ridiculous - to get them reasonable again, DVCMC would have to hire a lot more help for no extra $$. Thus, online booking. The change to booking from 11 months from check out to 11 months from check in is another factor to minimize the number of CMS required.
I agree re Front Desk, but still suspect a few renters will still arrive somehow not understanding their reservation was cancelled. Murphy's Law.
Brian Noble
Gratefully in Recovery
- Joined
- Mar 23, 2004
In some cases, yes. The rationale being the owner was in violation of their contractual agreement. In other cases it just means “can’t send a guest.”
Here is one way they can identify when points are being rented by a commercial entity. A Boardwalk contract for 300 points was recorded today with the purchaser by the name ABC Rentals. I am not giving the exact name but it's 3 letters then Rentals.
Since October of 2023 they purchased 9 contracts.
Since October of 2023 they purchased 9 contracts.
Chili327
DIS Veteran
- Joined
- Feb 18, 2023
Maybe they rent cars. lol
Actually the big question is whether a company owns the points or if they are just helping facilitate a rental, right? Rental store & David's are just helping, not actually renting?
- Joined
- Nov 15, 2008
See, DVC has access to everything it needs to evaluate each membership and make a determination of whether or not they believe it is in violation.
There really is no need for them to take any extra steps that impact owners who are not renting.
It comes down to DVC. simply enforcing the rules it has and IMO, if they do that, then it will certainly change the renting business for commercial companies.
Not doing anything to this owner tells me they do not care if you rent.
- Joined
- Nov 15, 2008
And maybe they don’t. But IMO, they are the ones who need to enforce it if they are in violation
I am just against any changes that make it harder for owners who are using it for family or friends or the occasional rental to do such, when we are allowed to do that.
GoingSince1990
DIS Veteran
- Joined
- Oct 31, 2018
Now I’m pondering why Disney originally made the decision that corporations would be permitted to purchase DVC points, as opposed to restricting ownership to individuals.
Chili327
DIS Veteran
- Joined
- Feb 18, 2023
I would assume... Company retreat, or gifts for employee of the month, etc.
CarolynFH
DIS Veteran
- Joined
- Jan 5, 2000
Some owners create LLCs to hold property in the family - not all corporations are commercial operations.
- Joined
- Feb 6, 2000
The only problem I can see with that stipulation would be their definition of "members family,"' and how they'd enforce it. In my case, I have very few blood relatives left, mostly 2nd cousins, and they aren't Disney fans. I do take close friends, which are for all practical purposes ARE my family. That is not to say that I have never rented out my points, but in 30+ years of ownership, I have only actually rented out some of my points in June of last year on a thread on our Rental board. Other than that everyone who has used my DVC has been close friends, who will inherit all my possessions and property when I eventually leave this earthly realm (hopefully I will outlive my DVC membership, though.) Even my actual blood relatives do not share my last name.
DisTravels
Mouseketeer
- Joined
- Nov 8, 2007
Good point about LLC's or trusts holding property. The purpose of DVC is (new) sales. Adding more restrictions on purchases (especially new purchases vs resale) could negatively impact sales.
HyperspaceMountainPilot
DIS Veteran
- Joined
- Dec 23, 2019
So many questions— are the all BWV? How does their purchase price compare to median purchase price? Are they all from the same broker (or couple of brokers)?
I think Disney would like to stop commercial rentals from undercutting their deluxe resort (and frankly even moderate resort) revenue, BUT I suspect that some of the big brokers being willing to buy and rent out massive contracts is helping Disney keep prices close to $100 without spending any money on ROFR.
They were not all BWV.
I will go back to see if I can identify the broker.
The LLC and the owner were easy to find. He is a real estate professional.
He used Cammy for 8 of the 9 and Magic Vacation Title for 1. The owner of the LLC also owns 10 under his own name that he purchased since 2022. I did not bother looking at the points he owns individually but under the LLC he owns 2700. The LLC owns 3 at BWV, 2 at OKW, 1 at BCV, 2 at AKV and 1 at POLY (600 points). Not the same use year.
The 10 he owns under his name are 1 BLT, 2 BWV, 1 AK, 4 SSR and 2 Direct Riviera. All the others are resale.
He has 2 LLC's one uses the Disney name directly.
And before anyone gets upset that I found this information. It is all public information that you just need to Google or use the public record site.
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