New Definition of Rental Activity?

[fumanchu2488]

Members have a right to rent and, under all the POS's before Riviera, the only restriction to that right was that members could not engage in a pattern of rental activity from which the association could reasonably conclude shows you are a a commercial enterprise, a legal term that DVD's lawyers undoubtedly put into the POS, which means that one needs to be in the "business" of renting. Moreover, those POSs have another rule solely applicable to members that are corporations or other business entities, which states that such entities' use of the rooms and facilities at the resorts is limited to that business's officers, directors and employees (and thus rentals to persons other than officers, directors our employees is prohibited).

If DVC actually enforced those rules and went after members that are professional renters or set up a business to do rentals, that would be fine.

But that is not what DVD is doing. It has issued a new DVC Resort Agreement for the CFW resort, an agreement that can potentially apply to pre-Riviera members, which includes the following at §5.7:


"Except for Ownership Interests owned by DVD, rentals of Vacation Homes to the general public by any of The TWDC Companies including DVD and BVTC, reservation or use of Vacation Homes and facilities of a DVC Resort is limited solely to the personal use of Club Members, their guests, invitees, exchangers, and lessees and for recreational use by corporations or other similar business entities owning Ownership Interests while staying as a registered guest at the DVC Resort. Except for any of The TWDC Companies, purchase of an Ownership Interest and reservation or use of Vacation Homes and facilities of a DVC Resort for commercial purposes or for any purpose other than personal use is expressly prohibited. BVTC shall be the sole determiner, in its discretion, of any use or activity that does not constitute personal use or constitutes commercial use under this Agreement. Such commercial purpose could include a pattern of rental activity of reserved Vacation Homes or frequent occupancy by others of reserved Vacation Homes other than a Club Member or the Club Member's family; use of regular rental or resale advertising; creating, maintaining, or frequent use of a rental or resale website; repeated or frequent purchase and resale of Ownership Interests whether in the name of a Club Member or those related to such Club Member or through the use of entities, partnerships, or trusts; or the acquisition of a number of Ownership Interests in excess of the amount of the maximum permitted. ownership whether in the name of a Club Member or those related to such Club Member or through the use of entities, partnerships, or trusts."

The section thus does away with the "reasonableness" standard in pre-Riviera POS's for determining a violation and gives BVTC absolute power to determine any issue. And it says a "pattern of rental activity" of Vacation Homes can itself be a violation without defining "pattern" or that it has to amount to being a commercial enterprise like the pre-Riviera POS's. It says just "frequent" occupancy by persons other than the member or members family can be found improper and does not define "frequent." It says "frequent" (again undefined) use of a rental or resale website, "repeated or frequent" (undefined) purchase and resale of ownership interests by the member or those related to the member, etc. And with the absolute power to make determinations, BVTC can decide, if it feels like it, that even two or three events in a year means you are violating the rules, and the member has no right to challenge the decision made.

And to top it all off, that section is in the CFW DVC Resort Agreement despite that all the pre-Riviera DVC Resort Agreements declare that any future DVC Resort Agreement for a new resort "shall be substantially similar to this Agreement in all material respects." And not only do those prior DVC Agreements have no such rental restriction terms, BVTC, until now, never even had any power at all to determine rental issues.

There are other additions to the CFW DVC Resort Agreement that never existed before, including, for example, that BVTC can now annually reallocate points needed per night by moving points between room sizes, e.g., it can lower them year round for 2BRs while raising them year round for studios, a power that BVTC never had before and is contrary to prior POS's that limited such changes to shifting points among seasons for the same room sizes. And that is a term obviously added to apply to pre-CFW resort owners since CFW cabins are all the same size and require the same number of points per night. In essence, the major problem here is not enforcement of prior commercial purpose rules that have long existed. The major problem is that DVD has clearly now decided that, whenever it feels like it, it can just do away with any prior agreements it has made with members. Existing members should be objecting to that. It improperly created new rules before with the resale restrictions but, at least for those, it excluded their application to members who purchased before the rules were created. It has created no exclusion for existing owners to the new rules.

I understand the semantics of the contract and agreement. And agree that they should not set precedent to 'do away with prior agreements' as you stated above.

I have a hard time understanding how you are making a jump from the language changing rental rules in the CFW agreement to 'DVD has now decided that, whenever it feels like it, it can just do away with any prior agreements it has made with members'.

My question is, for 90%+ of members who don't rent points (or do so once every five years), why would we argue against a crackdown on renting? Ultimately it seems like that would ease the use of the membership for everyone who does not rent.

 

[DonMacGregor]

My question is, for 90%+ of members who don't rent points (or do so once every five years), why would we argue against a crackdown on renting? Ultimately it seems like that would ease the use of the membership for everyone who does not rent.

My experience in life has taught me that the people who complain most vociferously against changes to rules and regulations are the ones most affected by it.

Anyway, just stopped by for a second. I have to run to the store and buy up all the baby formula so I can sell it to single mothers on eBay and Facebook Marketplace and make some extra cash. There's no law against it, and it's not my fault they don't have as much money as me, or can't beat me to the store because they have to take the bus.

 

[JackosinDIS]

But that is not what DVD is doing. It has issued a new DVC Resort Agreement for the CFW resort, an agreement that can potentially apply to pre-Riviera members, which includes the following at §5.7:

I’m interested in the potential for the DVC resort agreement to apply to pre-Riviera members. I think you have said that this may be the only document that could in theory apply, due to the fact that members can trade in to CFW. However, given that post 2019 resale points cannot trade in to any of the new resorts, how could DVC argue that those member are in any way governed by the terms of these new resort agreements?

 

[Chrisdriscoll]

Actually, hoarding for resale can be a violation of federal law. 50 USC 4512. The most recent time this was invoked was during the pandemic so people wouldn't hoard and price gouge sanitizers and personal protective equipment. The are also state laws against this as well depending on where you live. https://www.today.com/news/brothers-who-hoarded-17-700-bottles-hand-sanitizer-forced-donate-t176028

I don't know if I'm complaining vociferously, but this change is worrying to me. I have 800 AKL points. Part of the reason I got so many points was that I did my research and was comforted by the fact that I could rent out the points that I wasn't using (also I wanted to splurge on myself because I'm a special special boy and stay in 1 bedrooms and up). For example, last year I used roughly 600 points for me and my family, and rented out the rest of the points. This year I am using 230 points, and I rented out the rest. My dream is to one day when I'm retired spend the entire month of September in a 1 bedroom Savanna view. Also, if I have to sell some of my contracts, that means I can't do things like bring my entire family down one year, or my girlfriend's entire family down (we are talking 19 people in the first case, and 14 in the second) both of which I planned to do in the next 5 years or so. That means I cant use my DVC the way I planned and dreamed of.

I don't make confirmed reservations to rent out, and the only time I walked anything was this year to save a guy I was renting 4 points on a value studio (I followed behind the really good walkers).

I did some rough math. Renting out points is highly unlikely to ever turn a profit for me. Depending on the year, it is either going to cover some portion or all of my condo fees. Some years it will be more than that, but at most that will chip away some at what I paid initially for the points (its embarrassing, its more than $113,000.)

So depending on how aggressive they are about this, I might have to sell some of my contracts. I'm sure I wont be alone. That would depress resale prices, and who knows for how long.

Second, I don't think that will improve the availability issues for the hardest to get rooms and during the most competitive times. If I sell my contracts, then there will be just as many if not more people chasing those same rooms. Some people I've read in the past have argued that a lot of the availability problems come from when DVC was selling such small contracts that those people could only ever afford to stay in a studio. This seems somewhat plausible to me. It is also more than plausible that there are mega-renters who are stripping contracts, making only confirmed reservations ect., that are making availability worse. But I suspect that the biggest factor is that the natural human tendency to try get the most out of their points means that availability will always be really rough for the lowest point rooms. Also there are more points in the system now to chase those rooms, and as compared to past decades, there are more people going now.

Third, if you ever use up all your points, and want to go for a weekend, I think it will be harder to find someone to rent those points from. If I can't rent up to 20 reservations now (which I've never even gotten close to) but something like 2 or 3, then it is much less attractive to me to rent to someone who needs 40 or 50 points for their reservation as opposed to someone who needs 100+ points.

I don't have any answers here, and I'm not arguing that I'm the good guy here. But I don't see who really benefits from this aside from DVC and Disney more broadly. I get that they don't want large businesses competing with them for cash stays or the ability to sell direct points. Those are clearly commercial enterprises seeking and achieving a profit (also, the amount they are charging for those confirmed reservations seems really high to me). And this seems like a highly material change that they implemented without giving any notice. Guides used to tell people that they could rent out unused points, and I'm sure some people relied on that in their purchase decision. I know I relied on the prior definition when I bought both my resale and direct points.

But for me at least, I don't think I would ever buy at any new resorts. To get 11 month priority on any one bedroom, I'm sure I would need at least 150 points at that resort. So now I have 3 or four contracts at different resorts with no guarantee that I can rent out the points for the resorts I'm not using. That wouldn't work for me.

To summarize, I sure hope they aren't coming for me.

 

[Nabas]

I don't make confirmed reservations to rent out, and the only time I walked anything was this year to save a guy I was renting 4 points on a value studio (I followed behind the really good walkers).

My last 2 AKV Value and last AKV Club reservations were by grabbing rooms behind walkers!
`
Each day I thought to myself, "Don't stop walking today!"

 

[Sandisw]

I understand the semantics of the contract and agreement. And agree that they should not set precedent to 'do away with prior agreements' as you stated above.

I have a hard time understanding how you are making a jump from the language changing rental rules in the CFW agreement to 'DVD has now decided that, whenever it feels like it, it can just do away with any prior agreements it has made with members'.

My question is, for 90%+ of members who don't rent points (or do so once every five years), why would we argue against a crackdown on renting? Ultimately it seems like that would ease the use of the membership for everyone who does not rent.

Its not about the crackdown but It’s some of the suggestions here that get posted that some take issue with..for example, limiting how many name changes can happen in a year, etc

While I am not bothered by renting, I would take issue with changes that make booking and changing and even the occasional rental, like using a broker to find a renter, more difficult.

 

[fumanchu2488]

Its not about the crackdown but It’s some of the suggestions here that get posted that some take issue with..for example, limiting how many name changes can happen in a year, etc

While I am not bothered by renting, I would take issue with changes that make booking and changing and even the occasional rental, like using a broker to find a renter, more difficult.

I agree. And I wouldn't want more onerous requirements for booking.

Maybe DVC just looks at those metrics internally to help determine frequent rental activity and if tied to specific memberships, they could notify them of an intent to audit a pattern of rental activity. Including selling points to brokers who are commercially renting points.

My thought isn't to make it harder since 90% or more people don't rent points. It is to do everything within reason to deter commercial renting or even consistent rental activity.

A thousand members with a few hundred points who use a broker or two creates a monster of a commercialized rental system that makes it harder for everyday members to book their own resorts.

 

[Sandisw]

I agree. And I wouldn't want more onerous requirements for booking.

Maybe DVC just looks at those metrics internally to help determine frequent rental activity and if tied to specific memberships, they could notify them of an intent to audit a pattern of rental activity. Including selling points to brokers who are commercially renting points.

My thought isn't to make it harder since 90% or more people don't rent points. It is to do everything within reason to deter commercial renting or even consistent rental activity.

A thousand members with a few hundred points who use a broker or two creates a monster of a commercialized rental system that makes it harder for everyday members to book their own resorts.

I don’t necessarily agree that people are getting shut out of their home resorts for rentals….maybe key rooms? But even so, IMO, even if they were completely stopped, some rooms and certain times would be just as difficul,

Even if a thousand members are renting a few hundred points, it’s within the rules, whether they advertise on their own or use a brokerr. That is what I am talking about in terms of rules…limiting how one can secure a rental to me, is a big deal and I don’t think we should have rules to say how we can acquire one.

All DVC has to do is monitor the memberships and go from there…it should not matter where the renter came from…if an owner is outside the norm and renting in a way that appears they are making a business out of it, then those owners can be dealt with…no need to make any further rules.

 

[KimMcGowan]

Members have a right to rent and, under all the POS's before Riviera, the only restriction to that right was that members could not engage in a pattern of rental activity from which the association could reasonably conclude shows you are a a commercial enterprise, a legal term that DVD's lawyers undoubtedly put into the POS, which means that one needs to be in the "business" of renting. Moreover, those POSs have another rule solely applicable to members that are corporations or other business entities, which states that such entities' use of the rooms and facilities at the resorts is limited to that business's officers, directors and employees (and thus rentals to persons other than officers, directors our employees are prohibited).

If DVC actually enforced those rules and went after members that are professional renters or set up a business to do rentals, that would be fine.

But that is not what DVD is doing. It has issued a new DVC Resort Agreement for the CFW resort, an agreement that can potentially apply to pre-Riviera members, which includes the following at §5.7:


"Except for Ownership Interests owned by DVD, rentals of Vacation Homes to the general public by any of The TWDC Companies including DVD and BVTC, reservation or use of Vacation Homes and facilities of a DVC Resort is limited solely to the personal use of Club Members, their guests, invitees, exchangers, and lessees and for recreational use by corporations or other similar business entities owning Ownership Interests while staying as a registered guest at the DVC Resort. Except for any of The TWDC Companies, purchase of an Ownership Interest and reservation or use of Vacation Homes and facilities of a DVC Resort for commercial purposes or for any purpose other than personal use is expressly prohibited. BVTC shall be the sole determiner, in its discretion, of any use or activity that does not constitute personal use or constitutes commercial use under this Agreement. Such commercial purpose could include a pattern of rental activity of reserved Vacation Homes or frequent occupancy by others of reserved Vacation Homes other than a Club Member or the Club Member's family; use of regular rental or resale advertising; creating, maintaining, or frequent use of a rental or resale website; repeated or frequent purchase and resale of Ownership Interests whether in the name of a Club Member or those related to such Club Member or through the use of entities, partnerships, or trusts; or the acquisition of a number of Ownership Interests in excess of the amount of the maximum permitted. ownership whether in the name of a Club Member or those related to such Club Member or through the use of entities, partnerships, or trusts."

The section thus does away with the "reasonableness" standard in pre-Riviera POS's for determining a violation and gives BVTC absolute power to determine any issue. And it says a "pattern of rental activity" of Vacation Homes can itself be a violation without defining "pattern" or that it has to amount to being a commercial enterprise like the pre-Riviera POS's. It says just "frequent" occupancy by persons other than the member or members family can be found improper and does not define "frequent." It says "frequent" (again undefined) use of a rental or resale website, "repeated or frequent" (undefined) purchase and resale of ownership interests by the member or those related to the member, etc. And with the absolute power to make determinations, BVTC can decide, if it feels like it, that even two or three events in a year means you are violating the rules, and the member has no right to challenge the decision made.

And to top it all off, that section is in the CFW DVC Resort Agreement despite that all the pre-Riviera DVC Resort Agreements declare that any future DVC Resort Agreement for a new resort "shall be substantially similar to this Agreement in all material respects." And not only do those prior DVC Agreements have no such rental restriction terms, BVTC, until now, never even had any power at all to determine rental issues.

There are other additions to the CFW DVC Resort Agreement that never existed before, including, for example, that BVTC can now annually reallocate points needed per night by moving points between room sizes, e.g., it can lower them year round for 2BRs while raising them year round for studios, a power that BVTC never had before and is contrary to prior POS's that limited such changes to shifting points among seasons for the same room sizes. And that is a term obviously added to apply to pre-CFW resort owners since CFW cabins are all the same size and require the same number of points per night. In essence, the major problem here is not enforcement of prior commercial purpose rules that have long existed. The major problem is that DVD has clearly now decided that, whenever it feels like it, it can just do away with any prior agreements it has made with members. Existing members should be objecting to that. It improperly created new rules before with the resale restrictions but, at least for those, it excluded their application to members who purchased before the rules were created. It has created no exclusion for existing owners to the new rules.

I know this has been discussed somewhat - but how can Disney say a new “agreement” that was never signed by pre Riviera owners now is the agreement that applies to them?

 

[Bearval]

I don’t necessarily agree that people are getting shut out of their home resorts for rentals….maybe key rooms? But even so, IMO, even if they were completely stopped, some rooms and certain times would be just as difficul,

Even if a thousand members are renting a few hundred points, it’s within the rules, whether they advertise on their own or use a brokerr. That is what I am talking about in terms of rules…limiting how one can secure a rental to me, is a big deal and I don’t think we should have rules to say how we can acquire one.

All DVC has to do is monitor the memberships and go from there…it should not matter where the renter came from…if an owner is outside the norm and renting in a way that appears they are making a business out of it, then those owners can be dealt with…no need to make any further rules.

I don't believe DVC is going to do anything about members renting out points to make the system "fair" for us to book rooms. The only reason they would do anything is because they now see the "commercial sites/companies" as direct competitors for vacationers who want a deluxe villa to stay in. Disney as a whole is looking to plug all the leaks in their revenue stream. DVC may try and spin this as a move to benefit DVC owners but you better believe they would only do it if it was a benefit to them.

 

[AnnaKristoff2013]

I don't believe DVC is going to do anything about members renting out points to make the system "fair" for us to book rooms. The only reason they would do anything is because they now see the "commercial sites/companies" as direct competitors for vacationers who want a deluxe villa to stay in. Disney as a whole is looking to plug all the leaks in their revenue stream. DVC may try and spin this as a move to benefit DVC owners but you better believe they would only do it if it was a benefit to them.

Oh, it’s definitely this. Places like the board sponsor are advertising everywhere. Every YouTube channel that even mentions Disney, every website, people are inundated with “Get a Disney Deluxe room at 65 percent off!” At some point Disney has to conclude they are losing money. It’s a matter of when, not if. With all that said, if they do take action, it will still benefit those of us who are not commercial renting, because it will necessarily increase availability for hard to get rooms and times. (And will also increase breakage).

 

[Nabas]

I don't believe DVC is going to do anything about members renting out points to make the system "fair" for us to book rooms. The only reason they would do anything is because they now see the "commercial sites/companies" as direct competitors for vacationers who want a deluxe villa to stay in. Disney as a whole is looking to plug all the leaks in their revenue stream. DVC may try and spin this as a move to benefit DVC owners but you better believe they would only do it if it was a benefit to them.

DVC went through a fair amount of effort to rebalance the point charts to make it more fair for DVC members to book rooms.

I’m not sure why they wouldn’t do the same for commercial renters who violate the terms of the contract that they signed.

If it becomes widely known that people are unable to book the DVC stays they want because of commercial renters, then it’s going to become more difficult for Disney to sell points.

For example, a disboards reader viewing this thread might ask themselves if DVC is worth buying if they are going to be unable to book the rooms they want.

 

[Brian Noble]

If it becomes widely known

It doesn’t have to be true. It just has to be widely believed.

 

[Bearval]

DVC went through a fair amount of effort to rebalance the point charts to make it more fair for DVC members to book rooms.

I’m not sure why they wouldn’t do the same for commercial renters who violate the terms of the contract that they signed.

If it becomes widely known that people are unable to book the DVC stays they want because of commercial renters, then it’s going to become more difficult for Disney to sell points.

For example, a disboards reader viewing this thread might ask themselves if DVC is worth buying if they are going to be unable to book the rooms they want.

DVC also went through a fair amount of effort to manipulate the point charts which benefited Disney until the members threw a fit.

 

[Bearval]

Oh, it’s definitely this. Places like the board sponsor are advertising everywhere. Every YouTube channel that even mentions Disney, every website, people are inundated with “Get a Disney Deluxe room at 65 percent off!” At some point Disney has to conclude they are losing money. It’s a matter of when, not if. With all that said, if they do take action, it will still benefit those of us who are not commercial renting, because it will necessarily increase availability for hard to get rooms and times. (And will also increase breakage).

Yes, I do agree that if they crack down on commercial renting it will be a "side" benefit to those not commercial renting.

 

[lowlight]

For example, a disboards reader viewing this thread might ask themselves if DVC is worth buying if they are going to be unable to book the rooms they want.

Not only does it likely deter some future sales, there are owners like myself that are so frustrated at the 11 month booking difficulty the last two years that we are thinking of selling. I refuse to walk my reservations, so if that means I’ll never get the first two weeks of December (and not just standard views), I will sell my contracts. The product is a great product, but like everything in life, people learn to min/max it and ruin it. I don’t know which is the chicken or the egg, but walking and spec renting are making it a hell of a product to use at some resorts at the times of the year when I’ve traditionally had difficulty, but not impossibility.

 

[Ursula J]

Just wanted to chime in as a hopeful non-owner. I follow DVC closely because I want to buy in. But the main reasons we don't are 1. College for kiddo. 2. I hate the mega-renter systems that make it stressful or impossible to book without things like walking. The first problem is temporary, just a few years. The second could be addressed by a crackdown. I'm saying I don't think we're the only family that would be more likely to buy DVC if the system worked for people who want to use it. It shouldn't be an investment, or a way to profit. It should be a way for families like mine to be able to plan for a lifetime of memories.

 

[DonMacGregor]

This article by @pkrieger2287 at DVC Resale Market reared it's head again today on the DVC Fan Facebook page:

Is it Possible to Use Your DVC Membership to Pay Your DVC Dues?

Interesting read, given the article only dates back to January 2nd of this year, and the discussions we've had on here more recently. The comments section is of particular interest.

 

[Sandisw]

This article by @pkrieger2287 at DVC Resale Market reared it's head again today on the DVC Fan Facebook page:

Is it Possible to Use Your DVC Membership to Pay Your DVC Dues?

Interesting read, given the article only dates back to January 2nd of this year, and the discussions we've had on here more recently. The comments section is of particular interest.

Very interesting.

 

[DonMacGregor]

Very interesting.

Yeah, I lost count of the number of times the word "income" was used in the article and comments. Basically, it's DVC Resale Market saying "Hey, come on over and we'll sell you a bunch of points for the specific purpose of renting those points for profit as income. Oh, and here's a road map for you."