DVC plans to target commercial renters

[DonMacGregor]

Can someone can point me to the provisions of Florida law protecting owners right to rent their points/reservations. I'm curious as those would likely be important in consideration of changes any changes that DVC offers.

Thanks!

I still haven't seen an answer to this (and I've now quoted this original post several times).

 

[Nabas]

I still haven't seen an answer to this (and I've now quoted this original post several times).

Florida Statute 721 Part 1 covers timeshares.

https://www.flsenate.gov/Laws/Statutes/2011/Chapter721/All

I could not find anything within the statute granting an owner an explicit right to rent their timeshares. I did find Internet references elsewhere suggesting that you need to check your timeshare bylaws.

As I mentioned in a previous post, Florida Statute 721.13(12)(a) appears to grant Disney significant power to determine how DVC is used "in the best interests of the owners as a whole".

I suggest reading the statute to see if you can find something.

 

[Nabas]

Note that the typical DVC Public Offering Statement (POS) includes the following (this for BWV):

Purchase of an Ownership lnterest or use of the Vacation Homes and facilities of Disney's BoardWalk Villas for commercial purposes (excluding use by the TWDC Companies) or for any purpose other than the personal use described in this Public Offering Statement is expressly prohibited. [emphasis added] To encourage purchase for personal use, Owners may not currently aggregate Ownership Interests so as to compile more than 4000 Home Resort Vacation Points per DVC Resort or an aggregate of 8000 Home Resort Vacation Points at all DVC Resorts, and use by corporations or other business entities is strictly limited to recreational use by their directors, officers, principals, or employees, For the purpose of determining the total number of Vacation Points compiled, no separation shall be made of Ownership Interests owned by the same person(s) with other person(s) or entity(ies) in which any such person has a partnership, membership, beneficial or ownership interest,​

And:

Personal Use. Except for Units owned by DVD, which may be utilized as provided in this Declaration, each of the Vacation Homes shall be occupied only as vacation accommodations. Use of the accommodations and recreational facilities of the Condominium is limited solely to the personal use of Owners, their lessees, guests, exchangers and invitees and for recreational uses by corporations and other entities owning Ownership Interests in a Unit. Use of Vacation Homes and recreational facilities for commercial purposes or any purposes other than the personal use described herein is expressly prohibited. "Commercial purpose" shall include a pattern of rental activity or other occupancy by an Owner that the Association, in its reasonable discretion, could conclude constitutes a commercial enterprise or practice. [emphasis added]​

And:

Compliance; Personal Use: Commercial Purposes. Failure of a Club Member to comply with the terms and conditions of this Agreement, the Home Resort Rules and Regulations or the Condominium Documents may result in the denial of the right of the non-complying Club Member to reserve, check in or use the Vacation Homes and facilities of the Condominium or to voluntarily participate in the DVC Reservation Component by requesting a reservation for accommodations at other DVC Resorts until such time as the Club Member is in compliance. Use of the Vacation Homes and facilities of the Condominium 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 Condominium. Purchase of an Ownership Interest or use of Vacation Homes and facilities of the Condominium for commercial purposes or for any purpose other than the personal use described above is expressly prohibited.​

Cornell Law offers the following legal definition of commercial:

used for commercial purposes​

(10) Used for commercial purposes .— The term “used for commercial purposes” means the carriage of persons or property for any fare, fee, rate, charge or other consideration, or directly or indirectly in connection with any business, or other undertaking intended for profit.​

Based on Florida Statute 721.13(12)(a) (which I quoted in a previous post) and the apparent lack of an express right granted elsewhere in Florida Statute 721, it appears that Disney has significant power to curb commercial activity as long as it's "in the best interests of the owners as a whole".

 

[Nabas]

One more thought related to my prior posts.

I interpret the above Florida Statutes, legal definitions, and DVC POS to mean that we are allowed to rent points to cover our costs (hence the reference to lessees in the POS).

IMO, it's OK to rent points to cover all your DVC costs, not just the costs of the points you rent to someone else. Stated differently, if you have more points than you personally use or provide free of charge to family & friends, then you can rent excess points to cover the cost of the points you're renting out (including original purchase price & annual Maintenance Fee) as well as the points you're actually using. In effect, my interpretation is that you can rent enough points to give yourself free DVC vacations because this is not "intended for profit". This interpretation also would be consistent with what I recall DVC guides telling some members, encouraging members to buy more points to cover costs.

Still, a free hotel room is a consideration so Disney might not agree with this. Ultimately, it's their interpretation that matters.

 

[Cyberc1978]

One more thought related to my prior posts.

I interpret the above Florida Statutes, legal definitions, and DVC POS to mean that we are allowed to rent points to cover our costs (hence the reference to lessees in the POS).

IMO, it's OK to rent points to cover all your DVC costs, not just the costs of the points you rent to someone else. Stated differently, if you have more points than you personally use or provide free of charge to family & friends, then you can rent excess points to cover the cost of the points you're renting out (including original purchase price & annual Maintenance Fee) as well as the points you're actually using. In effect, my interpretation is that you can rent enough points to give yourself free DVC vacations because this is not "intended for profit". This interpretation also would be consistent with what I recall DVC guides telling some members, encouraging members to buy more points to cover costs.

Still, a free hotel room is a consideration so Disney might not agree with this. Ultimately, it's their interpretation that matters.

Thanks for the insights.

I also stumbled upon the word lessees in the POS and frankly I’m unsure how to interpret it. If I gift my family a DVC vacation they are still a lessee as they don’t own as I do.

As for the part that you can rent to give yourself a free vacation - I’m unsure about that.

 

[HyperspaceMountainPilot]

Thanks for the insights.

I also stumbled upon the word lessees in the POS and frankly I’m unsure how to interpret it. If I gift my family a DVC vacation they are still a lessee as they don’t own as I do.

As for the part that you can rent to give yourself a free vacation - I’m unsure about that.

I also am not sure what is intended by lessee in the POS, but I’m not aware of any UCC law interpretations that wouldn’t consider renting half (or 1/3) of your points for a profit to subsidize other travel as commercial activity. I am not a Florida real estate lawyer, so maybe someone will point to local interpretations that prove me wrong. As a general principle, occasional rentals that are designed to dispose of points that can’t be used is very different than regularly renting for the purpose of delivering predictable profits— and plowing routine profits back into Disney vacations doesn’t somehow change the commercial nature of such rental transactions.

 

[Nabas]

I also am not sure what is intended by lessee in the POS, but I’m not aware of any UCC law interpretations that wouldn’t consider renting half (or 1/3) if your points for a profit to subsidize other travel as commercial activity. I am not a Florida real estate lawyer, so maybe someone will point to local interpretations that prove me wrong. As a general principle, occasional rentals that are designed to dispose of points that can’t be used is very different than regularly renting for the purpose of delivering predictable profits— and plowing routine profits back into Disney vacations doesn’t somehow change the commercial nature of such rental transactions.

The rational part of me agrees with you. However, I’m trying to be optimistic in my interpretation. In addition, I’m trying to reconcile the POS with what I heard DVC Guides explain to potential DVC buyers. (I’ve heard this twice. I suspect others have heard the same spiel as well.)

I’m also trying to balance this with what DVC News reported:

In a later session Sakaske was even more direct, saying that while they have no issues with members occasionally renting points, "[y]ou just can’t do it commercially. That is against our rules. We are actively pursuing plans to go after those people and stop that behavior."​

All of the board members agreed that commercial rental activity is just a small portion of all member reservations. However, commercial renters tend to be among the most knowledgable owners, attempting to maximize their own revenue stream by targeting resorts, rooms and dates which will yield the greatest returns.​

Specifically, I am trying to take into account that occasionally renting points is ok and it’s just a small portion of all member reservations. Also trying to take into the “20 reservations” guidance that Disney provided at one time.

If they want, Disney could come down really hard. If they do, then this could affect a lot of DVC members.

I understand why those who regularly rent points might be extremely concerned. IMO, there’s a big gap between occasionally renting your points (which I interpret to mean once every few years) and commercially renting your points (which I interpret to mean renting the vast majority of your points for profit).

I don’t think I’ll be affected by any change but if Disney comes down hard, I suspect a lot who list points on Disboards could be affected. For their sake, I’m hoping Disney focuses on the most egregious renters.

 

[Nabas]

Thanks for the insights.

I also stumbled upon the word lessees in the POS and frankly I’m unsure how to interpret it. If I gift my family a DVC vacation they are still a lessee as they don’t own as I do.

As for the part that you can rent to give yourself a free vacation - I’m unsure about that.

Here’s one legal definition:

Lessee​

A lessee is a person who takes temporary possession of a lessor’s property interest through a lease.​

​

The POS clearly references lessees, so some renting seems to be acceptable to Disney.

 

[muppets3d]

Renters aren't owners. Different folk. Renters CAN become owners once they get the taste and start crunching numbers. As you said >10 years.

Timeshares, even DVC, makes a poor investment vehicle. At scale it can work. At the individual level, the simplicity is what makes it worthwhile to keep and even dump when done with the relative resale value maintained. That is rather unique for timeshares. Disney knows this.

Will they inadvertently kill the golden goose?

I don't know what Disney could do to kill DVC's resale value more than they've already done with exchange restrictions and the DVC-Y program etc. Even Riviera resale is far from worthless, especially compared to most any other timeshare product. It turns out that just being on Disney property has inherent value that makes the product worthwhile.

 

[xdan0920]

One thing I want to kind of address....

I keep seeing the phrase.... "It doesn't matter what we think, it is about what Disney thinks" or some such....

This is totally wrong IMO. This is all about what we, the rank and file DVC members think. If Dis is hearing constantly from members that renting, especially spec renting, is a problem, they will address it. So it's important, if you feel as I do, that you keep stating so. More importantly, keep telling your guide about the issue. I know I do.

 

[muppets3d]

The rational part of me agrees with you. However, I’m trying to be optimistic in my interpretation. In addition, I’m trying to reconcile the POS with what I heard DVC Guides explain to potential DVC buyers. (I’ve heard this twice. I suspect others have heard the same spiel as well.)

I’m also trying to balance this with what DVC News reported:

In a later session Sakaske was even more direct, saying that while they have no issues with members occasionally renting points, "[y]ou just can’t do it commercially. That is against our rules. We are actively pursuing plans to go after those people and stop that behavior."​

All of the board members agreed that commercial rental activity is just a small portion of all member reservations. However, commercial renters tend to be among the most knowledgable owners, attempting to maximize their own revenue stream by targeting resorts, rooms and dates which will yield the greatest returns.​

Specifically, I am trying to take into account that occasionally renting points is ok and it’s just a small portion of all member reservations. Also trying to take into the “20 reservations” guidance that Disney provided at one time.

If they want, Disney could come down really hard. If they do, then this could affect a lot of DVC members.

I understand why those who regularly rent points might be extremely concerned. IMO, there’s a big gap between occasionally renting your points (which I interpret to mean once every few years) and commercially renting your points (which I interpret to mean renting the vast majority of your points for profit).

I don’t think I’ll be affected by any change but if Disney comes down hard, I suspect a lot who list points on Disboards could be affected. For their sake, I’m hoping Disney focuses on the most egregious renters.

Whatever happens, I think resale and rental brokerage sites won't be sponsoring nearly as many podcasts, youtubers, etc., in the future. And frankly less formulaic vapid Disney content on the internet is a good thing.

 

[Chuck S]

But if someone list it on Facebook they use their real name and then they would be easy to find.

Never heard of fake facebook accounts?

 

[Brian Noble]

what I heard DVC Guides explain to potential DVC buyers

I would discount this part. Steeply. Guides are sales people, and the sales agreement reminds us not to rely on verbal representations.

 

[Nabas]

I would discount this part. Steeply. Guides are sales people, and the sales agreement reminds us not to rely on verbal representations.

DVC sales guides are perhaps the most reputable in the timeshare business. If some recommended buying more points to then rent them in order to offset costs, I would not be surprised if they received this guidance from leadership at one point.

But this also could be similar to the “soda for life” spiel we were told when we purchased our onsite mugs many years ago. Yeah, they meant it then but they don’t mean it now.

 

[muppets3d]

One thing I want to kind of address....

I keep seeing the phrase.... "It doesn't matter what we think, it is about what Disney thinks" or some such....

This is totally wrong IMO. This is all about what we, the rank and file DVC members think. If Dis is hearing constantly from members that renting, especially spec renting, is a problem, they will address it. So it's important, if you feel as I do, that you keep stating so. More importantly, keep telling your guide about the issue. I know I do.

Well, at the end of the day Disney (specifically DVC) will be who chooses what is done.

Listening to the membership is obviously important. But I recall a post a few weeks ago on here that said DVC shouldn't allow cancellations. So there is certainly a need for Disney and DVC to run everything they hear from the membership through a filter before consdering action. I am glad they seem to be choosing to be very cautious about how they handle the commercial renting issue.

 

[sethschroeder]

One thing I want to kind of address....

I keep seeing the phrase.... "It doesn't matter what we think, it is about what Disney thinks" or some such....

This is totally wrong IMO. This is all about what we, the rank and file DVC members think. If Dis is hearing constantly from members that renting, especially spec renting, is a problem, they will address it. So it's important, if you feel as I do, that you keep stating so. More importantly, keep telling your guide about the issue. I know I do.

There are so many people on so many target that think Disney can do whatever they want.

Its not even what we think completely its what the law thinks.

Also I dont have a guide and I suspect most dont. What you need to do in that case is just go on the DVC site and send a message. They do answer and respond to those.

 

[sndral]

Another twist is that ‘lessee’ is a term used to refer to exchangers in programs such as RCI & II.

 

[sethschroeder]

Oh and renting out your points is not going anywhere as long as you are doing it the "normal" way where you have 50/100/300 points and rent it out to 1-2 people entering their details at the time of reservation (not changing the name later).

What Disney can catch is if your name (or companies) are tied to 10 different reservations of different people every single year. They can also catch if you constantly are booking 1/2/3/4 separate reservations on race weekend, on new years even, on 4th of July after which you change the name on all the reservations weeks or months later.

I would bet on AI being used to help track down commercial renters as well.

 

[lowlight]

Still, a free hotel room is a consideration so Disney might not agree with this. Ultimately, it's their interpretation that matters.

But you aren’t running a business with write offs. That you’ve only used the profit off renting your excess points to pay for your MF’s and a vacation to Disney is irrelevant in my eyes. How would you prove you used the 20k profit for a trip to Disney and not a car? And I’m not ok with people renting their points to pay for their MF’s and get a free trip to Disney every year. I don’t want to compete for good rooms against non owners on a regular basis. Just my opinion, but I hope that DVC goes hard on these owners after they’ve gone after the big ones.

 

[Chuck S]

One thing I want to kind of address....

I keep seeing the phrase.... "It doesn't matter what we think, it is about what Disney thinks" or some such....

This is totally wrong IMO. This is all about what we, the rank and file DVC members think. If Dis is hearing constantly from members that renting, especially spec renting, is a problem, they will address it. So it's important, if you feel as I do, that you keep stating so. More importantly, keep telling your guide about the issue. I know I do.

But at the same time, what percentage of the overall membership are complaining? Should the same percentage complaing that Disney transportation is too expensive be able to expect DVC to change to a private bus provider, like Swalfin and Shades of Green? Or change the maintenance company, or replace Olivia's with a Jack in the Box? Then consider that the majority of those complaining are basically the small point (100 to 125 points) owners. DVC helped create this issue by allowing contracts of less than the original 230 points, and permitting small add-on contracts at many resorts, rather than requireing a new full point membership for each resort, and not merging smaller add-ons at your home resort into the original home resort contract.

And why are many small contracts contributing to the problem? It creates a much larger base of owners competing ONLY for these value and standard studios, without the flexibility to move up to a one bedroom unit if the studios are already spoken for.

I'd be curious to see what percentage of owners have just enough points to stay a week in a studio annually. Then also consider that newer guaranteed week contracts will also take studios out of the overall system during prime weeks of the year.