DVC plans to target commercial renters

[Sandisw]

Disney is all of them, and they would not allow the docs to tie the hands of one of the companies but not the other. Legally, that is not even an option.

For example:

1. Amendments. DVC Operator reserves the right to amend these Rules and Regulations, in its discretion. These changes
may affect a Club Member’s right to use, exchange, or rent the Club Member’s Ownership Interest and may impose
obligations upon the use and enjoyment of the Club Member’s Ownership Interest and the appurtenant Club Membership.
Club Members will be notified of any such changes through Member Services publications, including posting on a Club
website. Current publications supersede prior publications with respect to the terms and conditions of these Rules and
Regulations.

My point is that some things that apply to home resort don’t always apply to the rules for trading into BVTC.

FL timeshare law does not allow rules to be different based on where you bought your points. Resale and direct owners must have the same home resort rules and regulations for using their home resort.

It is also why there is the DVC Membrrhsip Agreement and the DVC Resort Agreement. They cover two different things.

Just pointing out because BVTC is used for exchanges, there are things related to other parts of the contract that do require an owner’s vote that might not be needed for changes to that.

Given @drusba legal background, she has a very good and in depth understanding of what can and can not happen with DvC.

 

[Chuck S]

Disney is all of them, and they would not allow the docs to tie the hands of one of the companies but not the other. Legally, that is not even an option.

For example:

1. Amendments. DVC Operator reserves the right to amend these Rules and Regulations, in its discretion. These changes
may affect a Club Member’s right to use, exchange, or rent the Club Member’s Ownership Interest and may impose
obligations upon the use and enjoyment of the Club Member’s Ownership Interest and the appurtenant Club Membership.
Club Members will be notified of any such changes through Member Services publications, including posting on a Club
website. Current publications supersede prior publications with respect to the terms and conditions of these Rules and
Regulations.

Yes, but remember, such changes (while not mentioned in the Disclosure) must be done with the approval/review/filing of said changes with the Florida commision that oversees timeshares, and Florida, by law, says we have the right to rent our points/reservations. And both DVC and the respective states are pretty vague in their definitions of personal use versus commercial renting.

 

[dvcsince93]

Yes, but remember, such changes (while not mentioned in the Disclosure) must be done with the approval/review/filing of said changes with the Florida commision that oversees timeshares, and Florida, by law, says we have the right to rent our points/reservations. And both DVC and the respective states are pretty vague in their definitions of personal use versus commercial renting

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!

 

[zavandor]

How did the conversation escalate from "someone has hundreds of AKV value reservations for rent" to "you cannot rent even one reservation for more than the MF"?

 

[nalababybear]

How did the conversation escalate from "someone has hundreds of AKV value reservations for rent" to "you cannot rent even one reservation for more than the MF"?

Slippery slope does that.

 

[ehh]

So much of the talk has been about the inventory consumed by commercial renters, or where the line for 'commercial' is. I want to zoom out a little bit:

Non-commercial renters should be ecstatic for a crackdown on commercial renters now that a sizeable industry, and the demand to support it, has been built up, in part, by commercial renters.​

​

Simply: a meaningful crackdown is going to make renting supply more scarce and this should drive up prices for renting owners.

Commercial renters have not just been taking high-value rooms from non-renting owners, they've also saddled the rental market with as much supply as they can generate, reducing what non-commercial renting owners can make.

The irony icing on the cake: non-commercial renting owners can thank commercial renters for driving up demand over the years.

 

[xdan0920]

How did the conversation escalate from "someone has hundreds of AKV value reservations for rent" to "you cannot rent even one reservation for more than the MF"?

I don't think anyone is really saying that. The discussion point we arrived at was quite different, IMO.

 

[Cyberc1978]

Given the definition of commercial within U.S. Commercial Code, which is what contracts are written under (and then state law) it depends on profit, not volume. If you make one reservation a year and make $1000 in profit off of it, its commercial. If you make 50 reservations a year and only cover dues on the points you are renting out, that isn't commercial.

How Would Disney know if I rent a reservation and makes a $1,000 in profit or only cover my dues?

If they require me to send in the contract between me and the renter then that would be easy to circumvent. If they ask the renter at checkin then that would be nothing more than “he said she said”

 

[Cyberc1978]

Some seem to believe one rental by a member, or perhaps a few, could be found to be a violation of the terms of the POS's declarations. None of the POS's declarations limit the right to rent to one or only a few rentals. The pre-Riviera resorts' declarations expressly allow multiple rentals by a member, and the only restriction is that a member cannot engage in a pattern of rental activity from which the association can reasonably conclude shows the member is engaging in a commercial enterprise.

Those declarations were drafted by lawyers, and there are statutes that use the term commercial enterprise, and it has a generally recognized legal meaning: it refers to someone engaging in the "business'' of something. There are likely some members who do many rentals as a business, but the likely majority of rentals do not fit within the restriction in the declarations, e.g., doing some profitable rentals to offset dues, doing some rentals to use points you will not be able to use, doing rentals of confirmed reservations that you learn you cannot use, doing some rentals to friends or family, are not things that lead to the conclusion that one is in the business of doing rentals. In June 2008, DVC itself recognized the limitations to its power to restrict when it created a rule that said that any member doing more than 20 reservations in a year would be presummed to to be violating the rental restriction, but it was a presumption that the member could overcome.

In essence. doing one or some reservations for profit is not a violation of the terms of those POS's. The rules stated in the POS's have changed for the three newly created DVC resorts starting with Riviera, and with the most retractions in the CFW POS, but even those do not say or imply that a single or a few rentals in a year could be a violation. You cannot state a member has a right to rent and then say just doing a few rental violates the rules.

Moreover, particularly as to the pre-Riviera DVC Resorts (which includes the additions to VGF and Poly), DVC faces the problem that what is in the declarations is a "material" term, and the ability to do some rentals cannot be reduced by any new, more restrictive "rule" absent an amendment to the declarations, which is subject to the vote of all the members of a resort.

I don’t doubt what you are saying is true. But how would DVC be able to enforce a more firm rule?

If I rent all of my points regardless of how many I own I would say I was in breach at least yoy - but if I only rent 40% or 50% - would that be solely up to DVC to determine if I was in breach or not? It could potentially be 1 or 2 rentals but still a high overall % of points.

Furthermore @Brian Noble have mentioned some strict renting rules at Wyndham. If Wyndham is able to implement those why shouldn’t DVC be able to do the same?

 

[Chuck S]

Furthermore @Brian Noble have mentioned some strict renting rules at Wyndham. If Wyndham is able to implement those why shouldn’t DVC be able to do the same?

Most Wyndham resorts are set up as a trust, much like the Fort Wilderness Cabins. They are not set up as a legal ownership interest like most DVC resorts. And Wyndham is strongly encouraging older timeshare owners to conver their points into the trust. That could have something to do with it. And it could explain why DVC is seeing how that format flies with owners at the Cabins. From Wiki: A 2020 class action lawsuit claimed Wyndham aggressively marketed its timeshares and unfairly profited from customers by requiring them to assign their timeshare interest to a trust from which Wyndham benefits.

 

[Cyberc1978]

Most Wyndham resorts are set up as a trust, much like the Fort Wilderness Cabins. They are not set up as a legal ownership interest like most DVC resorts. And Wyndham is strongly encouraging older timeshare owners to conver their points into the trust. That could have something to do with it. And it could explain why DVC is seeing how that format flies with owners at the Cabins. From Wiki: A 2020 class action lawsuit claimed Wyndham aggressively marketed its timeshares and unfairly profited from customers by requiring them to assign their timeshare interest to a trust from which Wyndham benefits.

It would definitely be interesting to know if that was the case.
If its the case I can see why DVC would want to add more resorts or even the current ones into a trust.
To add the O14 to the trust I guess they can only add entire units and maybe some of PIT would end up in there too.

 

[Chuck S]

It would definitely be interesting to know if that was the case.
If its the case I can see why DVC would want to add more resorts or even the current ones into a trust.
To add the O14 to the trust I guess they can only add entire units and maybe some of PIT would end up in there too.

I tend to think the current 2042 resorts will not be converted until their ownership interest expires, then they'll be fully refurbished or perhaps even rebuilt, and brought into the trust when sales begin to new members, if the trust works out like DVC thinks it will. I also think OKW may add small elevators to all their buildings at that time. But hoinestly, I doubt I'll still be around, or if I am, I may not be going to Disney, as I'll be in my mid 80s...of course, never say never depending upon medical advances. My Mom was going to Disney twice a year until she passed at 87 during heart valve replacement surgery. And she was still riding some of the coasters and Mission Space Orange.

 

[Sandisw]

How did the conversation escalate from "someone has hundreds of AKV value reservations for rent" to "you cannot rent even one reservation for more than the MF"?

I think it was in light of the extremes that DVC could do….but I am back to what my original thought has always been.

They plan to go after owner with a lot of points and who appear to be running a business from their memberships.

I do not see them targeting or limiting the rooms one can rent nor make rules that differentiate between spec rentals vs on demand rental.

 

[nalababybear]

So much of the talk has been about the inventory consumed by commercial renters, or where the line for 'commercial' is. I want to zoom out a little bit:

Non-commercial renters should be ecstatic for a crackdown on commercial renters now that a sizeable industry, and the demand to support it, has been built up, in part, by commercial renters.​

​

Simply: a meaningful crackdown is going to make renting supply more scarce and this should drive up prices for renting owners.

Commercial renters have not just been taking high-value rooms from non-renting owners, they've also saddled the rental market with as much supply as they can generate, reducing what non-commercial renting owners can make.

The irony icing on the cake: non-commercial renting owners can thank commercial renters for driving up demand over the years.

Interesting observation.

Pigs get fat, hogs get slaughtered idiom may hold true here.

 

[Brian Noble]

Clear example where the need for Disney to define what they believe is commercial

I agree that DVC needs to define commercial renter if it is serious about addressing the issue.

the reality is DISNEY/DVC has to set a reasonable definition and stick to it

If Disney follows in the footsteps of other timeshare systems, they will NOT do this. At least, not publicly. Instead it will be this:

Disney is going to call it whatever they want; and it sounds like they will try to remain avoiding officially defining it

This gives them the flexibility of applying the Justice Stewart standard: "I know it when I see it."

Most Wyndham resorts are set up as a trust, much like the Fort Wilderness Cabins. They are not set up as a legal ownership interest like most DVC resorts.

Not quite. The commercial use restriction in Wyndham is applied to all of the properties---deeded or trust---by virtue of their enrollment in the points system. Owning deeded vs. an interest in the trust is immaterial in how Wyndham treats renting. That's true even for properties that are undivided interests (UDI) and have no meaning outside the point system--which is similar to how must non-Cabin DVC properties are structured.

 

[Cyberc1978]

If Disney follows in the footsteps of other timeshare systems, they will NOT do this. At least, not publicly. Instead it will be this:

This gives them the flexibility of applying the Justice Stewart standard: "I know it when I see it."


Not quite. The commercial use restriction in Wyndham is applied to all of the properties---deeded or trust---by virtue of their enrollment in the points system. Owning deeded vs. an interest in the trust is immaterial in how Wyndham treats renting. That's true even for properties that are undivided interests (UDI) and have no meaning outside the point system--which is similar to how must non-Cabin DVC properties are structured.

How does this line up with what @drusba mentioned in his reply?

 

[MICKIMINI]

Regarding Wyndham, we "bought" (actually it was free but for about $200) several years ago to be able to stay at Bonnet Creek for longer trips. We were able to use it the first year and recoup our big purchase LOL. We found using it terribly restrictive vs DVC. Our UY was January but we had to make reservations for fall by March. Changing nights or adding or subtracting was a nightmare and very restrictive. I just had that sick feeling about the whole thing once I tried using it.

Due to building a new home in 2023 we were too busy to travel and too intimidated to rent it ourselves as reservations were being cancelled (it would have been 2+ weeks in a 1 BR at WBC). We listed it for rent through Wyndham and they had an exchange rental in San Fran booked. When I called to see where the payment was they told us the renters cancelled and we got nothing. There was NO communication from Wyndham. We were able to give it back and wash our hands of them. We broke even.

We've been DVC since 1996 and I can't imagine having to go through that kind of BS. It was stressful and I just felt like the product was okay IF you were able to use it. Just saying...we need to be careful in what we wish for.

 

[nalababybear]

Regarding Wyndham, we "bought" (actually it was free but for about $200) several years ago to be able to stay at Bonnet Creek for longer trips. We were able to use it the first year and recoup our big purchase LOL. We found using it terribly restrictive vs DVC. Our UY was January but we had to make reservations for fall by March. Changing nights or adding or subtracting was a nightmare and very restrictive. I just had that sick feeling about the whole thing once I tried using it.

Due to building a new home in 2023 we were too busy to travel and too intimidated to rent it ourselves as reservations were being cancelled (it would have been 2+ weeks in a 1 BR at WBC). We listed it for rent through Wyndham and they had an exchange rental in San Fran booked. When I called to see where the payment was they told us the renters cancelled and we got nothing. There was NO communication from Wyndham. We were able to give it back and wash our hands of them. We broke even.

We've been DVC since 1996 and I can't imagine having to go through that kind of BS. It was stressful and I just felt like the product was okay IF you were able to use it. Just saying...we need to be careful in what we wish for.

This.

DVC is the darling of the timeshare industry. There simply isn't a comparable product out there.

If they do make it more cumbersome for families and ownership, the entire house of cards can collapse rather quickly.

It caught our attention around 2010 as something different from other timeshares from family friends and extended families but we didn't take the dive for another ten years even as the kids got older.

The convenience and simplicity is what sets this apart from all the other systems.

Disney doesn't need to emulated anyone.

 

[xdan0920]

Just saying...we need to be careful in what we wish for.

I don’t. I never have rented and never will. So I’m not concerned with “unintended consequences”

 

[DonMacGregor]

Can someone 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!

Did we get an answer to this?