New Definition of Rental Activity?

[kes601]

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.

It's interesting the article is dated Jan 2, 2024, but the comments are from 2017 and 2018.....

 

[DonMacGregor]

It's interesting the article is dated Jan 2, 2024, but the comments are from 2017 and 2018.....

Yeah, I assumed they reposted an old article, which makes the timing even more curious.

 

[kes601]

Yeah, I assumed they reposted an old article, which makes the timing even more curious.

Agreed.

 

[SL6827]

So Disney is realizing that commercial renters are hindering thier bookings, and this is the main reasoning behind such?

 

[Sandisw]

So Disney is realizing that commercial renters are hindering thier bookings, and this is the main reasoning behind such?

Other than the language change, nothing else has actually happened.

But, it’s obviously they want to make the language much clearer in reference to what constitutes renting beyond the rules.

 

[DonMacGregor]

Agreed.

"Ok, we have seen the new language in the CFW documents, and we know the new, better defined definition of "renting for commercial purposes", so let's re-post that article from 2017 that tells people exactly how to go about breaking those new renting rules. Let's even refer to the revenue received as "income" and tell people it's a really good idea to buy contracts with the specific intent and primary purpose of using the points not to use for personal reservations, but to rent to generate extra income."

 

[T00dles]

Wonder if DVC will move on commercial rentals only after CFW rentals start showing up online?

 

[SL6827]

Wonder if DVC will move on commercial rentals only after CFW rentals start showing up online?

Why would the cabins possibly get yhier attention moreso?

 

[DonMacGregor]

Why would the cabins possibly get yhier attention moreso?

Because they changed the language specific to rentals in the CFW Master Declaration, and many have opined that the new language cannot be applied retroactively to any resorts that precede CFW?

 

[SL6827]

Because they changed the language specific to rentals in the CFW Master Declaration, and many have opined that the new language cannot be applied retroactively to any resorts that precede CFW?

Oh OK. I can see that. If they can back track with this, what else would they try to and de-grandfather?

 

[DonMacGregor]

Oh OK. I can see that. If they can back track with this, what else would they try to and de-grandfather?

The converse argument is that the "new" language doesn't alter anything, but merely provides additional clarity to what was ambiguous language regarding the definition of a commercial enterprise re: renting.

 

[Bearval]

The converse argument is that the "new" language doesn't alter anything, but merely provides additional clarity to what was ambiguous language regarding the definition of a commercial enterprise re: renting.

I would suspect that DVD added clarity to the language because they intend to address the commercial renting issue more aggressively in the not too distant future.

 

[DonMacGregor]

I would suspect that DVD added clarity to the language because they intend to address the commercial renting issue more aggressively in the not too distant future.

Precisely.

 

[lowlight]

The better question is- what are they waiting for? They had the language, they strengthened the language, and they’ve still enforced zero of it.

 

[Hubalorian]

The better question is- what are they waiting for? They had the language, they strengthened the language, and they’ve still enforced zero of it.

From our optics they haven’t enforced any of it. They could have sent out warning letters to the once they feel are in violation and none of it has surfaced yet. My guess if letters were sent out and they contacted a lawyer, their advice would be to not publicize it

 

[Bearval]

The better question is- what are they waiting for? They had the language, they strengthened the language, and they’ve still enforced zero of it.

My guess would be that the legal team for DVD wanted the language clarified before they begin enforcing it. If you think about it, who would really sue DVD to stop the enforcing of the commercial renting? Regular DVC members? or the commercial DVC owners of points or commercial sites? I know I wouldn't waste my money and time suing, I would just rent out points myself without using an intermediary . The clarification of the language kind of kills the chances of a commercial site suing DVD and winning.

 

[Brian Noble]

many have opined that the new language cannot be applied retroactively to any resorts that precede CFW?

I've read that too. Those opinions might even be right. But my guess is that it will be very expensive--in both time and money--to find out.

DVC has something of a history of following in other timeshare developers' footsteps when it comes to things like resale restrictions, etc. etc. And one thing that other timeshare developers have done is to claim that some owners are renting commercially, and freeze those owners' accounts. It's a "shoot first ask questions later" strategy, except for the question-asking part. There is just the shooting. Sometimes the freezes only limit the ability to send guests, other times the entire account is frozen, period. Sometimes there is a definitive end date to the freeze, other times it's indefinite. It depends a bit on the developer and the person in question, but TUG has reports of both Bluegreen and Wyndham doing this.

An owner in this situation has three options. One: produce evidence that shows these guests were all genuinely friends and family and hope that the developer relents. Two: relent and do whatever the developer wants--in at least one case, this has been "Exit the system entirely, and sign this agreement that you'll never buy again. We will pay you $X for this." Three: take the developer to court.

Any owner who chooses Option Three is in for a very long fight--when Disney wants to be petty, they are very good at it. How many owners can (a) keep losing revenue on the rentals they can't make while (b) they fund a lawsuit against Disney's army of in-house counsel? Not very many. Not very many at all.

"Hold on!" you may be saying. "What about the Base Year Shenanigans? What about the Great Lockoff Premium Theft? In both of those cases, a small group of owners banded together and got DVC to back down. This will be just like that!"

I don't think so. In both of those prior cases, I don't think you could find a single DVC owner or observer anywhere that could rationalize those two changes in any sensible way. At least, I never saw such an argument. The lockoff premium was farcical. 1BRs are in lowest demand, so we will rebalance the charts so they are more expenive? That never made sense to anyone. The Base Year thing took a page or two of data to understand, but once you understood it, it was likewise just clearly wrong. In those cases, Disney would run a non-zero risk of being shown the door early in summary judgement.

This is different. In this case, there is a plausible argument to be made, and many on This Here Board have made it. Namely:

The converse argument is that the "new" language doesn't alter anything, but merely provides additional clarity to what was ambiguous language regarding the definition of a commercial enterprise re: renting.

I think that this argument is plausible enough that there is a good chance the whole case will play out.

 

[Brian Noble]

a small group of owners banded together and got DVC to back down

The other reason I don't think this is going to happen: That small group of owners, to have standing, will have to claim that they are harmed by the changes. In general, a garden variety owner will be helped by the changes--lower supply of rentals arguably means both more booking availability and higher rental rates for the rentals that are "allowed."

To claim one is harmed by this, I suspect that one would have to claim that they are doing those things without admitting that they are acting "commercially"--because if they admit the latter, they are admitting they are in violation of even the earliest vague language. That's going to be tricky, though not impossible. I don't see many garden-variety owners putting themselves in Disney's crosshairs on this out of the goodness of their hearts, and those who actually have a side hustle rental business are going to be keeping their heads as low as possible.

In fact, the smart money is going to be headed for the door sooner rather than later, because they can hear the music has stopped.

---------------
Edited to add: It's not really more booking availability, so much as it is better high value booking availability, where value is measured by how much you save over Disney's rental prices per point. Those high value rentals are the obvious and disproportionate targets of the more-than-casual renter.

 

[Bearval]

The other reason I don't think this is going to happen: That small group of owners, to have standing, will have to claim that they are harmed by the changes. In general, a garden variety owner will be helped by the changes--lower supply of rentals arguably means both more booking availability and higher rental rates for the rentals that are "allowed."

To claim one is harmed by this, I suspect that one would have to claim that they are doing those things without admitting that they are acting "commercially"--because if they admit the latter, they are admitting they are in violation of even the earliest vague language. That's going to be tricky, though not impossible. I don't see many garden-variety owners putting themselves in Disney's crosshairs on this out of the goodness of their hearts, and those who actually have a side hustle rental business are going to be keeping their heads as low as possible.

In fact, the smart money is going to be headed for the door sooner rather than later, because they can hear the music has stopped.

---------------
Edited to add: It's not really more booking availability, so much as it is better high value booking availability, where value is measured by how much you save over Disney's rental prices per point. Those high value rentals are the obvious and disproportionate targets of the more-than-casual renter.

I agree, your average DVC member who rents out unused points every so often isn't going to sue for damages, since it would cost far more in legal fees than it would be worth even if they win. It will be the commercial renters/sites that would be financially harmed and they would have an uphill battle trying to prove they were not in violation of the contract.

 

[crisi]

I agree, your average DVC member who rents out unused points every so often isn't going to sue for damages, since it would cost far more in legal fees than it would be worth even if they win. It will be the commercial renters/sites that would be financially harmed and they would have an uphill battle trying to prove they were not in violation of the contract.

I really suspect the average DVC member who rents out unused points every so often isn't going to have standing to sue for damages - since they'd have to show harm, and they only way that would happen is if Disney goes after the "I'm going to take a different vacation this year, so I'm going to rent my reasonable number of points for my family to a stranger" member. Which I continue to doubt will be the case ever, and if I'm wrong almost certainly won't be the case until Disney takes care of the thousands of points across multiple memberships, buy-strip-sell, I make a living off of this commercial renters. And part of me doubts Disney will take any action other than the expansion of contract language.