Third party commercial renters

[mistysue]

Yes, the "cure" is often worse than the disease, which is why we need to be careful what we wish for. There is no cure that won't negatively impact someone.

If a cure can negatively impact the companies buying massive loads of points exclusively for rental use with little to no effect on a typical user, I don't think most owners would be upset about that one. I get how that one guy would feel my response is very "it's not me so it's ok" - but the only business that was intended to be part of DVC use was Disney.

 

[mistysue]

<snip>

So, it comes back to the contract. If DVC says this is section is all that guides it, and that all that is happening is still considered a membership being used for personal use, then that is what the definition of personal use is in relation to our DVC ownership.
<snip>

Please tell me I'm not the only one bracing for "yes, this is my personal use... I am personally using my 8,000 points to operate a rental business" being considered reasonable. Capitalism can have the strangest ways of promoting manipulation like this.

 

[Sandisw]

To add, the one potential rule that seems to be unreasonable, to keep in the personal use column is allowing owners to set up their own websites to rent their own points.

 

[Sandisw]

Please tell me I'm not the only one bracing for "yes, this is my personal use... I am personally using my 8,000 points to operate a rental business" being considered reasonable. Capitalism can have the strangest ways of promoting manipulation like this.

I am saying that DVC could very well say that turning your ownership interests into a commercial enterprise is tempered by the cap of 8000. The contract pretty much says that…”to encourage personal use, we cap you as a person to 8000”

Not saying someone renting 8000 points can’t make a lot of money..they can, but in the scheme of things, maybe DVC believes that level of income is acceptable.

Now, do I think, given the explosion of the rental market by so many more owners, and how easy it is now to rent, that maybe thst 8000 threshold should be lower?

Sure..but I definitely wouldn’t want it lower than 6000 because I can see people wanting that many points for themselves, family and friends

In terms of the other piece, I will go on record that many owners out there do not want a system that penalizes them or makes the product worse just to stop brokers.

And that what many owners care about are the rules for themselves using their memberships being fair and reasonable. If those are fair and reasonable then the rest will fall in place.

So, is it fair and reasonable to be allowed to rent your points using whatever means you want? Is it fair and reasonable to be allowed to change the name on a reservation if you can’t use it or want to rent it without a cancel and rebook? I’d say yes…others may not.

See, I am focusing in on the personal use aspect of the contract and not the commercial use one because those are the rules that need to be fair and reasonable.

ETA: Run the numbers on how long it would take someone who buys 8000 points to begin to make a profit from renting, against buy in cost and dues, not to mention TVM.

 

[GoingSince1990]

I’m seeing a parallel to the DAS issue here, where instead of spelling out in detail exactly what does and does not qualify, Disney purposefully is keeping it a bit vague to avoid giving people a road map of how to get their way.

 

[Sandisw]

I’m seeing a parallel to the DAS issue here, where instead of spelling out in detail exactly what does and does not qualify, Disney purposefully is keeping it a bit vague to avoid giving people a road map of how to get their way.

I know why DVC might not want to be specific but since we are talking a contract and the potential violations of my rights to rent, it does need to be specific and clear.

It really is a shame about the DAS within, but I digress

 

[crvetter]

I am saying that DVC could very well say that turning your ownership interests into a commercial enterprise is tempered by the cap of 8000. The contract pretty much says that…”to encourage personal use, we cap you as a person to 8000”

Not saying someone renting 8000 points can’t make a lot of money..they can, but in the scheme of things, maybe DVC believes that level of income is acceptable.


Now, do I think, given the explosion of the rental market by so many more owners, and how easy it is now to rent, that maybe thst 8000 threshold should be lower?

Sure..but I definitely wouldn’t want it lower than 6000 because I can see people wanting that many points for themselves, family and friends

In terms of the other piece, I will go on record that many owners out there do not want a system that penalizes them or makes the product worse just to stop brokers.

And that what many owners care about are the rules for themselves using their memberships being fair and reasonable. If those are fair and reasonable then the rest will fall in place.

So, is it fair and reasonable to be allowed to rent your points using whatever means you want? Is it fair and reasonable to be allowed to change the name on a reservation if you can’t use it or want to rent it without a cancel and rebook? I’d say yes…others may not.

See, I am focusing in on the personal use aspect of the contract and not the commercial use one because those are the rules that need to be fair and reasonable.

ETA: Run the numbers on how long it would take someone who buys 8000 points to begin to make a profit from renting, against buy in cost and dues, not to mention TVM.

My suspicion in the way a few brokers are making profits renting is on their resale arm of the business. I believe they are buying loaded contracts and then transferring those points to another contract (DVC allows unlimited transfers between contracts with the same owners) then sell the stripped contract. Generally stripped contracts don’t have much of a value loss on the resale market.

I don’t think there are brokers holding ton of points but rather churning points this way. And if DVC stops the unlimited transfers between same owner contracts it would stop that quickly. That is of course if this is even an issue but looking at some brokers I bet it is happening.

 

[mistysue]

I am saying that DVC could very well say that turning your ownership interests into a commercial enterprise is tempered by the cap of 8000. The contract pretty much says that…”to encourage personal use, we cap you as a person to 8000”

Not saying someone renting 8000 points can’t make a lot of money..they can, but in the scheme of things, maybe DVC believes that level of income is acceptable.

Now, do I think, given the explosion of the rental market by so many more owners, and how easy it is now to rent, that maybe thst 8000 threshold should be lower?

Sure..but I definitely wouldn’t want it lower than 6000 because I can see people wanting that many points for themselves, family and friends

In terms of the other piece, I will go on record that many owners out there do not want a system that penalizes them or makes the product worse just to stop brokers.

And that what many owners care about are the rules for themselves using their memberships being fair and reasonable. If those are fair and reasonable then the rest will fall in place.

So, is it fair and reasonable to be allowed to rent your points using whatever means you want? Is it fair and reasonable to be allowed to change the name on a reservation if you can’t use it or want to rent it without a cancel and rebook? I’d say yes…others may not.

See, I am focusing in on the personal use aspect of the contract and not the commercial use one because those are the rules that need to be fair and reasonable.

I can agree with the bulk of what you are saying, with the little asterisk that I don't think measures to control a few bad operators would need to negatively impact a typical owner.
For the most part, I think it would be reasonable to lower the 8,000 number, and potentially have a waiver if someone can display this is just their life. There are people who exist whose "normal life" could include booking half the bungalows for extended family.

The rules do need to be fair and reasonable, which is exactly why in the long run it would be in DVC's best interest to not sit idly by watching a situation like this grow uncontrollably. I can't agree when people are suggesting fees or rebooking for every main guest change - I have in recent years booked rooms that I swapped to my daughter or either of my brothers, and would it would have been silly to say I can't let them stay there because that was part of what I bought into. I really don't see changing a name for family/friend use the same as changing a name for rental use - and I believe an occasional need to rent is not crazy or out of bounds. It's only the people whose primary use and purpose of owning DVC in the first place being to rent it where I see this as getting out of hand.

But with DVC's wordings, I would not be shocked to find out they've bent the rules because people "in the know" figured out what a cash cow they had. And I will forever insist that is wrong, whether or not it's contractually allowed, it is wrong.

ETA - I ran those numbers the first time it came up that we couldn't use a planned trip. Discussed it as a retirement strategy.

 

[Sandisw]

My suspicion in the way a few brokers are making profits renting is on their resale arm of the business. I believe they are buying loaded contracts and then transferring those points to another contract (DVC allows unlimited transfers between contracts with the same owners) then sell the stripped contract. Generally stripped contracts don’t have much of a value loss on the resale market.

I don’t think there are brokers holding ton of points but rather churning points this way. And if DVC stops the unlimited transfers between same owner contracts it would stop that quickly. That is of course if this is even an issue but looking at some brokers I bet it is happening.

That definitely is a practice that would seem DVC or DVD should be able to monitor and do something about without even touching the whole issue of personal use rules for the rest of us.

I have bought and sold a lot of contracts in my 15 years..6 or 8…but if you look at the history, it is easy to see that I had very few reservations in the names of others.

So, enforcement of this kind wouldn’t even impact someone like me who bought and sold for other reasons!

 

[crvetter]

That definitely is a practice that would seem DVC or DVD should be able to monitor and do something about without even touching the whole issue of personal use rules for the rest of us.

Totally agree and I suspect if it is happening they will 100% start doing something about it. The only issue is they run many LLCs that purchase but it isn’t hard to spot the trends and eventually the mouse will spot the trend too. Mickey always gets his money.

If you looked at the foreclosure sales on the County’s website some companies were doing it with the foreclosed contracts but now DVC is bidding on those contracts to very high prices where the economics of that business for them is useless.

 

[lowlight]

An indivuals own interpretation of what it means to be a commercial enterprise?

But that isn’t, so far as I know, how contracts work. If DVC says there will be a pool in the contract and they dig a one foot round hole in the ground and pour in chlorinated water and say “here’s your pool”, that’s false and misleading to a “reasonable person’s expectation”. They told me they don’t allow commercial business or activity. Because they don’t further define what that is, I can make a reasonable assumption. None of us are lawyers, I keep saying that because you are very much “it’s in the contract so it’s good”, but contract law exists for this very reason. People get sued over “ironclad” contracts every day and lose.

 

[lowlight]

My suspicion in the way a few brokers are making profits renting is on their resale arm of the business. I believe they are buying loaded contracts and then transferring those points to another contract (DVC allows unlimited transfers between contracts with the same owners) then sell the stripped contract. Generally stripped contracts don’t have much of a value loss on the resale market.

It’s almost a certainty it’s happening, but aren’t transfers limited to one per year for receiving and sending contract? So it’s probably not the only source unless they’ve found a way to reset the transfer limit by changing trust ownership or something.

Edit: I see what you are saying, they are keeping all the contracts in one name?

 

[lowlight]

ETA: Run the numbers on how long it would take someone who buys 8000 points to begin to make a profit from renting, against buy in cost and dues, not to mention TVM.

You say make a profit, it’s under 10 years. Not to mention the contract itself is paid off and has a tangible and non negligible value. 8000 paid off points is at the very least 850k to any resort, not to mention 200k income per year.

 

[GoingSince1990]

I know why DVC might not want to be specific but since we are talking a contract and the potential violations of my rights to rent, it does need to be specific and clear.

It really is a shame about the DAS within, but I digress

I know you are looking for a detailed, specific rule, but there are plenty of reasons for Disney to prefer to keep it vague. If they designate a number of rentals that owners are allowed to make, any “professional” renters would do that exact number of point rentals year in, year out, safe in the knowledge that they would never be questioned. While a member who has owned points since 2010 to take his extended family on a GV trip every year, never renting out points, might be unable to travel one year due to health reasons and rent his points out instead, accidentally exceed the limit, and be flagged as “commercial”, even though someone like this should clearly be cut some slack. You can tell Disney that they “need to be specific” all you like, but I suspect that they prefer to use a “we know it when we see it” approach.

 

[ChipTheRescueRanger]

Iv read some of this thread and some people have some interesting ideas on restrictions that ultimately will only make DVC resale price drop.

But my main question is. Does Disney even care about commercial renters. Disney wants full hotels and busy parks. Do they care if this Is done via DVC rentals. They have still sold the contract and collected the dues. Plus id wager that DVC renters have a higher unpack spend than owners.

 

[lowlight]

that ultimately will only make DVC resale price drop.

I don’t think so if we adopt sensible rules that aren’t ham-fisted. If anything, the commercial rental market has kept the dollar per point rental market artificially low. It’s a malignant growth on the product, it needs to be excised.

 

[crvetter]

Iv read some of this thread and some people have some interesting ideas on restrictions that ultimately will only make DVC resale price drop.

But my main question is. Does Disney even care about commercial renters. Disney wants full hotels and busy parks. Do they care if this Is done via DVC rentals. They have still sold the contract and collected the dues. Plus id wager that DVC renters have a higher unpack spend than owners.

The cynic in me says they do to a degree care. If renting becomes less attractive people will just gift their unused points (or they go to breakage). In the case they are gifted it could be assumed those people have more disposable money to spend at Disney (going to Disney not a DVC owner). Or if they go to breakage Disney gets the cash on the rental after 2.5% of the budget is returned to owners, which almost all DVC hotels hit, so Disney is and would make more money this way.

 

[Sandisw]

But that isn’t, so far as I know, how contracts work. If DVC says there will be a pool in the contract and they dig a one foot round hole in the ground and pour in chlorinated water and say “here’s your pool”, that’s false and misleading to a “reasonable person’s expectation”. They told me they don’t allow commercial business or activity. Because they don’t further define what that is, I can make a reasonable assumption. None of us are lawyers, I keep saying that because you are very much “it’s in the contract so it’s good”, but contract law exists for this very reason. People get sued over “ironclad” contracts every day and lose.

Oh I know people get sued and lose. And yes, I do use the contract because that is at least where it starts.

When you fight a contract, you at least have to be able to tie it to how it’s being violated

Isn’t that the hard part of interpretation?

If your interpretation into what makes someone using a membership for personal use is not the same as mine, then you have to go back to the contract to tease it out to find which pieces can be used as support that it is or is not.

Saying well, this is evidence that people are violating their contracts and using DVC ownership as a commercial enterprise, you have to be able to point to what actions make it that in relation to the contract.

That is why I come back to the intent and main language in the contract because that tells me what my rights are and not what they are not.

So, when someone says we shouldn’t be allowed to use a broker to rent, I say that the clause that says we don’t need DVD or DVC approval disputes that. Now, I could be wrong but at least I have something from my contract to tie my interpretation to in the contract.

Take spec renting…some want it stopped and think that act is not reasonable under the a personal use definition.

I disagree because my opinion of what it takes to shift from personal use to commercial enterprise is a much higher standard then others. And, we both agree that the ultimate one to determine that is DVC.

The other thing to wonder about, when you mention misleading is whether the marketing pushes what the purpose is and not what it is not.

If they say the main purpose is personal use and enjoyment, spend a lot of time discussing that and warning not to buy as an investment, then wouldn’t the logical jump be that the definition of personal use is what is being marketed?

I can see the other side of the coin, though, to your point, that DVCs potential broad definition of personal use, and lax definition of commercial enterprise isn’t what was promised.

But, one would sitll need to tie back to something in the contract that the product in practice is not what was promised.

And, to do that, you would be fighting them about what others are doing and not everyone is going to agree that certain actions should not be under the rules of personal use.

Now, I definitely think owners running a business to rent their own points seems reasonable to be prohibited. But not that rental brokers should be stopped in helping owners rent their points.

As I said, I really think most of what DVC is allowing to happen in the rental market is reasonable to balance rights of owners to rent.

However, I’m still taking the time to get clarification about it.

 

[Sandisw]

You say make a profit, it’s under 10 years. Not to mention the contract itself is paid off and has a tangible and non negligible value. 8000 paid off points is at the very least 850k to any resort, not to mention 200k income per year.

Resale value is not guaranteed and so it’s a gamble.

The point I was trying to make. If DVC has kept that 8000 threshold as a way to encourage personal use, then they, in some way, are implying that level ownership can exist in the world of personal use, especially if those points are jointly owned, in many memberships, etc.

We all bought with that threshold so if one was concerned if that meant that an owner could rent all 8000 and not get penalized, it could have been asked. And it still can be asked for anyone who wants to know.

My points will always go back to DVC definitions and guidelines because that is where enforcement comes from.

DVC can’t be accused of not enforcing commercial enterprise use if you don’t have a clear definition of it from DVC.

Saying this broker having all these rentals, is proof, especially since no one knows how many owners are involved is only proof if you have from DVC that advertising on their website or Redweek is not allowed.

 

[lowlight]

Resale value is not guaranteed and so it’s a gamble.

Real estate is one of the riskiest and therefore most lucrative investments in the financial world, if you know what you’re doing. Show me a time where being a DVC owner meant losing your initial investment. It may and likely will happen, but it hasn’t and people have made bank doing it.