Would you join a lawsuit to revert DVC's resale restrictions?

[Sandisw]

And to some extent, that strategy has been working. FOMO can be a powerful incentive. There are several reports here on the DIS of people buying the minimum number direct points just to qualify for Membership Extras. Most of them would have bought entirely resale if it didn't matter for getting the ME perks and discounts.

If you remember, back in 2016, when it first happened, so many reports of people adding on just the 25 points that made them eligible! Now, with 150 point minimum, it may be a harder choice, but still, there can be benefits. For me, the larger drawback is the restricted use of resale points than it is the discounts...though, I can't complain about those! LOL

 

[kristenrice]

I would love to believe that but their is no financial way that one years of sales pays for the last 30 years of direct members yearly benefits. It’s an impossibility. Their are too many members.

...which is probably why the benefits have been decreasing year after year...

 

[808blessing]

Another salient issue is why is the ever-changing arbitrary number (150 currently) the bar for "eligible"? I am a direct member. But just "not enough". Resales vs direct is one thing. What do you all think about direct vs direct?

It's not even that i live in a "different neighborhood" and treated differently. I am on the same block. My square footage is just smaller. Sorry, no home mail service for me! I just have to drive to the post office like "the others".

 

[Chuck S]

Minimum buy-ins have been a part of DVC since the beginning. The original buy in was 230 points for a contract, once you purchased that, then you could add on smaller numbers. It is what it is. Perks aren't guaranteed, and can be adjusted at anytime. You didn't "purchase" the perks, you purchased a real estate interest, that is all anyone is legally guaranteed. If anything, they could have avoided confusion by NOT grandfathering in smaller contracts for perks.

 

[Brian Noble]

From my understanding, that the discounts for merchandise and food are agreements with those vendor to offer the discount…it doesn’t cost anything.

Same with the AP…it’s a deal with DPEP to include DVC owners in the same program for certain tickets offered to FL residents…again, not costing anything to DVD.

It would not surprise me to learn that there is an internal transfer between DVD and those other divisions to offset some of these. There may be no direct costs, but that doesn't mean there aren't "costs."

That's also true of the offering unit--they are forgoing revenue, and that matters. Some of these are upsells that pay for themselves (the restaurant discounts probably are, as they tend to apply to less popular places and times) but some of them are probably not.

 

[AliceIn]

I personally believe DVC knows that they are treading on potential legal issues with their RIV resale restrictions. Unless a law suit it brought against them or at least a cease and desist letter being issued DVC wins.

I do not think DVC wants a long drawn out law suit. They do not want bad PR and Dinsey does not want this in the local/national news, blogs, forums. This would be settled out of court in a heart beat to prevent loss DVC sales. The most likely outcome would be to take away the restrictions.

Big companies aren't afraid of long lawsuits, because they have their own in house attorneys. Long lawsuits hurt the little guy WAY more than a giant corporation. I don't think the lawsuit would take away the restrictions, because of the fact that people would not be able to prove financial harm. If you bought before 2019 - you got all resorts available to you, and you still have that. People who bought resale after 2019 knew that they would have restrictions.

 

[eileenkeeney]

I just came across this thread when I searched google looking to see if anyone had sued Disney based on restrictions on resale contracts. I actually wonder if DVC has settled any out of court and in secret. I notice that they added conditions to new contracts indicating that on resale it would not have the same benefits. So why did they feel they needed to add this? Is there an issue with this practice? Even if stated upfront I see a potential anti-trust issue. Disney can magically add additional benefits, raising the value of the contract, after exercising ROFR? How is that fair competition?

I can't join a lawsuit until I sell my contract. The real victims here are not those who bought the contracts, as they were aware of the restrictions, it is those who sold the contracts with the decreased benefits. I would be willing to join a lawsuit after (if) I sell my contract. Although I did buy resale, I bought early enough that the contract was grandfathered in as direct.

The restrictions on resale contracts are one reason I decided not to sell my contract the few times I considered doing so. Another is that I don't want to be forced to sign away the additional 15 years that Disney added to the OKW contracts which they are requiring when these contracts are sold. Why are they requiring people to sign anything related to this? Did they accidently do something that causes these contracts to not actually expire in 2042? I sort of want to try to make a reservation that goes past the date the contract is supposed to expire, but I am not sure I will live that long, or be healthy enough to travel if I am still alive (I will be 84).

 

[eileenkeeney]

Big companies aren't afraid of long lawsuits, because they have their own in house attorneys. Long lawsuits hurt the little guy WAY more than a giant corporation. I don't think the lawsuit would take away the restrictions, because of the fact that people would not be able to prove financial harm. If you bought before 2019 - you got all resorts available to you, and you still have that. People who bought resale after 2019 knew that they would have restrictions.

It is not the purchaser of the resale contract that is the victim, it is the seller. The purchaser knew of the restrictions. The resale value was impacted by the restrictions.

 

[_auroraborealis_]

I actually wonder if DVC has settled any out of court and in secret.

Pretty close to impossible to do as a public company, as such settlements would have to at least be partially disclosed. Cannot do it entirely in secret.

Why are they requiring people to sign anything related to this? Did they accidently do something that causes these contracts to not actually expire in 2042?

There's some debate on that, yes.

 

[eileenkeeney]

Pretty close to impossible to do as a public company, as such settlements would have to at least be partially disclosed. Cannot do it entirely in secret.


There's some debate on that, yes.

They may have but they will still control things and even if legally extended DVC can prevent the reservation from being made forcing the owner to sue to be able to make it. I will be so old by then, I am not sure if my brain will work well enough to bring such a law suit. I know if I sell they can hold up the resale until I either sue or sign the papers.

 

[CraigInPA]

It's clear that the executives of DVD, DVC, DVCMC, and BVTC all use their "separate" companies to the benefit of the Disney enterprise as a whole. In this way, BVTC accepted Riviera with substantially different rules for trading into Riviera based upon where the points the member is attempting to use came from and when (the post 2019 resale points restriction) and substantially different rules for trading to other resorts based upon where and when the points the member is attempting to use came from (resale Riv points can't be used outside of Riv, but direct points can). This, IMO, is the most compelling argument.

If a judge agreed that BVTC violated their own operating agreement, the judge could force Riv out of BVTC, or it could force Riv to change all of its agreements to that substantively similar to the original 14, which do not have these kinds of restrictions.

What I find more interesting, however, would be determining in discovery for this part of the suit how it was that BVTC, which is supposed to be arms length to DVD (since it contracts with DVCMC, not DVD) came to accept those restrictions? Which executives were involved? What does the paper trail say? I suspect we'll find that someone in BVTC raised the argument we're raising about dissimilar agreements, and was forced to go along with it because all of these entities are effectively part of one larger entity, and not independent enough to be allowed to disagree.

 

[Chuck S]

It's doubtful any legal action would accomplish anything as far as BVTC and Riviera. Perks for direct vs resale purchasers is pretty much industry standard. and trading can not be guaranteed, as the membership at each resort can legally (by vote) withdraw their home resort from the DVC system entirely.

 

[reddog21]

It's doubtful any legal action would accomplish anything as far as BVTC and Riviera. Perks for direct vs resale purchasers is pretty much industry standard. and trading can not be guaranteed, as the membership at each resort can legally (by vote) withdraw their home resort from the DVC system entirely.

It would accomplish a whole lot for the lawyers who get paid.

 

[CarolynFH]

the executives of DVD, DVC, DVCMC, and BVTC all use their "separate" companies to the benefit of the Disney enterprise as a whole.

I could be wrong, but I'm pretty sure the executives are all the same people.

What I find more interesting, however, would be determining in discovery for this part of the suit how it was that BVTC, which is supposed to be arms length to DVD (since it contracts with DVCMC, not DVD) came to accept those restrictions? Which executives were involved?

Yes, interesting question, given that the same executives probably wear all the hats!

 

[Sandisw]

It's clear that the executives of DVD, DVC, DVCMC, and BVTC all use their "separate" companies to the benefit of the Disney enterprise as a whole. In this way, BVTC accepted Riviera with substantially different rules for trading into Riviera based upon where the points the member is attempting to use came from and when (the post 2019 resale points restriction) and substantially different rules for trading to other resorts based upon where and when the points the member is attempting to use came from (resale Riv points can't be used outside of Riv, but direct points can). This, IMO, is the most compelling argument.

If a judge agreed that BVTC violated their own operating agreement, the judge could force Riv out of BVTC, or it could force Riv to change all of its agreements to that substantively similar to the original 14, which do not have these kinds of restrictions.

What I find more interesting, however, would be determining in discovery for this part of the suit how it was that BVTC, which is supposed to be arms length to DVD (since it contracts with DVCMC, not DVD) came to accept those restrictions? Which executives were involved? What does the paper trail say? I suspect we'll find that someone in BVTC raised the argument we're raising about dissimilar agreements, and was forced to go along with it because all of these entities are effectively part of one larger entity, and not independent enough to be allowed to disagree.

I think that because they grandfathered all the owners who owned when the language was different for new DVC resorts to enter..old DVc resort agreements said something of “substantially similar”, and then updated things moving forward without that, it was what they used to “support” the move worked.

No idea what a court would say regarding that but everyone who has bought since 2019 have bought with understanding it, and those who bought before have the same trading rules for all the resorts that excited when they bought.

My guess would be that since VDH and CFW were both given them, the divisions must believe they would withstand a challenge.

 

[DL1WDW2]

This is very confusing since the issue of a Trust / Value / Investment joined into the DVC language without completed legalities .
I’m waiting for the annual condo meeting for more explanations.
Is this true ? DVC will have complete control over Resales since we will not have a deeded property to sell ?
We will just have a value / investment in the DVC controlled Trust?

 

[Sandisw]

This is very confusing since the issue of a Trust / Value / Investment joined into the DVC language without completed legalities .
I’m waiting for the annual condo meeting for more explanations.
Is this true ? DVC will have complete control over Resales since we will not have a deeded property to sell ?
We will just have a value / investment in the DVC controlled Trust?

The current Resort Use Plan for CFW includes the cabins only right now. Those cabins remain owned by DVD and what one is buying is a RTU the cabins, or any other future property activated in that vacation plan…

DVD can add and active property into multiple RTU plans within the trust. So, what you would be selling with a CFW contract is simply the number of points you bought. You do not get a deeded ownership interest to a specific unit like all previous resorts.

 

[CarolynFH]

We will just have a value / investment in the DVC controlled Trust?

That's ONLY if you buy CFW or any future resort that's part of the trust.

Your current ownership, and any add-ons to resorts that are not part of the trust, will not be affected by the trust.

 

[CraigInPA]

My guess would be that since VDH and CFW were both given them, the divisions must believe they would withstand a challenge.

A decision probably made by the same people who thought that they could change the lock off ratio to benefit Disney, which was retracted once knowledgeable people on this board got involved.

 

[DougEMG]

As a resale RIV owner I'm curious to know if Disney is required to block off the points that resale owners at RIV own in order to ensure they don't ever get those points/rooms used by people trading into RIV. So if points can't trade out, then that should also block an equivalent amount from trading in.

For example, if 40% of points are owned by resale owners, is only 60% of the resort allowed to be used by people trading into the resort and direct owners?

If they didn't do something like that, the possibility exists that a resale owner would never be able to use their points, this is impossible with any other type of owner.

So has Disney put controls in place to ensure this doesn't happen, or are they just "hoping" it never happens based on past trading patterns in the other resorts.