New Definition of Rental Activity?

[Hubalorian]

The new restrictions are in the CFW declarations and DVC Membership Agreement and DVC Resort Agreement. As to be enforceable against pre-CFW DVC members, there are serious doubts they can be applied to such members. The new restrictions created are not in the prior POS's, and could require an amendment to the prior declarations that would require the actual vote of the members.

Under the prior declarations, the restriction was limited to a commercial purpose, which could be found if there were a pattern of rental activity that the association, in its reasonable discretion, could conclude constitutes a commercial enterprise or practice. Commercial enterprise is a legal term that means being in the business of doing something.

DVD could argue that the new listed restrictions simply conform with the prior restriction, but there is a major problem with the new terms. Under the prior POS's, any decision made by the association (or possibly DVCM) had to be "reasonable," i.e., the members could challenge whether the decision was correct.

The new terms take away all of the member's rights to challenge a decision by declaring the association (or DVCM) "shall be the sole determiner of any use or activity that does not constitute personal use or constitutes commercial use." Declarations §12.1.3. Thus, for example, the association or DVCM could find, under the new terms, that making three reservations in a year for persons other than family members is a violation, and the member could not challenge it, even with evidence that the reservations were made for friends of the member who paid no rent to the member.

Such absolute power clauses in contracts are not favored by courts, and a court could easily find that the new rules make a material change to rights of pre-CFW members, which change can only be made via an actual vote of the members.

If this is accurate (not saying it isn’t, I just don’t know), I will be floored that Poly2 joins Poly1 in the traditional way. I just can’t comprehend why they would place such restrictive renting practices for the cabins and not the brand new poly tower. Just my 2 cents

 

[JackosinDIS]

Agree with @drusba on this, BUT the POS for the current resorts also contains the following wording:

“From time to time……. The Board may adopt policies to provide what constitutes a commercial enterprise”

So while they would have to act reasonably in determining whether there had been use for a ‘commercial purpose’, this wording would leave the door open for DVC to introduce new policies on what constitutes a commercial purpose - they are more likely to be viewed as acting reasonably in making any decision if they are complying with written policies… and as far as I can see there is nothing to stop them making any new policy they like (reasonable or otherwise!)

 

[SpicyMcHaggis]

I didn’t even think of this but you make a great point. DVC rentals are taking from both sides, maybe even more from hotel/cash side because the points are already paid for so they already got there money there but these rentals are actively taking away someone who would normally have no choice but to book directly with Disney with cash but instead choose the cheaper (if riskier) rental site.

I wonder if there’s a world where they create their own rental system. I’m not sure there’s much of a benefit to offer both full priced cash rooms and also discounted DVC rentals but maybe they could create a system where they set the base renting fees for renters ($16-$24/pt) depending on the resort and then turnaround and “sell” those rooms as normal cash bookings, so it increases their inventory of full-priced available rooms. Not sure this makes any sense to anyone or if it even makes any sense for disney to do such a thing. But they’d have the monopoly of the renters market at that point to do (or not do!) as they wish

Renting definitely takes away from direct hotel sales - I'm in that boat, as someone who is not an owner currently but has stayed on property via point rental.

On the other hand, the price for deluxe hotel reservations would have lead me to either stay only in value accommodations, or stay off-property entirely. Instead, because of that experience I'm now a potential DVC purchaser since we have enjoyed what we've seen. It cuts both ways, but no idea which side is more impactful.

 

[crisi]

The new restrictions are in the CFW declarations and DVC Membership Agreement and DVC Resort Agreement. As to be enforceable against pre-CFW DVC members, there are serious doubts they can be applied to such members. The new restrictions created are not in the prior POS's, and could require an amendment to the prior declarations that would require the actual vote of the members.

Under the prior declarations, the restriction was limited to a commercial purpose, which could be found if there were a pattern of rental activity that the association, in its reasonable discretion, could conclude constitutes a commercial enterprise or practice. Commercial enterprise is a legal term that means being in the business of doing something.

DVD could argue that the new listed restrictions simply conform with the prior restriction, but there is a major problem with the new terms. Under the prior POS's, any decision made by the association (or possibly DVCM) had to be "reasonable," i.e., the members could challenge whether the decision was correct.

The new terms take away all of the member's rights to challenge a decision by declaring the association (or DVCM) "shall be the sole determiner of any use or activity that does not constitute personal use or constitutes commercial use." Declarations §12.1.3. Thus, for example, the association or DVCM could find, under the new terms, that making three reservations in a year for persons other than family members is a violation, and the member could not challenge it, even with evidence that the reservations were made for friends of the member who paid no rent to the member.

Such absolute power clauses in contracts are not favored by courts, and a court could easily find that the new rules make a material change to rights of pre-CFW members, which change can only be made via an actual vote of the members.

They could amend the previous statements at older resorts and simply take out the "sole discretion" part and throw in something about arbitration. Then the courts would stop having an issue with it.

And I also think that if they put this to a vote to the members, and marketed it as "corporations are reducing your chances of booking the room you want and then renting it out for profit - that wasn't why we created DVC, we created DVC so your family could create memories together" (and Disney can craft that message a lot better with time than I can in 45 seconds), the vote would slide through.

 

[crisi]

Renting definitely takes away from direct hotel sales - I'm in that boat, as someone who is not an owner currently but has stayed on property via point rental.

On the other hand, the price for deluxe hotel reservations would have lead me to either stay only in value accommodations, or stay off-property entirely. Instead, because of that experience I'm now a potential DVC purchaser since we have enjoyed what we've seen. It cuts both ways, but no idea which side is more impactful.

Disney hopes that having paid $600 a night for your BCV room you stop by the DVC kiosks and by into their sales pitch. That way they get it both ways. Or having paid for your value room, you stop by their kiosk to discover how "affordable" staying "Deluxe" really is when you own DVC - and then they get it both ways. Or having stayed off site, you stop by their kiosk to discover how affordable on site can be - if you own DVC.

And if they need help selling people into DVC, the old way to do that was to "upgrade" cash guests to available DVC units - which they could do based off of units that went to CRO for trades that hadn't been rented, and then cross referencing guests arriving with those guests' patterns of visiting, amount spent per visit, and estimates of household income (which are pretty easy to get off of public information like your address).

Disney was not having big problems selling their product before the rental market expanded and "helped" them do so.

 

[dez1978]

I didn't see this asked, but I just skiimed the comments. The part about points being used by owners or owners families.. How do they know who is my family or not? What constitutes the owners family? Does that just mean me and my immediate family? My in-laws? Cousins? How would they know if John Doe is my brother in law or not? How would they enforce that short of saying that someone whose name is on the contract must be registered as a guest on every reservation? My hypothetical daughter could get married and no longer share our last name. Would that mean I could not make a reservation for her and her husband? Would they require documentation upon check in to prove she is family? I just don't see how they could possibly enforce private rentals. Sure they could crack down on the rental companies, but I'd think it would be hard otherwise.

 

[Sandisw]

I didn't see this asked, but I just skiimed the comments. The part about points being used by owners or owners families.. How do they know who is my family or not? What constitutes the owners family? Does that just mean me and my immediate family? My in-laws? Cousins? How would they know if John Doe is my brother in law or not? How would they enforce that short of saying that someone whose name is on the contract must be registered as a guest on every reservation? My hypothetical daughter could get married and no longer share our last name. Would that mean I could not make a reservation for her and her husband? Would they require documentation upon check in to prove she is family? I just don't see how they could possibly enforce private rentals. Sure they could crack down on the rental companies, but I'd think it would be hard otherwise.

The key is that they don’t need to define it but rather look to see how many reservations one has booked in the names of other on a regular basis.

Then, they have a conversation about it. There are too many owners that IMO, the
Is is meant to shift gears to curb the exploding of brokers who may now be renting lots of points and have set it up to stay within the more 20 reservations in a 12 month period in others names.

If someone is renting a lot, there won’t be too many repeat names, but those that do so with family, could.

As I said, I don’t see them going full on with indivuals vs those companies or very high point owners who are evidently renting for prodit

 

[Cyberc1978]

I didn't see this asked, but I just skiimed the comments. The part about points being used by owners or owners families.. How do they know who is my family or not? What constitutes the owners family? Does that just mean me and my immediate family? My in-laws? Cousins? How would they know if John Doe is my brother in law or not? How would they enforce that short of saying that someone whose name is on the contract must be registered as a guest on every reservation? My hypothetical daughter could get married and no longer share our last name. Would that mean I could not make a reservation for her and her husband? Would they require documentation upon check in to prove she is family? I just don't see how they could possibly enforce private rentals. Sure they could crack down on the rental companies, but I'd think it would be hard otherwise.

They can only check if you are on the reservation or not.

Someone else could be a renter, a cousin, a sister and the list goes on.

Heck one could claim that all your reservations are for friends and family. How Disney would check it I honestly don’t know.

Problem then begins if they see that you are advertising on a rental site… difficult to claim your guests are family.

 

[Hubalorian]

I didn't see this asked, but I just skiimed the comments. The part about points being used by owners or owners families.. How do they know who is my family or not? What constitutes the owners family? Does that just mean me and my immediate family? My in-laws? Cousins? How would they know if John Doe is my brother in law or not? How would they enforce that short of saying that someone whose name is on the contract must be registered as a guest on every reservation? My hypothetical daughter could get married and no longer share our last name. Would that mean I could not make a reservation for her and her husband? Would they require documentation upon check in to prove she is family? I just don't see how they could possibly enforce private rentals. Sure they could crack down on the rental companies, but I'd think it would be hard otherwise.

I don’t think they would bat an eye if this happens occasionally. However if your points record looks like

John Smith
Hannah Reid
James Blue
Brittany Green
Jack Black… you get the point?

All different names from different parts of the US, it would look suspicious. Especially if you’re the owner and haven’t used it in the last 5 years. I don’t think they will go after occasional renters or those that book occasionally for others.

 

[mort1331]

My wife is Greek...Everyone is Family

 

[DonMacGregor]

My wife is Greek...Everyone is Family

I'd probably be more concerned with the other 200+ words in that paragraph, rather than the single use of the term "family"...

 

[UrsulaWantsYourSoul]

For Worldmark (another timeshare) if the owner is not the lead guest, you have to use a guest pass for the reservation and you only get so many per year. I think if you go beyond that you have to pay a fee per guest pass. So the system knows very well how many reservations that aren’t the owner / how many remain. I usually book it in my parents (owners) name and switch out when it’s close to the date and I know for sure I’m going because if you cancel, you don’t get the guest pass back. And yes when I change from owner to my name it requires the use of the guest pass / deducted from the yearly amount.

 

[Disfamwa]

I think some people aren’t aware of how big commercial spec renting of confirmed reservations has become. Take a look at the confirmed rentals at https://rentals.*******.com/confirmed-reservations/ for the low point period of October through mid December. You’ll see tons of boardwalk standard views, animal kingdom value studios, bay lake standard view studios, and riviera tower studios. These are some of the hardest to book rooms. If you are wondering why they are so hard to book, this behavior definitely makes it harder for actual owners to book (these companies must have a process in place to help them get these reservations—could be as simple as extremely fast internet and practice or it could be they’ve created a bot).

 

[JackosinDIS]

It’s a tricky one. For example, right now I have a lot of rentals due to the fact that I purchased 6 loaded resale contracts and couldn’t use the already banked points prior to my next big trip.

It’s not ‘commercial’… I have no intention of running a business, although have made a (small) profit on the points.

Some of the renters are friends / work colleagues and some are total strangers that I picked up from rental boards.

it does make you wonder how far they will go with trying to crack down on it… people like me would certainly be easy pickings!

 

[DonMacGregor]

I think some people aren’t aware of how big commercial spec renting of confirmed reservations has become. Take a look at the confirmed rentals at https://rentals.*******.com/confirmed-reservations/ for the low point period of October through mid December. You’ll see tons of boardwalk standard views, animal kingdom value studios, bay lake standard view studios, and riviera tower studios. These are some of the hardest to book rooms. If you are wondering why they are so hard to book, this behavior definitely makes it harder for actual owners to book (these companies must have a process in place to help them get these reservations—could be as simple as extremely fast internet and practice or it could be they’ve created a bot).

But, but, everyone has a right to use their points as they see fit, and the points are going to be used by someone!!!

It doesn't matter that the points are owned by a company with several LLC's, allowing them to own numerous contracts and thousands of points and either employ several people to grab and/or walk reservations, or use a script to scrape reservations on the DVC site faster than humans can. Don't be a sore loser...

 

[tom1944]

It’s a tricky one. For example, right now I have a lot of rentals due to the fact that I purchased 6 loaded resale contracts and couldn’t use the already banked points prior to my next big trip.

It’s not ‘commercial’… I have no intention of running a business, although have made a (small) profit on the points.

Some of the renters are friends / work colleagues and some are total strangers that I picked up from rental boards.

it does make you wonder how far they will go with trying to crack down on it… people like me would certainly be easy pickings!

Do you have 20 rentals?

 

[DonMacGregor]

It’s a tricky one. For example, right now I have a lot of rentals due to the fact that I purchased 6 loaded resale contracts and couldn’t use the already banked points prior to my next big trip.

It’s not ‘commercial’… I have no intention of running a business, although have made a (small) profit on the points.

Some of the renters are friends / work colleagues and some are total strangers that I picked up from rental boards.

it does make you wonder how far they will go with trying to crack down on it… people like me would certainly be easy pickings!

Probably safe, unless buying 6 loaded contracts and being unable to use all of the points is an annual occurrence for you...

 

[JackosinDIS]

Do you have 20 rentals?

No… just under.

 

[JackosinDIS]

Probably safe, unless buying 6 loaded contracts and being unable to use all of the points is an annual occurrence for you...

I wish it was an annual occurrence!

 

[Genie+]

During our first direct purchase last year, our guide read out 5 things he was required to tell us. One was how commercial renting is prohibited and explained DVC is for personal use only.

Natural personal use is much different to the system than commercial where the main objective is profit. Pulls the cream and gains advantages. Having a huge bank of points makes it easier to walk, switch points out to gain home priority again, use holding points, etc.

I’d think one way for DVC to screen is seeing the ratio of unrepeated names. Doesn’t automatically mean an owner is renting as a business, but they'd need to explain when 80% of their points are not themselves or repeat names. It’s going to be pretty rare that an owner uses only a fraction themselves and is making reservations for a different group of family or friends every time without repeating names. That points to being a business and should be pretty easy to explain if otherwise. What ratio of use potentially crosses the line for further inspection?