What is “clear” from all of the above posts is none of us is certain about what is actually going to happen with Poly 2. It may become part of Poly 1, in the same way as VGF 2 became part of VGF 1 – mainly by just adding units from the new VGF to the VGF 1 POS and creating new
point charts -- and it is possible that the cabin trust concept is something that will apply only to the cabins and not to any other future resorts. It is also possible that Poly will be the second resort with a trust plan, and CFW cabins not included in the first trust plan may be added to that trust plan, and potentially even undeclared units in resorts like Riviera and VDH that still have undeclared units. The part of the CFW trust plan that leads to much of the speculation is that DVD has retained the right to create future trust plans that can include CFW cabins, units from other resorts, or entire other resorts, and thus have trust plans that allow beneficiary purchasers to reserve multiple resorts at 11-months out. It was not required to include such terms in the CFW POS documents if its intent was to limit the trust plan type of timeshare ownership to CFW. But even that fact can be viewed two ways – it intends to add more resorts to the trust plan or DVD does not intend to do that now but just added the terms on the assumption that maybe later it may change its mind.
What I cover here are some other issues that may be of concern. I previously mentioned the changes DVD made to CFW DVC Membership Agreement that allows it to do point reallocations among room categories, e.g., lowering nightly points needed for 2BRs while raising them year round for studios, while under prior documents it was limited to reallocating among the same-sized rooms among seasons, i.e., DVCM could now lower studios in one season while raising studios in another season. I also mentioned the new rental rules created which give DVCM the exclusive right to make a final determination that any number of repeated reservations for non-family, use of rental agencies, advertising for rentals, or offers to rent already confirmed reservations, are a violation of the commercial purpose exception to members’ right to rent.
Another document with significant changes is the DVC Resort Agreement. That is the document that recognizes a new “DVC Resort,” meaning a resort at which members can reserve rooms through the DVC Reservation Component, which is the reservation system controlled by BVTC, and through which members can reserve at 7-months out at DVC Resorts they do not own. BVTC is deemed a fiduciary of the members and thus must act in their best interests, regardless of whether DVD wants it to do otherwise.
One key term that exists in all DVC Resort Agreements applicable to DVC Resorts created before Riviera is the following: “If BVTC associates one or more additional resorts as DVC Resorts, the DVC Resort Agreement executed to effect such association shall be substantially similar to this Agreement in all material respects under the circumstances pertaining to each such additional DVC Resort.”
That clause became a major issue of concern when DVD created Riviera. The pre-Riviera DVC Resort Agreements applied to all Club Members, both purchasers from DVD and resale purchasers, thus allowing all resale purchasers to use the DVC Reservation Component and reserve non-owned resorts at 7-months out. The Riviera DVC Resort Agreement does not have the above clause and adds the resale purchaser restrictions, prohibiting any resale purchaser of Riviera, and any other DVC resort resale purchasers as to resales done on or after January 19, 2019, when Riviera officially became a DVC Resort, to reserve Riviera. Those resale provisions should have prevented BVTC from even making Riviera a DVC Resort, i.e., BVTC should, as a fiduciary of the members, under the terms of the prior DVC Resort Agreements, have refused to make Riviera a DVC Resort, leaving it unassociated with any prior resorts, unless Riviera did not have those resale restrictions.
But DVD cleverly avoided any lawsuit by declaring that every DVC resale owner that existed before Jan 19, 2019, was unaffected by the new rule, and then DVD could claim, if challenged later, that every member who purchased a resale contract after January 2019 could not claim injury because they knew, before purchasing, of the resale restrictions, and purchased anyway, thus potentially waiving any claim that the restriction was improperly added.
The CFW DVC Resort Agreement has the same resale restrictions as Riviera, which could possibly lead to a challenge. Moreover, there are other key changes in the CFW Resort Agreement that could be the basis of asserting the CFW Agreement is not the same in all material respects as any pre-Riviera Resort Agreement:
Commercial Purpose. The CFW Resort Agreement adopts the same new rental restrictions that appear in the Membership Agreement, as applicable to members reserving through BVTC, with the only real difference being that the party making the decision that the commercial purpose clause has been violated is BVTC. Not only is that clause absent from any previous DVC Resort Agreements, but the declarations for the prior resorts grant the power to determine whether the commercial purpose clause has been violated to the resort's Association, see e.g., BWV Declarations §12.1, not BVTC, and nowhere in the prior POS's is there a clause under which the Association transfers its power to make such a determination to BVTC, i.e., BVTC has always lacked any power to determine that the commercial purpose clause has been violated.
Definition of Club Member. Under DVC Resort Agreements, it is the “Club Member” who has the right to do anything under the agreement, such as make reservations at non-owned resorts. A Club Member is defined under CFW and prior Resorts Agreements as "the owner of record of an Ownership interest." However, the pre-CFW agreements define Ownership Interest as “a property interest in unit in a DVC Resort.” CFW trust owners will have only in interest in the trust and it is the trust that will own the units (the cabins). The CFW agreement defines Ownership Interest to mean “a timeshare estate in a DVC Resort, which is a real property interest pursuant to Section 721.05(34), Florida Statutes.” §1.20. As I have noted before, Florida recognizes a trust interest to be a real property interest that can be transferred via deed, but is not a “property interest in a unit of a DVC Resort,” which is what current DVC owners have, an actual legal interest in a unit at a DVC Resort.
Point Reallocations. BVTC has always retained the power to create point charts applicable to DVC Resorts at 7-months out and has always just followed the point charts that apply to home resort reservations. Unlike previous Resort Agreements, the CFW Agreement creates a new right by declaring that BVTC can adopt new point charts applicable to DVC Resorts at 7-months out and annually reallocate points and such “reallocation may be made across all or any Vacation Home types.” §5.2. In essence, it claims the same new reallocation power that DVCM claims in the Membership Agreement.
New Reservation Charge. In the past, members have contributed to the costs of the reservation programs including the Disney Reservation Component via annual dues, and that will also be the case for CFW. However, the CFW DVC Resort Agreement adopts something that never existed before. BVTC has been given the right to charge a separate fee for members from other resorts attempting to reserve CFW or “certain” other DVC Resorts, that go unnamed. §5.2. As to charging fees for making such reservations, the legal rule is that such charges cannot be made unless the right to do so is reserved in the applicable POS. Not only does BVTC not reserve the right to charge fees for doing reservations in the previous DVC Resort Agreements, but it expressly declares in those Agreements that it will not charge any individual transaction fees to Club Members. See, e.g., BWV DVC Resort Agreement, §7.1. Thus, that new term directly contradicts the terms of the prior DVC Resort Agreements.
New Greater than 11-month Reservation Period. Like other DVC Resort Agreements, the CFW agreement recognizes the possibility that different Home Resort Priority Periods can exist at different resorts. That has never previously happened as the home resort priority period has always been 11-months for all DVC Resorts. What is peculiar is what is now added to that clause, §5.3. BVTC now reserves the right to associate with any new DVC Resort that adopts a longer home resort priority period than any other resorts during the first year of opening, called the “Opening Priority Period,” and that DVCM has the power to determine the length of that opening priority period. DVCM could possibly grant purchasers of a new resort the right to book their home resort at 12-months out for at least the first year the resort is open. What this indicates is that DVD is likely considering doing something like that with new resorts, possibly with Poly. Such a provision does not exist in the pre-Riviera Resort Agreements. It could also possibly lead to the worst case scenario: DVD could adopt a trust plan that includes units that have not yet been declared into an existing resort, such as Riviera and VDH, declare it, like it has done with the CFW plan, to be its own DVC Resort, and grant purchasers the right to reserve at those resorts at 12-months out for a year, while all already existing owners of those resorts can reserve only at 11-months out.
