New Definition of Rental Activity?

[mamaofsix]

I'm guessing they are at least taking a good long look at the new language (along with their lawyers) before anyone says anything. I'm just wondering if it hasn't at least got their attention.

Oh I imagine it very much has their attention.

 

[DonMacGregor]

As to the 20-reservation rule mentioned that was created in 2007, it was actually a rule issued by DVD that was not included in any of the POS documents, and provided that if a member made more than twenty reservations in any one year period, a presumption would arise that the member is violating the commercial purpose limitation, and the member, to avoid any penalty, would need to show that the reservations were not for a commercial purpose, and if unable to do so the reservations after the first 20 would be voided.

I suppose that begs the question: If DVD felt empowered to enforce a 20-reservation rule that wasn't included in any of the POS documents 2007, and it went (to my knowledge) unchallenged legally even though warning letters were issued, why then would they feel any less empowered to enforce a rule not included in the POS documents in 2024? Understanding that the argument has been made that it would potentially be a rule applied retroactively to contracts already sold, but then so too would have the 20-reservation rule applied to any contracts written before 2007.

If they reserve the right to re-interpret or "clarify" (not amend because it was never written anywhere) the definition of "commercial enterprise", first in 2007, and again now in 2024, and the precedent for applying restrictions not incorporated into the POS dates back to 2007, why would they not feel empowered (absent legal challenge) to do so now, particularly now that they have incorporated this more detailed definition of what a "commercial enterprise" includes into the CFW Master Declaration?

 

[HyperspaceMountainPilot]

I have no proof whatsoever but I’m guessing Disney already has or will reach out to the obvious major violators soon with more specifics. I’m assuming DVD’s goal isn’t to fight the rental sites tooth and nail but to wind down the abuses quickly with some sort of mutually acceptable resolution.

One major question in my mind is whether they want to crash the resale market (so they can scoop up resale trust points and/or flip them into new points) or if they’d prefer to let the contracts held for rental purposes slowly trickle back on the market over the next couple years.

 

[DonMacGregor]

I have no proof whatsoever but I’m guessing Disney already has or will reach out to the obvious major violators soon with more specifics. I’m assuming DVD’s goal isn’t to fight the rental sites tooth and nail but to wind down the abuses quickly with some sort of mutually acceptable resolution.

One major question in my mind is whether they want to crash the resale market (so they can scoop up resale trust points and/or flip them into new points) or if they’d prefer to let the contracts held for rental purposes slowly trickle back on the market over the next couple years.

Curious as to why you think Disney would feel obligated to acquiesce to or allow considerations for the rental sites? Why would Disney care if the new regulations were acceptable to third party rental sites?

 

[DL1WDW2]

I think Disney wants to clean up the industry they have created .
Maybe They want to shutter the smaller companies and keep the stronger ones that matches their needs .
For instance …let’s pretend the survival company that works best with Disney is also the one that just happens to have many former guides and castmembers already capable of this .
Im not mentioning any names because I really don’t know . I’m just thinking this might be the answer we are trying to figure out and the one that Disney is working towards ultimately.
I m pretty sure they have always had a legal team to monitor the foreclosures to their advantage
Why not have a resale company that is designed to allow a resale and rental option as a compatible
partner . Would we all be happy because it upholds the high standards and legal details that have made DVC successful for all of us ?
And the other division will be the game changer that makes even more money for Disney and more opportunity for all of us will be the Trust and moving forward requires a whole new game plan .
Time to start paying attention to everything that is about to be created cause it’s not going to be the same Home Sweet Welcome Home.
And we all know how much we crave new and creative but need the old and familiar too…
its what keeps the discussion boards alive .

 

[DonMacGregor]

Why not have a resale company that is designed to allow a resale and rental option as a compatible
partner .

It sounds like they are eliminating any type of rental through any third party. To write that language ("creating, maintaining, or frequent use of a rental or resale site") into the Master Declaration, and then turn around and say "well yeah, but not this one rental site" doesn't seem tenable.

I get that the language seems contradictory. If, on one hand, you cannot create or maintain a rental or resale website, how then could anyone ever have the opportunity to use any such site frequently?

 

[DL1WDW2]

Disney outsources everything now . So they make it work for their benefit however they want to play the game . If they can create a division that forms a partnership and gets rid of their problems with out of control rental mom & pops but also allows their members to continue under 20 “ per year…
Would that be reasonable.?

 

[HyperspaceMountainPilot]

Curious as to why you think Disney would feel obligated to acquiesce to or allow considerations for the rental sites? Why would Disney care if the new regulations were acceptable to third party rental sites?

Mostly because (as a litigator) I know how expensive litigation is. Plus Disney may want to avoid bad PR. I’m not saying they would continue to allow major rental companies to exist, but they might negotiate a 6-12m phaseout/wind down to (a) avoid litigation costs, (b) avoid disrupting existing reservations for rental guests, (c) avoid a sudden HUGE flood of points onto the resale market. Not sure if anybody has a closer estimate but purely based on the stripped contracts you see for sale, I would imagine some rental companies sit on over 50,000 points, and I bet they are concentrated at some resorts more than others.

One random shot-in-the-dark option would be that Disney agrees to buy all of the points for its trust wholesale at prevailing market rates instead of simply canceling reservations, blocking rentals and forcing them to try to rapidly unload 100+ contracts all at once.

 

[Robbie Cottam]

So how long before we see the first “My DVC Rental was canceled“ thread?

anyone have any guesses?

 

[DonMacGregor]

Mostly because (as a litigator) I know how expensive litigation is. Plus Disney may want to avoid bad PR. I’m not saying they would continue to allow major rental companies to exist, but they might negotiate a 6-12m phaseout/wind down to (a) avoid litigation costs, (b) avoid disrupting existing reservations for rental guests, (c) avoid a sudden HUGE flood of points onto the resale market. Not sure if anybody has a closer estimate but purely based on the stripped contracts you see for sale, I would imagine some rental companies sit on over 50,000 points, and I bet they are concentrated at some resorts more than others.

One random shot-in-the-dark option would be that Disney agrees to buy all of the points for its trust wholesale at prevailing market rates instead of simply canceling reservations, blocking rentals and forcing them to try to rapidly unload 100+ contracts all at once.

I had interpreted your post as suggesting DVC would establish some sort of framework within which third party rental sites would continue to operate, under some agreement with Disney. If you’re talking about a “mediated” exit strategy that allows for a transitional period, then I certainly can see that happening.

 

[HyperspaceMountainPilot]

I had interpreted your post as suggesting DVC would establish some sort of framework within which third party rental sites would continue to operate, under some agreement with Disney. If you’re talking about a “mediated” exit strategy that allows for a transitional period, then I certainly can see that happening.

Yeah, definitely a mediated exit, not a long term continued cannibalization of deluxe hotel market pricing. Plus a tiny chance Disney might consider buying one or two of them outright for about the market value of the points, if they are looking to get a smorgasbord of points for a new DVC trust product.

 

[Genie+]

Maybe They want to shutter the smaller companies and keep the stronger one that matches their needs .
For instance …let’s pretend the survival company that works best with Disney is also the one that just happens to have many former guides and castmembers already capable of this .

I wondered the opposite, if groundwork is being laid to for DVC to bring aspects of the resale and rental market in house, with a multi-step plan in the works. A broker video this week showcased a family who made a large 3k VGF points ‘legacy’ purchase resale so the whole family could continue the grand parents’ tradition of WDW trips. One large sale and ~$40,000 commission. 100s of millions in commissions are ringing up without a way for DVD/DVC to profit. I’m expecting that to change.

 

[Cyberc1978]

AFAIK there is no written language guaranteeing 20 reservations. There is language prohibiting commercial use - commercial means for profit.
My understanding is that many years ago DVC sent letters to folks making more than 20 reservations per annum warning them that DVC would assume that more than 20 reservations per annum would be presumed to be commercial.
Just because over a decade ago DVC decided that 20 was the threshold that would trigger enforcement of the no commercial use clause & advised a few owners of that fact didn’t create a ‘right’ to make 20 rentals for all owners.
The rental world has changed since then, it‘s grown & DVC may have decided the 20 reservation threshold isn’t sufficient to enforce the no commercial use clause & they may now have the ability/technology to use a more sophisticated approach to enforce a clause that was always there.

Edited to add: I’m linking this article https://dvcnews.com/index.php/dvc-p...commercial-renting-limitations-amended-to-pos because it suggests there might have been language in the POS about 20 reservations back in 2007, I can’t really tell from the article.

thanks, I've had that link for some time now and its my understanding that the 20 reservations per year was mentioned by DVC in the documents and not just some random number they pulled up from their hat.

 

[Cyberc1978]

Commercial use wasn’t defined as 20 rentals. It was a metric they offered to where renting clearly crossed the limit.

The contracts say for personal use and not for commercial use. What would a reasonable person consider personal use? I don’t think buying contracts to rent most or all of the points on a repeating basis. Why would a person buy many times over the amount of points they’d use for themselves and circle of family/friends? I think there’s a clear difference between the occasional excess of points to rent and intentionally buying excess points for rental purposes.

Is it bad faith to buy 800pts with plans to rent out 500pts yearly, when the contract says no commercial use and for personal use only? I can’t see people doing that unless as a for profit endeavor, otherwise why bother.

But I can see arguments against any enforcement too. Somebody can say they want 4 home resort priorities and that’s how/why they have excess points and they’re not renting for profit, just to offset costs.

There’s more but my suspicion is DVC will change over the next several years and as they tighten the ship they’ll offer new ways for owners and buyers to navigate. If they are able to improve the product for casual owners while opening new streams of profit for themselves, that might not upset the majority of owners and be quite an accomplishment lol.

if you check the link @sndral posted, there you can see the mentioning of the 20 rentals per year.

Its my understand that the 20 rentals per year was how commercial renting was defined and it was written into to documents also to avoid any confusion with language that wasn't clear enough.

What you and I define af commercial use is more or less irrelevant, what isn't, is how DVC defines it. If members have acted in good faith and followed the guidelines of DVC, then they can hardly crack down on the same members just because they keep following the same, now old, guidelines.

I disagree, buying 800 points and renting 500 of them, is not commercial renting (as per DVC old guidelines) when you stick to less than 20 reservations.

IF DVC decide to change their perception or guidelines of how commercial renting is defined, that's okay. But that would count towards new members as the old members should still be allowed to follow the old guidelines as they might have done for a long time. If not, then DVC is acting in bad faith not the members.

 

[Cyberc1978]

So how long before we see the first “My DVC Rental was canceled“ thread?

anyone have any guesses?

My understanding is that right now it only applies to CFW - Maybe that changes in the future.

 

[we"reofftoneverland]

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).

I can’t wait for Disney to crack down on renters. I have no problem with people occasionally renting out their points, but there are commercial entities who manipulate the system and make it harder for regular owners to book what they want. It’s not a case of who cares who uses the points. These commercial entities do not behave as regular point owners and make the system sticky and clunky.

 

[JackosinDIS]

I do find it interesting that on all of the various sites I've seen debating this issue, whether it's a forum or Facebook or IG or whatever, I've yet to see a single comment by anyone associated with any of the recognizable online rental or resale companies. Curious...

There is this, posted after the new language was published as part of the CFW declarations…

https://www.dvcresalemarket.com/blo...led Multi-site,of the first 20 reservations.”

 

[we"reofftoneverland]

I do find it interesting that on all of the various sites I've seen debating this issue, whether it's a forum or Facebook or IG or whatever, I've yet to see a single comment by anyone associated with any of the recognizable online rental or resale companies. Curious...

I can guarantee you they are commenting but under burner accounts or just surreptitiously. They are the people arguing hard for rentals. No average dvc owner is on here arguing for rentals.

 

[Hubalorian]

There is this, posted after the new language was published as part of the CFW declarations…

https://www.dvcresalemarket.com/blog/is-renting-my-dvc-points-authorized/#:~:text=DVC Rentals Are Authorized&text=The section titled Multi-site,of the first 20 reservations.”

As of right now, they are correct. However, we shall see if things change moving forward

 

[we"reofftoneverland]

There is this, posted after the new language was published as part of the CFW declarations…

https://www.dvcresalemarket.com/blog/is-renting-my-dvc-points-authorized/#:~:text=DVC Rentals Are Authorized&text=The section titled Multi-site,of the first 20 reservations.”

lol. These are the people Disney will shut down. And this attitude tells you everything you need to know. This attitude is probably what is making Disney address the issue. They think they are running dvc. I’ve got news for them. Disney has every right to shut down rentals even under the old POS. Disney cannot allow another company act like they are running dvc. Disney actually HAS to assert control over their product for the owners.