New Definition of Rental Activity?

[DonMacGregor]

The following is an excerpt from the new CFW Master Declaration:



It doesn't appear to be in the new POS (yet), but there is now at least one resort with a less ambiguous definition of commercial activity, and it specifically addresses a pattern of renting confirmed reservations (not just points) or frequent occupancy by others of such reserved accommodations. Note also, it says a "pattern" of renting reserved accommodations, not "frequent" renting. @Sandisw @Brian Noble

Also interested in the "creating, maintaining, or frequent use of a rental or resale website" language...

Thoughts?

 

[The Jackal]

DVC can do what they want. My only thing is that they themselves play by the same rules. With all the points they own. Not the non declared points, but the 2% of every resort they own and whatever they buy back in ROFR.

 

[tjkraz]

DVD can do what they want. My only thing is that they themselves play by the same rules. With all the points they own. Not the non declared points, but the 2% of every resort they own and whatever they buy back in ROFR.

In this particular situation, I actually trust Disney to act more honorably / equitably than certain for-profit entities who appear to have no qualms about manipulating inventory and point usage, grabbing whatever rooms will yield the highest returns.

 

[BeachClub2014]

The following is an excerpt from the new CFW Master Declaration:

View attachment 830702

It doesn't appear to be in the new POS (yet), but there is now at least one resort with a more precisely defined definition of commercial activity, and it specifically addresses a pattern of renting confirmed reservations (not just points) or frequent occupancy by others of such reserved accommodations. Note also, it says a "pattern" of renting reserved accommodations, not frequent renting. @Sandisw @Brian Noble

Also interested in the "creating, maintaining, or frequent use of a rental or resale website" language...

Thoughts?

I would be a tad nervous if I were the proprietor of a DVC rental business.

 

[BeachClub2014]

DVC can do what they want. My only thing is that they themselves play by the same rules. With all the points they own. Not the non declared points, but the 2% of every resort they own and whatever they buy back in ROFR.

My reading of the very first sentence in the copied language suggests that any of TWDC are exempt from the rental rules.

 

[DonMacGregor]

My reading of the very first sentence in the copied language suggests that any of TWDC are exempt from the rental rules.

Their sandbox, their toys.

 

[BeachClub2014]

Their sandbox, their toys.

Exactly

 

[JackosinDIS]

I would be a tad nervous if I were the proprietor of a DVC rental business.

Particularly in respect of the words “creating, maintaining or frequent use of a rental or resale website”

 

[UrsulaWantsYourSoul]

Can this language be added to previous properties or would only be applied to this one and later?

 

[Hubalorian]

Im not sure if they can retroactively change the language but maybe they could add in the language via resale restrictions? If past July 1st 2024 if you buy a contract on the resale market you agree to the new definition? It will be interesting to see how this all plays out

 

[DonMacGregor]

Can this language be added to previous properties or would only be applied to this one and later?

Good question. I know there have been numerous discussions about what DVC can and can't do regrading changing the POC, or resort-specific Master Declarations, and there is always wiggle language in everything DVC files, so that's a question for more experienced minds. Regardless, that's some laser-sharp language regarding a practice that has been the subject of endless and heated debate for some time.

 

[Rex1993]

I think it would just be better if Disney had a hard and fast rule that was clearly defined, but that's not going to happen.

 

[DonMacGregor]

I think it would just be better if Disney had a hard and fast rule that was clearly defined, but that's not going to happen.

True, but this is much less ambiguous than the prior language, buried deep in the multi-site POS, that casually mentioned "commercial activity" and nothing more.

 

[JackosinDIS]

My reading of this is that they are strengthening their ability to clamp down on the renting of confirmed reservations (spec renting), although it doesn’t actually say that… it only says ‘reserved accommodation’ (all rentals are of reserved accommodation surely, regardless of whether you find a renter before or after you reserve the dates?).

However, read in conjunction with the wording “repeated or frequent purchase and resale” (which on its own could not be classed as commercial activity… I can buy and sell as many contracts as I like thank you!), it does seem like they are targeting a certain type of rental activity?

 

[Rex1993]

I have no idea if it actually happens but I know there has been some discussion about resale brokerages buying up cheap contracts and then stripping them through rental while waiting on a resale.

 

[DonMacGregor]

I can buy and sell as many contracts as I like thank you!

While I don't think they are targeting individuals (or anyone at this point), I don't see any reason why they couldn't curtail your (or my) ability to purchase additional contracts. Selling what you currently own would obviously never be restricted.

 

[DonMacGregor]

I have no idea if it actually happens but I know there has been some discussion about resale brokerages buying up cheap contracts and then stripping them through rental while waiting on a resale.

That has definitely been a topic of discussion. Buying loaded contracts, renting out current or banked points, then flipping the contract.

I'm not sure if there is are regulations against it, but on its face, a broker could list a contract, bring in an LLC associated with the broker to purchase the contract, pocket the commission, rent out the points for an additional profit, then sell the contract down the road, ideally right after more points load and the contract is no longer stripped (with no commission owed to the listing agent). Of course, that all depends on whether a listing agent can sell a contract "to themself", even if it is shielded by an LLC).

 

[Sandisw]

Can this language be added to previous properties or would only be applied to this one and later?

My guess is yes because all they are doing is further defining in clearer language on whst constitues renting for something other than personal use.

We already have a contract saying you can’t rent for commercial purposes so this simply explains what that definition is a bit better.

 

[DonMacGregor]

My guess is yes because all they are doing is further defining in clearer language on whst constitues renting for something other than personal use.

We already have a contract saying you can’t rent for commercial purposes so this simply explains what that definition is a bit better.

Plus, it brings in the relationship of third-parties as well.

 

[Sandisw]

Plus, it brings in the relationship of third-parties as well.

I definitely think it’s an update to the prior rules and I find the buy and sell quote the most interesting.

But, it will be interesting moving forward. It is why it was always risky for people to buy to rent points regularly.