Commercial renting website

[dumbo71]

I've posted this before, but I think the most important driver behind the crackdown on commercial renting is the 11.5% resort tax.

Anyone who is in the business of renting out resort rooms is obligated to pay the tax. Disney pays the tax on all the rooms its rents out.

It wouldn't surprise me at all if the government bodies told Disney that they expect Disney to collect the tax from the owners who also rent or prove that the amount due from this activity is negligible.

I don't think this is about member complaints about availability. I think it is about the money.

I susupect this does play a role in this.

I also agree with DOC that WDW DOES have an obligation to COLLECT the tax and FORWARD said tax to the State.

DVC received some form of notification or warning IMO. It wouldn't surprise me in the least if the point morphing and lack of tax collection on rentals both had a large role. Both are illegal.

 

[tor]

The POS, revised 11/2004, states:

"7.3 Personal Use Only. .....(p. 37)

"3. Making Reservations for Non-Club Members

2) ...... If the non-Club Member is renting, it is the responsibility of the Member to notify Member Services when making the reservation. (p. 50)

We'll just have to agree to disagree on this.

When/If the state and local governments decide to get serious about collecting the taxes they are owed in this area, I believe they will go after Disney. It's easier to demand that Disney collect it or at least identify those who owe it. Either way, it's a headache Disney/DVC won't want.

Again, I doubt we'll ever agree - except I do agree that those in the business of renting owe the tax and are ultimately responsible for paying it. But I think the taxing authorities will involve Disney when/if they decide to start collecting what is owed and not paid. Were I in the business, I would be worried.

Wonder if you'd be able to use your membership if it had a tax lien? I think you'd have trouble selling it.

DISCLAIMER: Above represents my opinion. I am not a lawyer and seldom even watch them on TV.

As you can see from the POS Disney is already attempting to collect the information on those who are renting and I would not be surprised if they inform you of your tax responsibility if you tell them it is a rental. I will ask MS when they reopen what they do with this information. I disagree that the tax is only due for people in the business of renting but also the casual renter as well. As far a lien most become an issue at time of sale but this would be a sales tax issue and it would probably be a confiscatory type of enforcement. I wonder if tax sale would have to pass ROFR?

 

[lisareniff]

I've posted this before, but I think the most important driver behind the crackdown on commercial renting is the 11.5% resort tax.

Anyone who is in the business of renting out resort rooms is obligated to pay the tax. Disney pays the tax on all the rooms its rents out.

It wouldn't surprise me at all if the government bodies told Disney that they expect Disney to collect the tax from the owners who also rent or prove that the amount due from this activity is negligible.

I don't think this is about member complaints about availability. I think it is about the money.

Wow! Now that's a line of thought I hadn't gone down! (can you tell I'm so totally not a business person).

 

[tor]

Florida Statute 212.03 Transient rentals tax; rate, procedure, enforcement, exemptions. -

(2) The tax provided for herein shall be in addition to the total amount of the rental, shall be charged by the lessor or person receiving the rent in and by said rental arrangement to the lessee or person paying the rental, and shall be due and payable at the time of the receipt of such rental payment by the lessor or person, as defined in this chapter, who receives said rental or payment. The owner, lessor, or person receiving the rent shall remit the tax to the department at the times and in the manner hereinafter provided for dealers to remit taxes under this chapter. The same duties imposed by this chapter upon dealers in tangible personal property respecting the collection and remission of the tax; the making of returns; the keeping of books, records, and accounts; and the compliance with the rules and regulations of the department in the administration of this chapter shall apply to and be binding upon all persons who manage or operate hotels, apartment houses, roominghouses, tourist and trailer camps, and the rental of condominium units, and to all persons who collect or receive such rents on behalf of such owner or lessor taxable under this chapter.


(5) The tax imposed by this section shall constitute a lien on the property of the lessee or rentee of any sleeping accommodations in the same manner as and shall be collectible as are liens authorized and imposed by ss. 713.68 and 713.69.


As you can see it is the renters responsibility to collect the tax and Disney is in compliance by tracking renters. There is also no exclusion for non commercial activity.

 

[Doctor P]

the compliance with the rules and regulations of the department in the administration of this chapter shall apply to and be binding upon all persons who manage or operate hotels, apartment houses, roominghouses, tourist and trailer camps, and the rental of condominium units, and to all persons who collect or receive such rents on behalf of such owner or lessor taxable under this chapter.


There is also no exclusion for non commercial activity.

I'm pretty sure that the clause you quoted (as I quoted above) DOES refer to commercial activity only (there is some ambiguity in the phrasing, but my reading is that it applies to those who "manage and operate"...which is a commercial phrasing).

 

[3DisneyNUTS]

wow you guys are goooood!

 

[3DisneyNUTS]

Yes you are missing something.

What about the owner who rents three or four studios with HIS/HER points and has family staying with them? Makes no difference if it is renters in those studios or family. Those rooms would still be booked.

Someone who owns 1500 points in entitled to book rooms using those 1500 points each and every year. It makes no diference whatsoever if they use them or rent them. Rooms still will be taken.

Commercial renters hurt no one despite what you'll read here on the DIS.

They were hurting owners of the small resorts by morphing points but that is an entirely different problem and one that has seemingly been eliminated with the one transfer rule and the propper tracking of transferred points so they maintain the home resort status intended.

Really if people would just think about this logically for a moment they would get off this bandwagon.

not nessessarily.... the reason for the commericial renting clause is because DVC plans for people not to fully use their points. That is why they expire so to speak and why you have to use them or lose them according to use year, banking and borrowing. This commercial renting takes that out of the equation hense they are taking rooms away from people who use their points legtimately. The renting provision IMO is a courtesy for owners not to lose points if they cannot use them, not for someone to make a business out of it. The different ways of renting (legally vs illegally) definitely has a different impact on room availability.

 

[LisaS]

As you can see it is the renters responsibility to collect the tax and Disney is in compliance by tracking renters. There is also no exclusion for non commercial activity.

I agree with Carol. I see this as very similar to what happened in the high-tech industry. Many companies were unwilling to hire contractors who wanted to work on a self-employed basis (but who were not incorporated) due to concerns that the IRS would come after the company if it suspected that contractors were skimping on their taxes. It was the contractors' responsibility to pay their taxes and the company's responsibility to issue 1099s but the word was that the IRS would go after the company rather than the contractors, at times even when the contractors had paid every penny they owed!

 

[spiceycat]

boy that isn't right. but the IRS doesn't care about being right - just legally correct and you have to proof it. the only place where you are guility until proven innocent in this country. where their advice isn't always correct and it is your fault that they gave you wrong information.

I am amazed again for the people here.

you know if people here can find these sites - why can't Disney or DVC if they are really serious about closing down commerical renting.

I mean those sites don't even offer to make it seem like a community or have forums or anything. Just renting.

 

[DisneyKidds]

Ok, from a practical point of view commercial renting might not affect the majority of individual members in any given year, but it does hurt members overall.

Commercial renters obtaining speculative reservations during peak times is one very clear way. The person in question in the OP has a couple of listings on ebay....one during 4th or July and one during March vacation season. Those are reservations members or their guests (yes, even non-commercal renting guests) should have had available to them.

Commercial renters also hurt by creating additional competition for limited reservations, again primarily during peak times. At any given time there are only so many members vying for reservations for a particular vacation week. In addition, members may have true guests, possibly creating more competition for that same vacation week. Yes, there may be members engaged in non-commercial renting that have a "customer" for whom they might make a reservation for during that same vacation week, creating yet more competition for that week. However, to this point the non-member demand for that week is still probably pretty low. Now enter the commercial renter. They open that same week up to a much greater population of non-members, creating much more competition for a week in which it can be difficult to obtain a reservation. Clearly, this hurts members ability to obtain a reservation and to engage in non-commercial rental activity as allowed by the contract.

Bottom line is that commercial renting affects availability. Add to that the whole "competing with Disney CRO" angle and there are valid reasons commercial renting is prohibited, both to protect members rights and to protect Disney themselves.

 

[dumbo71]

Ok, from a practical point of view commercial renting might not affect the majority of individual members in any given year, but it does hurt members overall.

Commercial renters obtaining speculative reservations during peak times is one very clear way. The person in question in the OP has a couple of listings on ebay....one during 4th or July and one during March vacation season. Those are reservations members or their guests (yes, even non-commercal renting guests) should have had available to them.

Commercial renters also hurt by creating additional competition for limited reservations, again primarily during peak times. At any given time there are only so many members vying for reservations for a particular vacation week. In addition, members may have true guests, possibly creating more competition for that same vacation week. Yes, there may be members engaged in non-commercial renting that have a "customer" for whom they might make a reservation for during that same vacation week, creating yet more competition for that week. However, to this point the non-member demand for that week is still probably pretty low. Now enter the commercial renter. They open that same week up to a much greater population of non-members, creating much more competition for a week in which it can be difficult to obtain a reservation. Clearly, this hurts members ability to obtain a reservation and to engage in non-commercial rental activity as allowed by the contract.

Bottom line is that commercial renting affects availability. Add to that the whole "competing with Disney CRO" angle and there are valid reasons commercial renting is prohibited, both to protect members rights and to protect Disney themselves.

Fair enough even if I don't agree.

Based on your post is it fair to say that you consider someone a "commercial renter" if they pre-book peak weeks and then rent the ressie? If so how would you feel if the booked just random weeks?

Following that up, is it fair to say that you feel the number of rentals per year is insignificant, only the method used i.e pre-book peak weeks vs. renting a room when you have a person willing to rent?

Thanks for your answers.

There has to be set parameters defining "commercial" renting IMO. The burden of defining "commercial" lies with DVC and we are still waiting for a definition.

I would consider someone commercial ONLY if they do not use the majority of the points for their personal use. I'm not talking about someone who rents all of their points one year either. I'm talking about a pattern of rentals where the only clear goal is to profit at the expense of DVC and CRO.

What gets lost in the shuffle is that these "changes" end up hurting the everyday member far more than it will ever effect the "commercial" renter. They are few and far between IMO.

 

[magerzoo]

That website should be shut down!

 

[Deb & Bill]

...I would consider someone commercial ONLY if they do not use the majority of the points for their personal use. I'm not talking about someone who rents all of their points one year either. I'm talking about a pattern of rentals where the only clear goal is to profit at the expense of DVC and CRO....

This is where you and I will disagree. To me, anyone who regularly rents out their points, whether it is 40 or 400 is a commercial renter. An occasional renting out, maybe once every five or six years, to avoid losing the points, might not fall into that category for me. I can find family members or friends that I can give those points to instead of renting them to complete strangers.

We have too many options to use our points to get to the point where they are useless without renting them out to strangers.

 

[drakethib]

Yes you are missing something.

What about the owner who rents three or four studios with HIS/HER points and has family staying with them? Makes no difference if it is renters in those studios or family. Those rooms would still be booked.

Someone who owns 1500 points in entitled to book rooms using those 1500 points each and every year. It makes no diference whatsoever if they use them or rent them. Rooms still will be taken.

Commercial renters hurt no one despite what you'll read here on the DIS.

They were hurting owners of the small resorts by morphing points but that is an entirely different problem and one that has seemingly been eliminated with the one transfer rule and the propper tracking of transferred points so they maintain the home resort status intended.

Really if people would just think about this logically for a moment they would get off this bandwagon.

Disagree Dumbo.

Commercial renters screw over DVC Members. How? They book premier times of the year (Christmas, New Years, easter, etc) with the sole intention of renting it out for a profit.

Some DVC family who pays there dues and abides by the rules is now SOL because Mom and Dad have to be at the office and can't afford to take off work to start calling trying to book a the 11 month windows for the same time period whereas the commercial renter can sit at home or whatever to stay on the phone and make the booking as that is part of their "job".

We can all sit and argue rather or not is part of the POS, Contract, or whatever. I am no lawyer and wouldn't know the language anyway. I do watch Boston Legal though (they have some babes on that show)

When people do this it is wrong and against the spirit of something that is supposed to be good and greed has screwed it up. YMMV (someone will snip this area and say Disney has greed and blah blah)

Now, with that being said, I see nothing wrong with someone wanting to rent out their points that they won't be using for whatever reason, but when it comes to prebooking premier weeks because the commercial renter knows he or she will get top dollar and screw a DVC family out of a vacation, I hope they get punished (i.e. DVC membership revoked) for it.

Again YMMV

I hope this bandwagon remains strong.

No Offense Buddy (especially to a fellow Texan). We just disagree on this topic but I do agree with you on the morphing.

EDIT: I should have read the whole thread before responding, others seem to have the same thoughts as I do on the subject.

 

[drakethib]

Think about this; Somewhere in the world there's a child of a Disney executive who won't go to private school because her parents can't afford both that and the BMW.
?

Not possible.

Won't happen.

Pipe Dream.

 

[DisneyKidds]

Thanks for your answers.

Why do I feel I'm being led down the proverbial path? Well, it seems we pretty much agree, so it may not be that interesting a trip.

Do I consider someone who pre-books peak vaction weeks to automatically be a commercial renter? No, although I think it stinks of being commercial-like if it's pre-booked and sold on ebay at a premium over more typical rental rates. However, if it's just a member who can't use points for some reason and they are just trying to get the best value for the points I suppose it's within the terms of the contract, even if such speculative reservations made to obtain maximum profit might not be withing the spirit of the program. Such reservations on spec are not just trying to make use of the points, but make use of the points at maximum profit....but it's probably "legal".

Do I consider method or number of rentals more significant in assessing commerciality? I consider number of rentals to be more significant. While I may not like the methods employed at times, the method does not make it commercial.

I agree that what would best identify commercial renting is patterns, and that seems to be what DVC has alluded to in enforcement of contract provisions. No, they have not really identified "commercial patterns".

As far as I'm concerned it shouldn't matter how many points someone owns and whether they use the majority of those points for personal use when looking at whether rentals are commercial. Someone could own 800 points and use 600 for themselves, but if 200 of the points they purchased were for the express use of renting.....well, there could be a commercial component there, IMHO. It all comes down to intent of the owner. If any points were purchased with the express intent of renting them I feel that makes those associated rentals "commercial". Yes, even if someone purchased extra points to rent out just to pay dues, it still is commercial as the emphasis for those points was saleability and profit to pay a bill. It shouldn't matter what that bill was for. Of course that deals with the dictionary definition of commercial, and not necessarily the DVC definition. Alas, there is no way to prove intent. After all, other than the Shadow, who knows what evil lurks in the hearts of men?

Curious....what "changes" aimed at curtailing commercial rentals do you feel are hurting everyday members?

 

[jekjones1558]

Curious....what "changes" aimed at curtailing commercial rentals do you feel are hurting everyday members?

Someone on another thread reported that, as of Jan. 1, MS will require all names of room occupants at time the reservation is made and MS will not allow changes. If this is true (should know starting today) then this rule could be aimed at halting the commercial renters from pre-booking weeks for future rental. It would also make it really rough on some of us who never rent but whose family members have health issues that sometimes make last minute changes/substitutions necessary.

 

[Muushka]

Someone on another thread reported that, as of Jan. 1, MS will require all names of room occupants at time the reservation is made and MS will not allow changes. If this is true (should know starting today) then this rule could be aimed at halting the commercial renters from pre-booking weeks for future rental. It would also make it really rough on some of us who never rent but whose family members have health issues that sometimes make last minute changes/substitutions necessary.

I hope that this is not the case, that a reservation cannot be changed. Many times we will invite friends to join us and we won't know if they can come until the last minute (these are friends who live in FL).

I can understand not allowing the entire reservation to have a name change, but you should be able to add or subtract people.

 

[3DisneyKids]

As mentioned earlier there is a copyright issue to say the least with the pictures and floor plans they are using. Using images in signatures etc. is one thing but using them on a website in which someone is trying to make a product is another. I'm sure the Cirque folks would love to see their image used without permission. I bet the sites will be gone soon.

Sorry if this has already been addressed (I am still making my way through the rest of the thread)...

Disney has stopped certain listings on eBay due to the use of copyright photos being used without permission (back to the Jay Pellar thread, I think...or at least one of the commercial renting threads that was active during that time...there were lots for a while).

Also, this particular website was mentioned back over the summer. So nothing has been done in at least 6 months. I have no idea whether or not anyone here reported this to Legal or not back then, but I am willing to be they know about it now based on this thread....

 

[DisneyKidds]

Someone on another thread reported that, as of Jan. 1, MS will require all names of room occupants at time the reservation is made and MS will not allow changes. If this is true (should know starting today) then this rule could be aimed at halting the commercial renters from pre-booking weeks for future rental. It would also make it really rough on some of us who never rent but whose family members have health issues that sometimes make last minute changes/substitutions necessary.

I read the 'require names of occupants' part, but not the 'not allow changes' part. I don't think that will never happen, so I don't buy this commercial renter's red herring .

Yes, MS will ask for the names of all members of a party when the reservation is made. They may even question certain changes. I suspect that such scrutiny will also be based on patterns.

If John Q DVCMember keeps making resrvations in his name and keeps changing those to totally unrelated names, especially during peak times, before the travel date then maybe they'll look at it, and act if a pattern is established. On the other hand, if he makes a reservation that includes himself, Mary DVCMember, little Johnny DVCMember and Grandma and Grandpa DVCMember, later adding or deleting another member of the DVCMember clan or adding another unrelated name to the existing party, I can't see there being a problem.

I don't think this change will affect anybody who is making reservations in good faith within the intended rules of the system.

Who knows, I could be wrong.........time will tell.