Yes they did, but this doesn't make it necessarily "right" or "legal".
A bit of history.
In the first 18 years in DVC history, the DVC management interpretation of point reallocations was that they could only move points withint the same room type, to reallocate seasonal or weekly demand. That's what they did with the big week-days/weekends reallocation.
The fact that this was the earliest interpretation is confirmed by:
- how the POS is written (more on this later)
- the early marketing materials; there are videos on YouTube showing the videos included in the free DVC DVD, where the guy explains what can happen during a point reallocation and he only explains that points may move seasonally within the same room type
- the accompanying document that DVC asked to sign to owners. That is a document where the purchaser confirms that he has been explained and understands DVC rules and regulations. The earliest versions explain clearly that points reallocation can be done withint he same room type to balance seasonal demand *
So the message was quite consistent across the board. When DVC sold the THV, the main marketing spiel was "Buy points to stay in a 3BR villa for the same cost of a 2BR villa". And actually it was quite the deal and in the early days THV were very popular: I remember reading posts on the DISboards of people asking "are you buying SSR just to have a shot at THV at 11 months?".
Right after the resort sold out, the DVCMC rebalanced the
point charts, according to a new interpretation of the POS.
Was this right? I guess there were quite a few people who were sold points on the idea of paying low points for a 3BR villa who were upset by the change. They were promised something and just after the resort sold out, that promise was broken. It might have been legal (and I don't think so), but I cannot blame anyone who might have been furious.
Now about the legality. As I said the initial interpretation was that reallocations can only be seasonal and not across room types and that was how the POS was written. Changing that crucial interpretation later causes a lot of contraddiction in the POS. There are at least three huge problems:
1) the paragraph describing a point reallocation states that any increase in points in a day must be balanced by a decrease in a different day. The increase in THV had been balanced by a decrease in a different room category in the same day. This is not permitted by the POS
2) The destuctive damage paragraph regulates what happens when a building or part of a building is damaged so much that it's not convenient to repair it. Something not too absurd for the THV since a huge hurrican migh cause a tree to fall on one and completely destroy it. That paragraph states that the Unit is removed from the resort, owners of points of that unit are reimboursed by the insurance and they lose their contracts and they are not members anymore. This is done so that the remaining resort is still in balance according to the "One-to-one purchaser to accommodation ratio". So if a unit is removed from the system, it must be possible to continue to book the remaining resort with the points available to members. Which is not true anymore in the case of SSR because of the THV. A reallocation is not permitted by the POS to balance the resort after destructive damage, a reallocation can only happen to balance seasonal demand
3) Florida law states that the "One-to-one purchaser to accommodation ratio" must be valid at any moment for each "timeshare unit". DVC defines a "unit" in a different way that the Florida law, but that is not important here: THV are declared in their own units, separated from the rest of the resort. So the reallocation is in violation with the law.
I have to add that DVCMC has the right to change most parts of the POS "in the interest of the membership", so they might change the POS to eliminate the contraddiction in 1 and 2 (not sure how they can overcome 3). However they can do so only in the interest of the membership and only in accordance with the law. And they haven't done it yet. The've changed all resorts POS to allow multiple UY for the same Unit; given the 2020 reallocation debacle, if the change was so straightforward, why haven't they changed the POS accordingly? Maybe it's because they cannot.
All of this before we even start talking about the lockoff premium increase, which is wrong for so many additional reasons that it blows my mind they even attempted it.
* = DVC states that those accompanying documents are not legally binding. I know nothing about USA consumers protection laws, but I can tell you that if something like this happens in Europe, it would be an easy court win. When there are proofs you've explained a crucial part of your product in a certain way, to the point that your customer has signed a document with that interpretation, then that becames legally binding otherwise you've misled the customer. If it's true they're not legally binding, then guys, you need better consumers protection laws.