Email from MVC about use of club points

[Cyberc]

DVC has a loose definition that says that at 20 reservations they look at it closely. They have not said that one is limited to 20 reservations or that one can rent 20 reservations.

the policy says that DVC members can make s many reservations as they want. However if in any 12 month period we want to make more than 20 reservations we shall be required to establish to satisfactory of the board that all of the reservations are for personal use and not for commercial use. If we are unable to establish to satisfactory of the board that all of the reservations are for personal use then all reservations in excess of the first 20 reservations are presumed for commercial use and in violation with the membership agreement.

That’s what the policy says - so no you are no limited to 20 reservations but as I read and understand it you can make 20 reservations and rent them - perfectly allowed. But if you make more reservations and can’t establish to the satisfaction of the board that the first 20 reservations are personal use then all reservations in excess of the first 20 reservations are considered commercial use.

 

[dioxide45]

At least for FL enforcement has to be consistent and can’t be selective. Selective enforcement opens up the COA or HOA for that matter for a lawsuit.
As an example an owner had a dog in his condo even though he knew it was against the rules. When the COA found out they send him a notice that it was against policy. The owner refused to comply and in court his defense was that other owners had cats which the COA did nothing about. The owner ultimately won over the COA because selective enforcement is illegal.

What does that mean here? It means at least in FL the enforcement should happen equally to any and all owners. Also mean that the example you gave could be that the one owner was in a different state with other statutes and the other owner was in FL.

You keep referring to HOA and COA. These emails and discussion regarding rentals are primarily ones made through the MVC Exchange Company using Abound Club Points. When renting those, one is bound by the terms and conditions of the exchange company. The HOA or COA isn't involved.

 

[Cyberc]

You keep referring to HOA and COA. These emails and discussion regarding rentals are primarily ones made through the MVC Exchange Company using Abound Club Points. When renting those, one is bound by the terms and conditions of the exchange company. The HOA or COA isn't involved.

That’s also why I keep saying I don’t know how Marriott is structured. I only know how it works for the COA like DVC and if Marriott properties also were a condominium then it would be the same.

I’m sorry if I’m only bringing more confusion, that wasn’t my intention.

The abound club points are they tied to a property? Or do you only get them when you exchange your Marriott weeks into the exchange program?

I just find it puzzling if Marriott as a whole does not a commercial use policy in place that owners can either read online or request.

 

[dioxide45]

That’s also why I keep saying I don’t know how Marriott is structured. I only know how it works for the COA like DVC and if Marriott properties also were a condominium then it would be the same.

I’m sorry if I’m only bringing more confusion, that wasn’t my intention.

The abound club points are they tied to a property? Or do you only get them when you exchange your Marriott weeks into the exchange program?

Marriott resorts are all either HOA or COA. Though I suspect most are really COA. The Abound Points Trust owns individual interests at most of the resorts. The trust may also own whole buildings or an entire resort. There are also different kinds of ownership. Deeded weeks where you own a specific week and unit at a resort that can be fixed but is most often floating. You can own Abound Trust Points. Then there are people that own both.

For deeded week owners that rent weeks from their home resort, Marriott doesn't seem to say anything to them. Sometimes the COA/HOA can step in if something is agregious. I think they did something like this at Aruba Surf Club once. For the most part, there are no real qualms about renting your home resort week.

When an owner opts not to use their deeded week, they can deposit it into the MVC Exchange Company and use Abound Club Points to make a reservation instead. Those reservations are really like an exchange, but the currency is points instead of a week deposit like you would find in Interval International. The issue discussed here and in other threads is renting reservations using points. When a point or weeks owner makes a points reservation, those reservations are facilitated through the MVC Exchnage Company.

 

[Cyberc]

Marriott resorts are all either HOA or COA. Though I suspect most are really COA. The Abound Points Trust owns individual interests at most of the resorts. The trust may also own whole buildings or an entire resort. There are also different kinds of ownership. Deeded weeks where you own a specific week and unit at a resort that can be fixed but is most often floating. You can own Abound Trust Points. Then there are people that own both.

For deeded week owners that rent weeks from their home resort, Marriott doesn't seem to say anything to them. Sometimes the COA/HOA can step in if something is agregious. I think they did something like this at Aruba Surf Club once. For the most part, there are no real qualms about renting your home resort week.

When an owner opts not to use their deeded week, they can deposit it into the MVC Exchange Company and use Abound Club Points to make a reservation instead. Those reservations are really like an exchange, but the currency is points instead of a week deposit like you would find in Interval International. The issue discussed here and in other threads is renting reservations using points. When a point or weeks owner makes a points reservation, those reservations are facilitated through the MVC Exchnage Company.

Thanks for the clarification.

When owners deposit their week with the MVC exchange company and get the abound trust points then the rules and policies governing those points would be the ones to look at. Since it’s a trust the rules and policies could be a whole lot different than from those at the COA.

Basically Marriott can operate with two sets of rules and they can be very different depending on how you buy or even book your vacation.

 

[vacationtime1]

I just find it puzzling if Marriott as a whole does not a commercial use policy in place that owners can either read online or request.

I don't find it puzzling at all.

Marriott wants the ambiguity so it can enforce its rules arbitrarily. Because there is no definition of "commercial activity" that it can enforce consistently.

 

[Cyberc]

I don't find it puzzling at all.

Marriott wants the ambiguity so it can enforce its rules arbitrarily. Because there is no definition of "commercial activity" that they can enforce consistently.

I don’t know if you legally(for a trust) can get away with have rules and policies which are not clearly defined so owners can adhere to them. For a COA you can’t as that will come back and bite you in the a..

Only takes one owner to legally challenge the COA and they will lose. I guess it will never come that far as the COA will settle before it makes it to court.

 

[vacationtime1]

I don’t know if you legally(for a trust) can get away with have rules and policies which are not clearly defined so owners can adhere to them. For a COA you can’t as that will come back and bite you in the a..

Only takes one owner to legally challenge the COA and they will lose. I guess it will never come that far as the COA will settle before it makes it to court.

Exactly.

The ambiguity allows Marriott to threaten expensive litigation to stifle owners they may dislike. We have seen specific examples of that here on TUG where other timeshare companies (I think it was Wyndham) forced serial renters to disgorge their properties and sign NDA's so the rest of us would not know the details.

 

[SueDonJ]

I don't find it puzzling at all.

Marriott wants the ambiguity so it can enforce its rules arbitrarily. Because there is no definition of "commercial activity" that they can enforce consistently.

I don't either.

The governing docs for Marriott Weeks have always contained wording that says in effect 1, owners are expressly allowed to rent their Weeks, and 2, owners are expressly not allowed to use their Weeks to engage in activity that constitutes "commercial activity" including a rental pattern. They've never officially defined "commercial activity" as it pertains to rentals or any other activity, and they haven't publicized if/when they've exercised on that restriction. The docs also say that Marriott has the right to enforce related restrictions arbitrarily.

The docs for Abound contain similar wording/allowances/restrictions.

I do believe that the restriction on the number of points that can be transferred in to Abound members' accounts is an effort by Marriott to affect rental activity. Like everyone else I have no way of knowing that for certain, but it's what I believe (and I could certainly be wrong.)

I don't remember that they've sent out an email about rental activity like the one the OP of this thread mentions, that seems to target owners of a specific property, but it doesn't come as a surprise because this property is a Grand Residence in which owners buy multiple weeks and it's obvious to the entire world that many engage in large-scale rental activity. But it really is anybody's guess as to whether Marriott intends to follow through with restrictions on a large scale. Maybe this letter with its implied threat will result in some no longer playing in the rental market, so whatever metric needs to be satisfied for Marriott to not bring the hammer down will be met?

 

[ljmiii]

I don’t know if you legally(for a trust) can get away with have rules and policies which are not clearly defined so owners can adhere to them. For a COA you can’t as that will come back and bite you in the a..

Only takes one owner to legally challenge the COA and they will lose. I guess it will never come that far as the COA will settle before it makes it to court.

Thus far MVC has successfully defended the trust and its practices from a barrage of lawsuits. I have no doubt this success will continue...particularly since they are incorporated in Florida.

 

[vacationtime1]

Thus far MVC has successfully defended the trust and its practices from a barrage of lawsuits. I have no doubt this success will continue...particularly since they are incorporated in Florida.

I think Marriott's success on this issue to date has less to do with the fact that it is incorporated in Florida than that Marriott is willing to spend hundreds of thousands of dollars on an armada of attorneys to defeat an owner who may have less than that amount invested to begin with.

Marriott has to protect its timeshare rental business from being undercut by its timeshare ownership customers.

 

[Cyberc]

I think Marriott's success on this issue to date has less to do with the fact that it is incorporated in Florida than that Marriott is willing to spend hundreds of thousands of dollars on an armada of attorneys to defeat an owner who may have less than that amount invested to begin with.

Marriott has to protect its timeshare rental business from being undercut by its timeshare ownership customers.

Some would say that Marriott has a fiduciary responsibility towards the owners. If that means going hard after those that rent or being more lenient depends on who you ask. But they don't have a responsibility to their own rental business.

 

[vacationtime1]

Some would say that Marriott has a fiduciary responsibility towards the owners. If that means going hard after those that rent or being more lenient depends on who you ask. But they don't have a responsibility to their own rental business.

But those people are not lawyers.

Note: I am not a fan of Marriott; I am merely suggesting why Marriott is doing what it is doing.

 

[igopogo]

Some would say that Marriott has a fiduciary responsibility towards the owners. If that means going hard after those that rent or being more lenient depends on who you ask. But they don't have a responsibility to their own rental business.

Legally I think Marriott has a fiduciary responsibility to its shareholders, not to its owners.

The HOA of each resort has a fiduciary responsibility to the owners.

A little complicated by the presence of Daniel Craig and others.

 

[Cyberc]

Legally I think Marriott has a fiduciary responsibility to its shareholders, not to its owners.

The HOA of each resort has a fiduciary responsibility to the owners.

A little complicated by the presence of Daniel Craig and others.

I agree the board has a fiduciary duty to owners, but if Marriott runs the board it’s the same without actually being the same.

Daniel Craig?

 

[igopogo]

I agree the board has a fiduciary duty to owners, but if Marriott runs the board it’s the same without actually being the same.

Daniel Craig?

He’s been placed by Marriott on several HOAs for resorts where he has no interest.

 

[Cyberc]

He’s been placed by Marriott on several HOAs for resorts where he has no interest.

Wow Dont know how to respond to that.

Seems ridiculous to place a celebrity on the boards for no other obvious reason that he is a celebrity

 

[frank808]

the policy says that DVC members can make s many reservations as they want. However if in any 12 month period we want to make more than 20 reservations we shall be required to establish to satisfactory of the board that all of the reservations are for personal use and not for commercial use. If we are unable to establish to satisfactory of the board that all of the reservations are for personal use then all reservations in excess of the first 20 reservations are presumed for commercial use and in violation with the membership agreement.

That’s what the policy says - so no you are no limited to 20 reservations but as I read and understand it you can make 20 reservations and rent them - perfectly allowed. But if you make more reservations and can’t establish to the satisfaction of the board that the first 20 reservations are personal use then all reservations in excess of the first 20 reservations are considered commercial use.

This seems wrong and disciminatory to me. Membership A with 200 points will probably not have 20 reservations in a 12 month period. Membership B with 4000 points could easily have 20 reservations in a 12 month period. Seems discriminatory to me based on number of points owned.

Have never read in the CCR for DVC mention exactly the number of reservations that can cause you to go into commercial renting. I have e read that DVC states you can rent your points and it is allowed. But warns prospective buyer that you will be competing on an uneven footing with DVC.

The way I read the restrictions that intent of DVC lawyers was no commercial use of the DVC villas. example running a massage parlor from villa. No where did I read specifically the DVC CC&R specifies commercial renting of villas. Now since DVC wrote the CC&R, I believe DVC will have a hard time convincing a judge to agree to DVC loose wording and interpretation of commercial use. The distinction of what is allowed and what is not will be upon those who wrote the CC&R (DVC) not the purchasers. That is probably why DVC has not stopped outaide rentals of villas but put have put up much effort to dissuade it.

I am not a lawyer nor pretend to be but that is my take from being a landlord all these years.

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[frank808]

I don't either.

The governing docs for Marriott Weeks have always contained wording that says in effect 1, owners are expressly allowed to rent their Weeks, and 2, owners are expressly not allowed to use their Weeks to engage in activity that constitutes "commercial activity" including a rental pattern. They've never officially defined "commercial activity" as it pertains to rentals or any other activity, and they haven't publicized if/when they've exercised on that restriction. The docs also say that Marriott has the right to enforce related restrictions arbitrarily.

The docs for Abound contain similar wording/allowances/restrictions.

I do believe that the restriction on the number of points that can be transferred in to Abound members' accounts is an effort by Marriott to affect rental activity. Like everyone else I have no way of knowing that for certain, but it's what I believe (and I could certainly be wrong.)

I don't remember that they've sent out an email about rental activity like the one the OP of this thread mentions, that seems to target owners of a specific property, but it doesn't come as a surprise because this property is a Grand Residence in which owners buy multiple weeks and it's obvious to the entire world that many engage in large-scale rental activity. But it really is anybody's guess as to whether Marriott intends to follow through with restrictions on a large scale. Maybe this letter with its implied threat will result in some no longer playing in the rental market, so whatever metric needs to be satisfied for Marriott to not bring the hammer down will be met?

Using DVC and MVC terms for "commercial acrivity" I interpret is as I cannot use villa for commercial purposes like running a massage business, use villa to sell things out of (like a mini mart). The COA use of wording is ambiguous at best. If push comes to shove I believe a court of law will rule against MVC and DVC just because if they did not allow rental of unit they should say it. You will have hard time explaining to courts that in one paragraph that rental of unit is allowed. Then in another paragraph say "commercial use" means no renting of unit.

I find it hard to believe that court will look kindly on the obscure clause your lawyers inserted that contradicts another sentence you wrote.

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[SueDonJ]

Wow Dont know how to respond to that.

Seems ridiculous to place a celebrity on the boards for no other obvious reason that he is a celebrity

I want to apologize for laughing but I think your first thought is one that many of us thought when we first started hearing about this Daniel Craig - you're just the first person to voice it. This Daniel Craig isn't Daniel Craig the actor, he's some guy who sits on a few different resort boards without owning at them. Some people have a big problem with it, others not so much. My opinion is that some battles are not worth picking with Marriott and this is one of them. I'm not saying my opinion or anyone else's opinion is right or wrong - it's just that before taking up swords it should be understood that Marriott can put anybody into a board seat at the many resorts where the governing docs entitle them to representative seats, and at the resorts where they don't have that entitlement they still have a decent amount of control over who is allowed to run for a board seat.

 

[SueDonJ]

Using DVC and MVC terms for "commercial acrivity" I interpret is as I cannot use villa for commercial purposes like running a massage business, use villa to sell things out of (like a mini mart). The COA use of wording is ambiguous at best. If push comes to shove I believe a court of law will rule against MVC and DVC just because if they did not allow rental of unit they should say it. You will have hard time explaining to courts that in one paragraph that rental of unit is allowed. Then in another paragraph say "commercial use" means no renting of unit.

I find it hard to believe that court will look kindly on the obscure clause your lawyers inserted that contradicts another sentence you wrote.

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Except Marriott doesn't and hasn't been as contradictory as you say they are with either the provisions in the governing docs or with any letters we've been made aware of that have been sent to owners. They haven't on the one hand said that owners are allowed to rent out their Weeks/Points, and then on the other said that all rentals constitute "commercial activity" and thus are not allowed. What they and the governing docs for the individual resorts which sold Weeks and the Abound (formerly and originally the Destination Club) points system say is that owners are allowed to rent out reservations made using their Weeks and Points, and allowed to rent/transfer Abound Points to other Abound members, except to the extent that a "pattern of rental activity" is identified by them as "commercial activity."

My docs for Barony Beach Club and SurfWatch are up north and others have already provided the language in the Abound docs, but this is a discussion that's taken place on TUG for as long as I've been here. Some say exactly as you do that "commercial activity" can only refer to a business being run out of a unit at a resort but clearly Marriott doesn't agree with that limited definition - in fact at least some of the docs specifically say that "a pattern of rental activity" is what they will consider to be "commercial activity." Through all these years I don't remember ever seeing a TUG thread in which someone learned from Marriott exactly what such a pattern would entail, or any in which someone is claiming that Marriott put them on notice that they're in violation of rental allowances, but there have been plenty of threads in which we all delve into the topic to our hearts' content.

This letter to Grand Residence Lake Tahoe owners feels different. Maybe when Marriott was just Weeks there weren't any owners who owned enough, or contracted with other owners to the extent needed, to significantly impact Marriott's rental business. Maybe now that Points have been in play for over a decade and the rental market is well-established, that metric has changed and Marriott wants to reclaim a piece of that pie. I don't know, am just guessing, but I think if this does end up with a legal challenge it'll be fascinating whether it's Marriott driving the first stake claiming that owners don't have the right to do what's being done or it's owners first up claiming that Marriott has no right to try to stop them.

 

[Dean]

the policy says that DVC members can make s many reservations as they want. However if in any 12 month period we want to make more than 20 reservations we shall be required to establish to satisfactory of the board that all of the reservations are for personal use and not for commercial use. If we are unable to establish to satisfactory of the board that all of the reservations are for personal use then all reservations in excess of the first 20 reservations are presumed for commercial use and in violation with the membership agreement.

That’s what the policy says - so no you are no limited to 20 reservations but as I read and understand it you can make 20 reservations and rent them - perfectly allowed. But if you make more reservations and can’t establish to the satisfaction of the board that the first 20 reservations are personal use then all reservations in excess of the first 20 reservations are considered commercial use.

I think if you review the documentation they have given themselves quite a bit more leeway and control and recently strengthened their stance. It's not simply that one can reserve 20 units.

What Does “Commercial Renting” Look Like?​

While DVC hasn’t defined an exact threshold for enforcement, “commercial renting” is generally understood to include:

• Owning multiple contracts with consistent rental activity
• Rarely (if ever) using points personally
• Posting blocks of high-demand rooms in online forums
• Making bookings solely with intent to resell

These practices go beyond what the average Member does and are likely the primary focus of these new policies.

 

[Hindsite]

Its also worth remembering that MVC operate the system across international boundaries and as such there may be national or local definitions of Commercial activity that are different from eachother, so they need to allow for that possibility, as well as the possibility that the definitions change over time. MVC would also need to protect itself from any potential complicity in the event that the local taxation authorities took issue with any potential tax liability from the specific activity of an owning individual or owning organisation. It is quite possible that a tax authority definition of Commercial activity would be different from the definition that an insurance company would take and/or any labour regulations that might apply to the activity that the individual or organisation undertake. For example, there are people who state that they include their maint fees as a tax deductible for their business e.g They sent their staff on timeshare stays as a bonus or perk, which makes it difficult to see how that can't be commercial activity, but isn't a pattern of rental.

 

[Cyberc]

I think if you review the documentation they have given themselves quite a bit more leeway and control and recently strengthened their stance. It's not simply that one can reserve 20 units.

It is actually that simple. Sometimes the simplest solution is the best solution, but maybe less believable.

Owners have requested the policy and any related documents etc thats used together with the commercial use policy. All they got was the written policy as I mentioned above. That means currently you are allowed to have 20 reservations and you can rent them. If you make 21 reservations your last one could risk being cancelled - this is my opinion and understanding of it.
I'm sure that if DVC wanted a more narrow definition they would have changed it already.

DVC did give themselves the power to change the policy, but here is where the FL statutes comes into play. They are free to change it, as long as they don't restrict it any further than it already is.

I know that starting June 1st we have to attest that all reservations are for personal use. DVC defines personal use as: You going personally, but also friends, family and lessees are included in DVC' definition.

 

[Cyberc]

This seems wrong and disciminatory to me. Membership A with 200 points will probably not have 20 reservations in a 12 month period. Membership B with 4000 points could easily have 20 reservations in a 12 month period. Seems discriminatory to me based on number of points owned.

It's not that I disagree with you, but currently thats the definition DVC goes by. Since the policy is from 2011 and the membership has evolved since then with many more members but also members could own a ton of points it could be one of the reasons why DVC haven't actively enforcing the policy.