Does David's tell you if the renter cancels?

[Brianstl]

You really want the DVC member to be responsible and bear the entire liability, but your simplistic argument is fallacious. The DVC member is shielded from liability to the member because, even though the DVC member did EVERYTHING they were required a do under the contract, a third party caused the contract to be impossible to fulfill. This is called Force Majeure. In real contracts drawn up for real companies by real attorneys, Force Majeure is covered. Sometimes the contract is dissolved as if it never existed. Sometimes the parties walk away both taking a loss. Sometimes a single party bears the entire damage. In the rather poorly written contracts posted here, there is no Force Majeure. As a result, you have to look at comparative fault and the way the rest of the contract is written.

1. The contract involves a "broker" who collects money from the renter, sends a portion to the owner, and keeps some in a kind of escrow. The broker is actually buying the product from the owner, and selling it to the renter as an intermediary, kind of a middleman who takes control of the product by nature of paying for it and then selling it to someone else.
2. The contracts (all 3 of them) were drafted by the broker. None contain a Force Majeure clause.
3. It is clear that a Force Majeure clause would have been prudent, given previous closures at DVC properties due to Hurricanes and other events.
4. The contracts say "no refunds for any reason". While one could argue that this should not apply because it is unconscionable to agree to pay for something and get nothing in return in the event that the contract could not be fulfilled, it nonetheless is in the agreement.
5. The broker strongly suggested that they obtain travel insurance in case "something happens", because there are "no refunds for any reason".

So, let's talk about comparative negligence...
Was the renter negligent in their performance of the contract? No, they paid.
Was the owner negligent in their performance of the contract? No, they secured the reservation.
Was the broker negligent in their performance of the contract? No, they got paperwork signed, sent along the reservation information, and paid the owner the deposit for the points.

So, let's talk about the damage caused to each party...
The renter has no reservation because the resort is closed. It may be impossible to obtain one when they wish to go. The renter's damage is the amount paid for the reservation.

The owner may have points that are now valueless. When they were rented, they were worth $14.50 each.

The broker was paid for their commission in full, and is still holding a final payment for the owner which may never be sent because the reservation was cancelled by DVC (perhaps wiping away the final payment requirement). There appears to be no economic loss to the broker. Any economic loss to the broker due to credit card charge backs is a potential future loss, not a direct immediate loss.

So, let's circle around to liability...
The renter knew there were no refunds, and was advised to buy "travel insurance". If the renter did buy the wrong kind of insurance, or no insurance, it is on them. One could say that they should not be given a refund (or even a new reservation) because they accepted the risks associated with renting a DVC unit. I think this is a good argument, but unlikely to succeed in court because there is greater liability to be assessed to the broker.

The owner did everything he was supposed to do, suffered an economic loss, and has no control over DVCMC, the Federal Government, the State of Florida, Orange County Florida, Reedy Creek Improvement District, the Walt Disney Company, Local or National News, or any other entity that may have directly or indirectly been involved, advocated for, or encouraged the resort to be closed. Of all three parties, the owner bears the least liability, and could suffer the greatest economic loss.

The broker failed to inform both the renter and owner that circumstances beyond either party's control may prevent the contact from being fulfilled. The broker failed to provide for the contingency of a Force Majeure event despite resort closures previously having occurred at multiple DVC properties. The broker was the purchaser and seller, and indeed is listed as intermediary in the 3 way contract (which the broker drafted and prepared). Because the broker is the buyer of the points (in a separate contract with the owner), and the seller of the reservation (purchased with the points) to the renter, and their contract is at fault, the greatest liability should be borne by the broker under the tenet that incompetent drafting of an agreement cannot be used a defense by the drafting party. i.e., because the broker should have covered every contingency, including the obvious need for a Force Majeure clause, and because they did not, they are ultimately liable for whatever happens. While it may be brutal to consider, the broker is still liable to the owner and the renter for the failure to provide the reservation.

Good luck with that.

 

[Matty B13]

Thank you for the info. I'm very worried about contacting David's since Aulani is still "open" during that time period I'm slated to go, despite the entire island being "shut down" through April 30th. Many other resorts have already shuttered their doors through the end of April. Even if Aulani was open there's now a 14 day mandatory quarantine....can't really afford to spend 3 weeks on a one week vacation. In your opinion should I wait it out a bit longer and see if Aulani extends its closure through the end of April before attempting to call?

I think the sooner you contact David's the better, if you have a willing Owner something might be able to be worked out. I think if your reasonable & flexible you have a good chance of salvaging something.

 

[Sandisw]

You really want the DVC member to be responsible and bear the entire liability, but your simplistic argument is fallacious. The DVC member is shielded from liability to the member because, even though the DVC member did EVERYTHING they were required a do under the contract, a third party caused the contract to be impossible to fulfill. This is called Force Majeure. In real contracts drawn up for real companies by real attorneys, Force Majeure is covered. Sometimes the contract is dissolved as if it never existed. Sometimes the parties walk away both taking a loss. Sometimes a single party bears the entire damage. In the rather poorly written contracts posted here, there is no Force Majeure. As a result, you have to look at comparative fault and the way the rest of the contract is written.

1. The contract involves a "broker" who collects money from the renter, sends a portion to the owner, and keeps some in a kind of escrow. The broker is actually buying the product from the owner, and selling it to the renter as an intermediary, kind of a middleman who takes control of the product by nature of paying for it and then selling it to someone else.
2. The contracts (all 3 of them) were drafted by the broker. None contain a Force Majeure clause.
3. It is clear that a Force Majeure clause would have been prudent, given previous closures at DVC properties due to Hurricanes and other events.
4. The contracts say "no refunds for any reason". While one could argue that this should not apply because it is unconscionable to agree to pay for something and get nothing in return in the event that the contract could not be fulfilled, it nonetheless is in the agreement.
5. The broker strongly suggested that they obtain travel insurance in case "something happens", because there are "no refunds for any reason".

So, let's talk about comparative negligence...
Was the renter negligent in their performance of the contract? No, they paid.
Was the owner negligent in their performance of the contract? No, they secured the reservation.
Was the broker negligent in their performance of the contract? No, they got paperwork signed, sent along the reservation information, and paid the owner the deposit for the points.

So, let's talk about the damage caused to each party...
The renter has no reservation because the resort is closed. It may be impossible to obtain one when they wish to go. The renter's damage is the amount paid for the reservation.

The owner may have points that are now valueless. When they were rented, they were worth $14.50 each.

The broker was paid for their commission in full, and is still holding a final payment for the owner which may never be sent because the reservation was cancelled by DVC (perhaps wiping away the final payment requirement). There appears to be no economic loss to the broker. Any economic loss to the broker due to credit card charge backs is a potential future loss, not a direct immediate loss.

So, let's circle around to liability...
The renter knew there were no refunds, and was advised to buy "travel insurance". If the renter did buy the wrong kind of insurance, or no insurance, it is on them. One could say that they should not be given a refund (or even a new reservation) because they accepted the risks associated with renting a DVC unit. I think this is a good argument, but unlikely to succeed in court because there is greater liability to be assessed to the broker.

The owner did everything he was supposed to do, suffered an economic loss, and has no control over DVCMC, the Federal Government, the State of Florida, Orange County Florida, Reedy Creek Improvement District, the Walt Disney Company, Local or National News, or any other entity that may have directly or indirectly been involved, advocated for, or encouraged the resort to be closed. Of all three parties, the owner bears the least liability, and could suffer the greatest economic loss.

The broker failed to inform both the renter and owner that circumstances beyond either party's control may prevent the contact from being fulfilled. The broker failed to provide for the contingency of a Force Majeure event despite resort closures previously having occurred at multiple DVC properties. The broker was the purchaser and seller, and indeed is listed as intermediary in the 3 way contract (which the broker drafted and prepared). Because the broker is the buyer of the points (in a separate contract with the owner), and the seller of the reservation (purchased with the points) to the renter, and their contract is at fault, the greatest liability should be borne by the broker under the tenet that incompetent drafting of an agreement cannot be used a defense by the drafting party. i.e., because the broker should have covered every contingency, including the obvious need for a Force Majeure clause, and because they did not, they are ultimately liable for whatever happens. While it may be brutal to consider, the broker is still liable to the owner and the renter for the failure to provide the reservation.

Given all this, what are your thoughts on the CC companies for reversing the charge? Do you think that says anything?

 

[ziravan]

Given all this, what are your thoughts on the CC companies for reversing the charge? Do you think that says anything?

I know you didn’t ask me, but I think the owners are going to lose the 30% because they have no control over money they don’t already have.

The brokers are going to lose the CC disputes because they have no control over policies that are stacked against that they nevertheless agreed to in order to take CCs.

And renters that can rebook will mostly be able to do so as most owners who can point-wise will probably try, but that’s a big IF cause everything in the next several months is drying up. Those with CC policies that will allow them to clawback will. Everybody else is screwed.

And every other scenario here will involve attorney fees greater than the current losses.

 

[Sandisw]

I know you didn’t ask me, but I think the owners are going to lose the 30% because they have no control over money they don’t already have.

The brokers are going to lose the CC disputes because they have no control over policies that are stacked against that they nevertheless agreed to in order to take CCs.

And renters that can rebook will mostly be able to do so as most owners who can point-wise will probably try, but that’s a big IF cause everything in the next several months is drying up. Those with CC policies that will allow them to clawback will. Everybody else is screwed.

And every other scenario here will involve attorney fees greater than the current losses.

I read that owners are being denied that. I was just curious if the CC are ruling in the renters favor, does that give more credence to the argument that that contract is void.?

 

[Mickey of the Villages]

They would sue for legal fees and other damages in addition to the unreturned payment. Then they will place a lien on the DVC and force a sale to recover their reward.

Do you really believe people are going to sue over a $1,000 or $2,000? The filing fees and service of process alone will cost $200-$300. I think it is unlikely that anyone other than renters who are themselves lawyers would do this. It sounds sensational but I think it is likely a remote outcome that many folks will sue.

I mean plaintiff files a lawsuit, defendant provides a general denial in their answer, then what discovery? A deposition? Discovery and depositions and court reporters are expensive. For a suit for $1,000 to $2,000 come on. The matter then sits for years because who cares about $1,000 or $2,000 at any real courthouse.

Very few (if any) other than renter-lawyers will sue. IMHO.

 

[Sandisw]

Do you really believe people are going to sue over a $1,000 or $2,000? The filing fees and service of process alone will cost $200-$300. I think it is unlikely that anyone other than renters who are themselves lawyers would do this. It sounds sensational but I think it is likely a remote outcome that many folks will sue.

I mean plaintiff files a lawsuit, defendant provides a general denial in their answer, then what discovery? A deposition? Discovery and depositions and court reporters are expensive. For a suit for $1,000 to $2,000 come on. The matter then sits for years because who cares about $1,000 or $2,000 at any real courthouse.

Very few (if any) other than renter-lawyers will sue. IMHO.

A small claims court action doesn’t take that long and is not thst expensive. But, I don’t think it’s easy to do when owner and renter or broker and owners are in different locations.

So, I agree, lawsuits are not likely. Renters who lose it all simply won’t do it again

 

[Yinn]

Thank you for the info. I'm very worried about contacting David's since Aulani is still "open" during that time period I'm slated to go, despite the entire island being "shut down" through April 30th. Many other resorts have already shuttered their doors through the end of April. Even if Aulani was open there's now a 14 day mandatory quarantine....can't really afford to spend 3 weeks on a one week vacation. In your opinion should I wait it out a bit longer and see if Aulani extends its closure through the end of April before attempting to call?

Contact them anyway. The more heads up the better your chances. As an owner, I contacted them and they told me they haven’t heard from the renter. So we’re both in a wait and see.

I know if the renter reached out today, I’d be able to do something. In a month, I’d be able to do much less.

Reach out proactively IMO.

 

[Alderbrook]

My friend rented thru the DVC rental store and is supposed to arrive April 24. The owner reached out to my friend by getting her email thru the company and they are now trying to work something out privately. She said there are slim pickings tho right now and not sure what she will do. Her husband is diabetic and high risk for COVID19 so she is leery to travel altogether. But she is very happy the owner took to contacting her.

We are timeshare owners but not with Disney. Right now we have our week in HHI rented in Aug. If our resort is closed we will refund the money and open an account with RCI if need be and bank the week. We are Canadian and can’t even travel across the border at the moment so we might not be able to use it either.

 

[wuzzles]

One issue I foresee with CC charge backs is the time limit. A lot of people book at the 7- 11 months in advance to get the best availability. Most credit cards have a time limit on how far out they will allow a dispute.

 

[tallguy001]

A small claims court action doesn’t take that long and is not thst expensive. But, I don’t think it’s easy to do when owner and renter or broker and owners are in different locations.

So, I agree, lawsuits are not likely. Renters who lose it all simply won’t do it again

And what if somebody has a 2 week stay for $8,000 - $10,000? Of course people will sue over that. David will happily hand over owner info so they can be sued directly. Owners who think they can just pocket that money and their points are delusional.

 

[tallguy001]

One issue I foresee with CC charge backs is the time limit. A lot of people book at the 7- 11 months in advance to get the best availability. Most credit cards have a time limit on how far out they will allow a dispute.

This is inaccurate. Time limit is typically 120 days from when the transaction was made OR when the cardholder expected to receive the services.

 

[Sandisw]

And what if somebody has a 2 week stay for $8,000 - $10,000? Of course people will sue over that. David will happily hand over owner info so they can be sued directly. Owners who think they can just pocket that money and their points are delusional.

I was simply stating small claims being a quick option thst wouldn’t include lawyers, but that doing across state lines or different country might not be easy.

Someone who paid that much most likely paid the broker via CC and has the ability to do a chargeback...and win without the need to sue,

 

[Sandisw]

One issue I foresee with CC charge backs is the time limit. A lot of people book at the 7- 11 months in advance to get the best availability. Most credit cards have a time limit on how far out they will allow a dispute.

I don’t know how far in advance the rental was done but obviously some renters have been successful so there has to be some other rules for this,

 

[Krandor]

I don’t know how far in advance the rental was done but obviously some renters have been successful so there has to be some other rules for this,

It is too early for any CC disputes to have done through the whole process. When you dispute banks often temproarily put the funds back on your card immediately but that doesn't mean you've won. They then send the information to the merchent who has I think it is 30 days to reply at which point the bank will make a final decision. So way too early for anybody to have "won" yet.

 

[Yinn]

It is too early for any CC disputes to have done through the whole process. When you dispute banks often temproarily put the funds back on your card immediately but that doesn't mean you've won. They then send the information to the merchent who has I think it is 30 days to reply at which point the bank will make a final decision. So way too early for anybody to have "won" yet.

A lot of those may end up as default wins. I doubt any of the brokers have a fully staffed debt/fraud/collections department. They might be able to handle several, but the larger they are, the longer this goes, the higher chance they have of losing by default.

 

[Krandor]

A lot of those may end up as default wins. I doubt any of the brokers have a fully staffed debt/fraud/collections department. They might be able to handle several, but the larger they are, the longer this goes, the higher chance they have of losing by default.

With the number they are likely to get I agree there is a good chance they may not have the staff to reply to all of them

My only point was somebody who filed a dispute last week who has their money back on the CC today hasn't "won" the dispute just yet.

 

[Sandisw]

It is too early for any CC disputes to have done through the whole process. When you dispute banks often temproarily put the funds back on your card immediately but that doesn't mean you've won. They then send the information to the merchent who has I think it is 30 days to reply at which point the bank will make a final decision. So way too early for anybody to have "won" yet.

I have first hand knowledge that it did and not just it’s in review.

 

[Krandor]

I have first hand knowledge that it did and not just it’s in review.

That is interesting since I thought they had to give the merchant a chance to respond before they could just take back the money.

 

[Sandisw]

That is interesting since I thought they had to give the merchant a chance to respond before they could just take back the money.

Its possible that the merchant knew it would lose and didn’t dispute. This broker has put out information thst they believe the contract is void and there seems to be reports of not paying owners the 30% that was held for reservations during resort closures.