Private Country Club - I want out!

[Gunni]

Has anyone had any experience challenging a "Equity" Membership at a Private Club? Situation is that in selling your membership you are to continue paying monthly dues and food minimums until your membership sells. I just want to walk away? They did have you sign a paper that you agreed to do so. It was a condition of selling the memberhip.

 

[thefed]

good luck?

 

[Gunni]

I know...

....I'm challenging the legality of it with the State. I'm talking with the Club's Membership Committee and Board Of Directors. I've suggested a buy out clause and a hardship clause be added to the Bylaws.

 

[Meadbh]

Not being one of the Country Club set, I wouldn't know!

 

[Dawg52]

My club you can get out, you just don't get any upfront money back. Not much involved anyway. I belong to a cheap club.

 

[haha]

Has anyone had any experience challenging a "Equity" Membership at a Private Club? Situation is that in selling your membership you are to continue paying monthly dues and food minimums until your membership sells. I just want to walk away? They did have you sign a paper that you agreed to do so. It was a condition of selling the memberhip.

This provision makes sense to me. Not only from the POV that you signed onto it when you still wanted the benfits of club membership, but also because it is parallel to similar provisions on condominium associations, HOAs, and residential co-ops. There are certain more of less fixed expenses to be met, there are a fixed or closely controlled number of memberships. Expenses divided by memberships ~= dues.

I suppose you could just stop paying, and let them take you to court.

Ha

 

[saluki9]

I've seen some clients walk away based on a hardship argument. We've gotten releases from the club agreeing not to seek any judgements. Obviously there is no recovery of thr equity

The easiest way is to ask.

 

[Rich_by_the_Bay]

I'm sorry that you are caught in that situation but it does sound like you signed a contract and are legally and morally obligated to fulfill its terms. If you just walk, they might make your life miserable - collection proceedings, credit problems, small claims court, etc.

Are you unable to make the payments til it sells, or just don't want to? If the latter applies I would just bite the bullet, make the payments, and consider it a lesson learned.

 

[jblack]

the club in our golf club neighborhood went thru a lot of this over the past 5-10 years. 40+ year old club with 2 courses had sloppy management and botched so many things that new member recruiting dried up and older members were simply getting too old to continue using (or could afford in the early 2000s recession). that combined with increasing competition led to the club charging all members a series of $1000 assessments and many people simply walked away from their memberships to avoid it. and of course that exacerbated the budgetary problem...

anyways, i'm sure every club agreement is different but these folks only had the downside of losing their equity share originally purchased as a worst case. since the club had knocked down the initiation fee of the share to $1000-2000 over the recent years there was little investment to reclaim so most people leaving simply wrote it off.

fortunately this place had a white knight come in (Arnold Palmer Golf Mgmt) to turn around the place and things are now on a strong upswing. not sure what the new membership agreement is exactly but i do know they wrote in that there would be no future assessments.

 

[chinaco]

Sounds like a contractual obligation. Chalk it up to a lesson learned. Do not enter into a long-term contract if you are not prepared (or want) to deal with it. Your personal problems are just that... your personal problems (to the other party).

They may not go through the expense of suing you. They may just make the membership null and void or make the person that purchases the membership pay back expenses. If they really wanted to stick it to you... they would sell you off to a collection agency!

If you are trying to sell it.. I would think you would want the membership to be in good standing so you will probably have to hold up your end of the bargain. I (personally) would not buy anything that was somehow clouded with other debt obligations. I would not want the hassle (or perceived hassle).

Can you cut the price of the membership to find a quick buyer. If not, you could talk to the club about forfeiting your equity stake to be released from the contract.

How much money is at stake? What is your equity worth and what are the membership fees?


You have to look at it this way: No individual party is going to want to take the full loss... but they may be willing to negotiate (half a loaf is better than none).

 

[FIRE'd@51]

I have never heard of a country club that doesn't allow you to resign your membership (what if you move away?), although there is no guarantee that you will get your "equity" back quickly if you do so. At my club, if you resign (or even die), you (or your estate) go(es) on a waiting list to get your equity back, since a new member's initiation fee (or part of it) is paying back that equity. Of course, once you resign you have no further dues obligation.

 

[Gunni]

Thanks all. The way it works is that there is a Certificate base price. When I joined it was $9,500 It is currently $10,500 On the 25th of this month my proposal to revise the By-Laws to add a "Hardship Clause" that would allow Members to walk away. I'm hoping the Club is reasonable. With 20+ Members wanting to sell, the Board Of Directors will hopefully get a clue. A high end Club in our area just initiated a "non-equity" clasification catagory due to loss of memberships. Its a tough economy, I knew what I was getting into, so we will see if reasonable minds can find a "equitable solution" ( no pun intended)

 

[FIRE'd@51]

Thanks all. The way it works is that there is a Certificate base price. When I joined it was $9,500 It is currently $10,500

If you don't mind, would you elaborate on this, because I am curious about how the logistics actually work. Do you sell your membership directly to another individual for a minimum of $10,500, or is it "sold" through the club? Presumably the Admissions Committee would have to approve the incoming candidate. Finally, what are the dues you would save by walking away?

 

[Gunni]

Dues are dependent on your membership level. If you have a golfing spouse an additional 74.00 a month on top of the 375.00 so $469.00 a month. Plus a quarterly food minimum of 135.00 You can't walk away, you must declare your selling, then based on what you want above the $10,500 certificate price you list your membership. Anything above the $10,500 you get. People who want out fast sell for the 10,500 Order of sale is based on the listing date or revised price date. Until it sells your required to pay the monthly dues and food minimum no matter where you are living.