If you paid an initiation fee to join a golf club, you may be eligible for a refund depending on the club’s documents and the conduct of the club.
Even when refunds are due, golf clubs sometimes try to find ways not to pay them, especially when the club is owned by investors rather than the members. When this happens, current and former members may need to take legal action to receive the funds due.
The rise of refundable fees among golf courses
In the last several decades, many golf course developers relied on a system of refundable deposits or fees by members to provide working capital. The setup offered instant funding for the courses, acting like an interest-free loan. However, many members have been disappointed by the resistance of the golf clubs to issue a refund as promised when they joined the club.
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Which types of golf club fees are refundable?
Golf club members are often charged several types of fees at the start and throughout the membership.
Initiation fees – A one-time fee, known as an initiation fee or deposit, often in the tens of thousands of dollars, is usually refundable upon resignation or death of the membrer, depending on the terms of the membership agreement.
Membership dues – Non-refundable monthly or annual dues may be charged based on the membership type (for example, corporate, family, or individual). The membership dues usually entitle the member to use the facilities throughout the year while other amenities may be extra.
Miscellaneous costs – Members may have to pay other expenses, from cart and locker room rental to food and beverage minimums, and even assessments for income shortfalls, as a condition of membership. Like membership dues, these expenses are generally not refundable.
Conditions for Initiation Fee Refunds
There is no set standard for initiation fee refunds. They usually depend on the documents that control the membership terms. The first place to look is the membership agreement that the member signed when joining the club. The club’s governing documents, like the membership plan, may also contain relevant terms.
A sample of the terms that some clubs offer include:
- Full or partial refund upon resignation at 30 years from the date of membership;
- Refund if a minimum number of members have joined the club; or
- Refund after a certain number of new members join, for example, one refund paid for every three new members who join.
Complicating matters, some clubs have changed their policies, sometimes contrary to the membership agreement or oral commitments, to postpone the time it takes for a resigning member to be entitled to payment. Others have not followed the terms of the controlling agreements, indefinitely delaying payments or only providing partial refunds.
Fight to enforce club membership redemption rights
Many club members who have been short-changed when seeking an initiation fee refund have filed lawsuits. Several cases have been filed and many are in early stages, but in an Illinois case, a golf club was ordered to pay $700,000 in ex-members’ fees. The State of California has even filed a class-action lawsuit on behalf of its residents who have lost their fees.
KGG Law and Dowd Law have filed several cases to recover initiation fees and membership deposits paid by current or former members and continue to investigate claims of unfair treatment of current or former golf club members owed refunds of membership deposits or and initiation fees. If you are currently experiencing such a situation, contact us today. You may qualify to participate in developing golf litigation.