Often, a club management agreement reads exactly like a hotel management agreement, with the word “hotel” changed to “club.” This should not be the case. Clubs have unique characteristics that should be considered in drafting a club management agreement.

1. If the club is a member-owned club, it is not a profit-seeking business. As a result, the management fee structure would not have a profit based incentive fee, but could have an incentive fee tied to membership sales and retention or members’ satisfaction.


Continue Reading Difference Between Club and Hotel Management Agreements

Clubs that resell resigned memberships generally have separate “sell lists” for each membership category. Therefore, if a club sells memberships in a different membership category, those sales do not trigger resales of resigned memberships and the corresponding refund payments to the resigned members. When clubs issue memberships in “new” categories, the question arises as to whether the new category is truly a different membership category. In two separate cases (one decided in August 2011 and the other in January 2014), resigned members of Hamilton Farms Golf Club challenged the club’s determination that membership sales in what the club called a new membership category did not count toward reissuing resigned memberships. In both cases, the club moved to dismiss the cases, and the court denied the motions, allowing the cases to proceed.


Continue Reading Resigned Members: It’s the Same Category

Warrender vs. Gull Harbor Yacht Club, Court of Appeals of North Carolina (August 6, 2013)

This decision illustrates the importance of reviewing and considering the impact of restrictive covenants on operations of a club or marina before acquiring or restructuring it.  The Court ruled on a number of issues related to the restrictive covenants in a residential community in litigation between the yacht club in the community and the lot owners.  Two issues in particular were crucial to the yacht club structure and operations.


Continue Reading Case Law Update: Community Covenants’ Impact on Club Operations