Contract Changes By New Owner

[Banjo Bob]

What is the name of your state? Arizona
I belong to a private golf club. Several months ago the new owner raised membership dues by 100% and instituted a food minimum of $1000 per year at a near-by public restaurant. Original members were not given the option of resigning and are being forced to pay monthly dues and food minimums while $15,000 membership deposits (not refundable until the membership is sold) are being retained by the new owner. The new owner is enforcing the resignation procedures in the original contract, which require any member desiring to resign to put their name on a resignation list and pay dues until four new members join for every old member wishing to resign. For example, I am 7th on the resignation list, so 24 new memberships must be sold (the 6 people ahead of me times 4) before I am allowed to resign and receive a refund of my deposit. During the initial four months of new ownership, no new memberships have been sold, in part because the deposit, monthly fees and facilities available are way out of line with comparable clubs in the Tucson area.
Questions: Is a private club allowed to charge a food minimum at a public restaurant? Can new ownership force original members to remain members against their will when the cost of the membership is radically changed in a way that is grossly disproportinate to what comparable facilities in the area charge? If there is no reasonable expection of attracting new members because of the cost compared to other facilities in the area, and resignation is conditional based on attracting four new members for every original member allowed to resign, can the new owner force original members to remain members indefinitedly against their will?

 

[Some Random Guy]

What does the original contract say about changes? What does your lawyer say? This is a significant amount of money, talk to an attorney.

 

[Banjo Bob]

Original Contract Terms

(Arizona) The original contract states that "dues, charges and fees will be established by the Club in its sole discretion." It seems to me that the primary legal issue is whether or not the new owner is acting in "good faith." If a member can resign only if a large number of new memberships are sold, and nobody is buying new memberships because the price is too high and the facilities are substandard compared to other clubs, is that a breach of good faith?

 

[ancel41]

same/similar problem

missouri:>>>>interesting problem....i heard a man quote case law yesterday that pertains to contracts: neal vs. corporate trustees inc., 1964.....paraphrase: there is no contract if there is not complete understanding between parties, ie., no doubt or difference of understanding.

so, if you did not understand the potential of aspects of the contract there is no contract...but, since you gave them the money, dues, those may be difficult to recover....but, if there was no contract, the acceptance of the dues may be
illegal....the terms of contract, which does not exsist, may be considered as onerous upon you..... and the actions of the new owners might be considered as extortion.....interesting !

sounds like you need a good lawyer!

have you looked at a class action?

please let me know what you do and how it is progressing!!!

 

[Banjo Bob]

Understanding Between Parties

There is no dispute about either party understanding the contract and no dispute about monies already paid in dues and fees. The question is how to get out of the contract and retrieve the $15K deposit in a reasonable amount of time. There are at least 10-15 other club members also desiring a return of deposits but there doesn't seem to be much energy for class action since three years ago there was a difficult though successful class action law suit brought against a previous owner for raising dues in retaliation for a dispute with members. I see two specific issues here: Can the owner of a private club require members to pay a monthly food minimum at a public restaurant where access is difficult because members must compete with the general public? The other issue is whether or not a private club can indefinitely retain a deposit when there is no reasonable expectation that a member desiring to resign will ever get his deposit back because conditions set by the owner (4 new memberships must be sold for every old member allowed to resign) cannot be met due to the owner-controlled unattractiveness of conditions for new members.