Worse than an HOA - Mandatory Social Club

Started by JudyM9 • 10 replies • 1583 views

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JudyM9 (Arizona)
Posts: 46

Posted:

I'm interested in hearing from anyone who has experience with a Mandatory Social Club. Our community in North Scottsdale, Arizona has a pretty well run HOA, but we also pay for a separately incorporated Country Club which is organized as a Mandatory Social Club, 501(c)7. In the Country Club we have almost no laws to protect us. We have the right to vote on a change to the bylaws and a right recall the board. That's about it.

There is a long story here, which I'll share, but right now I'd like to hear from others dealing with a Mandatory Social Club.

JudyM9 (Arizona)
Posts: 46

Posted:

As far as I can find, Mandatory Social Clubs exist in Florida and Arizona. They seem to be prevalent in communities built by Del Webb.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

I have seen one where the HOA owned the golf course and all HOA Members were mandatory Social Members (dining room minimum monthly spending) but the Golf Membership was at an optional cost. The club also had non-owner memberships.

JudyM9 (Arizona)
Posts: 46

Posted:

Was that in South Carolina?

We have mandatory clubhouse dues, no restaurant minimum and no outside members. It is operated at a huge annual loss.

FredS7 (Arizona)
Posts: 927

Posted:

> In the Country Club we have almost no laws to protect us.

What exactly do you want to be protected against? Shunning? Men without ties?

Seriously- the concern I would have about being associated with a golf course, etc. is financial. Especially since many golf courses appear to be financially challenged these days.

JudyM9 (Arizona)
Posts: 46

Posted:

We have no right to vote on anything except a change in the bylaws. We have no protection from a board of directors determined to spend and spend and spend.

Technically, we have the right to vote on dues increases of more than 20% and on assessments, but our board has the ability to bypass all of that by just borrowing money and putting the community into debt. They have no need to ever raise dues more than 20% or have an assessment because they can just use our credit without asking.

Our golf course is owned by a subset of the members in a separate corporation. They have become very secretive and control our CC board. Even their golf board of directors is only known to us by lookup on the Arizona Corporation Commission website. They claim to have no financial worries whatsoever, forgetting of course that their tax returns are public record.

BTW - I encourage everyone to look up their own clubs and HOAs on one of the 990 lookup sites. One such site: http://990finder.foundationcenter.org/Default.aspx

Men with ties? Good one. Come to our club, where women can wear hats, but men cannot. Where the tennis players can't come eat in the restaurant after a match unless they go home first and change into "golf attire".

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Judy

Typically in a golf club, only the full privilege members (usually the golfing members) will have voting rights. The rest of the membership (tennis, swim, social, etc.) are along for the ride. Even in your situation of a mandatory social membership in the club for the HOA Members, they get no vote. Same as it was in my club in MA. Only the full privilege golfing members got the right to vote and then they had to pay extra to become a voting member.

I know you do not like it, but that type set up is quite common.

There is a symbiotic relationship between the golfers and non-golfers and generally the issues are raised by the non-golfers as they feel they are over paying for what they get, being kept in the dark, not respected, etc. Again, quite typical in that arrangement. That is why after experiencing it twice, I now keep my HOA and my golf club as separate entity's.

JanetB2 (Colorado)
Posts: 4,219

Posted:

Do they sell liquor at the Club?

JanetB2 (Colorado)
Posts: 4,219

Posted:

Here is some info:

IRS. https://www.irs.gov/charities-non-profits/other-non-profits/social-clubs

AZ Clubs regarding liquor: https://www.azliquor.gov/series14.cfm (This lists in the info various statutes which would apply).

Interesting article written by College professors in FL regarding Mandatory Social Private Clubs: http://www.aabri.com/manuscripts/121431.pdf

JudyM9 (Arizona)
Posts: 46

Posted:

Actually, the Golf members here have their own completely separate corporation which leases 1/3 of the clubhouse for $1 a year. They get board positions on the Country Club board as well and have chosen only golf members to control 100% of the finance committee. They also have outside members who use our clubhouse for free.

I've not found another club organized this way.

JudyM9 (Arizona)
Posts: 46

Posted:

Janet. The information you shared is very helpful.

The article from the University of Tampa is spot on.

Thanks

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