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Florida Condo & HOA Legal Blog News & Updates on Condo & HOA Laws & Legislation in the State of Florida

Mandatory Country Club Memberships May Not be Mandatory After All …

Posted in Arbitration & Court Rulings

Fourth District Court of Appeal Affirms Ruling Invalidating Amendments to Master Declaration of Covenants, Conditions and Restrictions Governing the Ironhorse Community.  With the economy the way it is, country clubs are losing members while costs continue to rise.   The costs associated with maintaining and operating a golf course and related club facilities, including the clubhouse, restaurant, etc., as well as the staff salaries and administrative expenses are enormous.  Over the past several years country clubs have relied on homeowners in the community(ies) to fund these expenses. While all owners are automatically members of the homeowners association, typically membership in the county club was not mandatory. The Declarations of Covenants and Restrictions frequently made membership voluntary.  In order to capture new memberships (and additional sources of revenue) several communities amended their governing documents to require all homeowners to join the country club (with the attendant responsibility to pay dues, initiation fees, restaurant charges, etc.).  Others adopted amendments require all new purchasers to join the club. Many of these amendments resulted in litigation.  The Hamlet community reportedly resolved several lawsuits by waiving membership requirements and fees for homeowners that participated in the lawsuit.  Similar settlements were reached in connection with a case against the Willoughby Golf Club after the trial court ruled that the amendments were invalid. Appeals were pending in two other cases involving challenges to amendments creating mandatory memberships – that is until the court affirmed the ruling in the Ironhorse case this week. The trial court ruling in the Ironhorse case found that amendments imposing mandatory membership in the club, the levy of membership fees and dues were invalid and unenforceable. It said:

[Homeowners] who had once justifiably relied upon the recorded covenants and restrictions, were now required to obtain membership and pay more dues and fees in the form of common assessments to Association, originally set at $2,500.

The Court also found:

An amendment, or a covenant … is unreasonable as a matter of law if it destroys or substantially impairs the scheme of the development.  Since this Court hereby finds that mandatory membership in the Club destroys and impairs the scheme of the Ironhorse community as originally intended by the developer and relied upon by the [homeowners], then no question need be reserved for the trier of fact.  While the developer may have has its best intentions in providing for amenities and recreational facilities, such considerations must not, and should not, trump an individual’s right to rely on previously recorded documents and promises as was done here.

A Motion for Reconsideration and Rehearing of a Final Judgment entered against the Aberdeen Property Owners Association, Inc. is still pending.  In that case a sub-association (Bristol Lakes) challenged an amendment requiring new purchasers of homes to join the country club.  Aberdeen sought to disqualify the trial court judge after entry of the Final Judgment and recently obtained that relief from the appellate court. The Ironhorse ruling creates questions about the enforceability of amendments adopted by other communities.  These amendments (and actions taken as a result of the amendments) may become a source of potential exposure to liability.  I encourage community leaders to undertake a comprehensive analysis of potential claims with Association counsel.  Perhaps a second opinion from ‘fresh eyes’ is worthwhile as well. We will report on the Aberdeen case when more information becomes available – as well as any developments in the Ironhorse case.  Although the Fourth DCA issued its ruling, there are still opportunities for rehearing and/or other actions.

  • Roger-Pierre Girard

    Does anyone have more information about Mandatory membership in Aberdeen Country Club, We are planing in buying there, but concerned about the mandatory fees.
    RESPONSE: You should receive a property disclosure form from the seller/realtor under Section 720.401, F.S. If you haven’t – ask for one.

  • John Bonar

    We belong to a country club and they are stating that all new homeowners will have to be members of the club. Is that true? what section of FL law code prohibits this?
    RESPONSE: We’ve included the analysis of several cases that involved converting a voluntary club to a mandatory membership club. 2010 changes to Chapter 720, Florida Statutes provide a basis for a membership vote regarding this and related issues. There are still many pending lawsuits challenging mandatory memberships, although the Aberdeen case was settled after the last appeal.

  • Eric

    Apparently the 2010 Florida legislature in 720.31(6) has reversed the result reached in Ironhorse and would allow the retroactive imposition of mandatory membership if 75% of the community votes in favor of mandatory membership.
    Since most communities with this question likely have more than 75% of residents with existing memberships at some level, approval would seem assured. Many of these nonmembers initially based their financial home purchase on not having to be members. It’s beyond dispute that many of those that could be affected by 720.31(6) can not afford the existing dues much less often hefty initiation fees. Foreclosure or forced sales could realistically follow.
    I believe that it might be reasonable to change the membership rules for new purchasers. However, it seems unconscionable to force residents who bought under different assurances and are often retired on fixed incomes into these circumstances. Even if the legislature has chosen to ignore the reasoning in Ironhorse, 720.31(6) would seem to raise constitutional issues based on due process or contract.
    The concerns raised by 720.31(6) have been more persuasively discussed in a Palm Beach article. http://www.palmbeachpost.com/money/real-estate/hoas-right-to-acquire-property-a-law-born-1314132.html
    It seems to me that the editor of that article essentially responds to the concerns raised by 720.31(6) by stating that the legislature thought it is more important to protect the open space view (of a golf course) and lifestyle that the members had bought into (with knowledge that membership was voluntary)(than presumably forcing nonmembers from the community).