Members' Tenants - In or Out?
Thursday, September 20, 2012

Should a club allow a member’s long-term tenant to use the member's membership? The answer depends on the type of club. A truly private club would not allow a member's tenant to use the member's membership. Not only would such access diminish the exclusivity of the club, but club members often believe that tenants do not care for the facilities as well as members do. On the other hand, a club in a residential community that allows some non-member use of the facilities may want to allow members' tenants to use the facilities as a benefit for members who rent their homes and to generate revenue for the club. Without such a provision, a member who rents his or her home would otherwise resign, and the club would lose the corresponding dues and food and beverage and pro shop spending revenue for the membership.

The typical member tenant provision requires the member to continue to be responsible for the annual dues, but does not allow the member to use the membership during the period that the tenant has facilities use privileges. This allows the club to keep the club/member relationship without increasing the number of users, so as not to tax the facilities.

A few clubs allow both the member to continue use privileges and the tenant to use the facilities upon payment of additional dues by the tenant. This provision may be appropriate for a resort or semi-private club where exclusivity and membership limits are not important. It allows the club to double the dues revenue and have more food and beverage and pro shop spending revenue associated with the membership. Such provision also benefits the area resident who purchases the home in the community as an investment.

Any member tenant facilities use provision should not be more expansive than the rental restrictions in the community documents. The tenant should also be required to complete an application in which the tenant acknowledges receipt of and agrees to be bound by the club's rules.

For a club that is not purely private and exclusive, a carefully worded member tenant facilities use provision tailored to the type of community can help ensure that the tenants' facilities use enhances club revenue without being detrimental to members’ club experience.

 

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