Say you purchase a brand-new $3 million house adjacent to a golf course in a luxury country-club development. The developer requires all house purchasers to buy country club memberships for $175,000. You comply, relying on a clause of the club membership agreement that obligates the club to reimburse the membership acquisition fee in full, in cash, without interest, within 30 days of a member’s written notice that it intends to terminate its membership. The club membership agreement also contains a clause that allows the club to change the agreement’s terms at any time.
A few years go by, during which real estate values fall by 50%. A number of the development’s unsold houses remain on the market at reduced prices and club membership is below projections, causing the club to raise annual member dues to cover operating expenses. You did not bargain for this mess and want to quit the club and sell your house. A year ago the club’s board changed the terms of the membership agreement to provide that the club will reimburse membership acquisition fees only if the club acquires three new members for each member who leaves, and then only by paying 10% of the fee in cash and the balance by an interest-only promissory note maturing in five years. The board complied with all of the membership agreement’s procedural requirements when changing these terms. You notify the club’s board that you are quitting the club, intend to sell your house, and expect repayment of your $175,000 membership acquisition fee in cash within 30 days, as required by the membership agreement terms in effect at your time of purchase. In response the board says it will reimburse your acquisition fee in accordance with the new terms.
What are your rights?