| There is a rumor that legislation is being considered that might prohibit private clubs in residential communities from collecting mandatory club membership fees. Is the rumor true? |
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The bill as originally proposed included several exceptions to the definition of "transfer fee covenants," including an exception that exempted property owner's association fees. However, the original bill would have posed a real problem for mandatory club membership fees since there was no exemption for the payment of mandatory fees that each subsequent property owner must pay for membership in a club that is a for profit entity, such as a non-equity club.
After some uproar from the real estate community, an amendment to the bill was proposed and incorporated into the text of the bill. The amendment was designed to exempt the payment of mandatory club fees from the definition of "transfer fee covenants."
For more information please contact Cynthia Spall.
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