When Greg Evans resigned his membership at Carmel’s Woodland Country Club in July, he expected to soon be refunded more than $6,000 he paid for ownership certificates when he joined the club more than 20 years ago. Instead, he learned that it could be a decade or more until he receives the funds, which, according to an attorney who specializes in private clubs, isn’t unusual for organizations that have used this model.
The club discontinued issuing these types of optional ownership certificates, which helped fund major projects and purchases, soon after Evans joined. After resigning, Evans discovered he was No. 198 in line to get his money back. He said he was originally given the impression he’d receive his refund at the time of his resignation and was shocked to learn that those near the front of the waiting list had been on it for more than 12 years. He said the situation “smells to high heaven.”
“There’s something wrong there, big time,” Evans said. “They’ve had that club full where there’s a waiting list to get in for over five years now.”
Tim Miller, who serves in a volunteer capacity as president of the club, said each year the board decides how many certificates to refund based on available cash flow at the time. He said the process is outlined by the club’s bylaws, which he declined to provide.
“It’s a very strict process, and we never vary from it,” Miller said. “It doesn’t matter if you’re 97 years old and you retire today, you’re the last person to resign from the club, you go in that line.”
Miller, who said Evans is the only former club member to raise concerns about the refund process during his tenure as president, said he wasn’t sure how long former club members had been on the refund waiting list. But another former club member, who doesn’t believe anything “underhanded” is going on, confirmed he had been waiting for more than 13 years.
According to Fred Somers, an Atlanta-based attorney whose specialties include advising private clubs, it’s not unusual for former club members to be disappointed by the process of receiving a refund.
“There is no ‘normal’ to these refund schemes,” Somers said. “The ‘waiting periods’ vary, depending on the terms of the certificate, the plan, bylaws, resolution adopting their issuance, the club’s financial condition at the time certificates are presented for refund and the good faith of the club management and board.”
Somers also said that it’s not an “anomaly” to wait more than a decade for a refund.
“There are clubs whose refundable certificates are never to be refunded because the refund conditions will likely never be realized,” he said.
Woodland Country Club phased out the ownership certificate model in the early 2000s, and since then it has issued assessments to cover major project costs, Miller said. Now, all club members are issued a $500 ownership certificate when they join, and after leaving the club that amount is refunded once a new member joins.