Club management often assumes that once a member resigns, he or she is no longer a member.Â The answer is not always so simple.Â Club membership documents rarely directly answer this question.
Club membership documents often require a resigned member to continue to pay dues after resignation for some period of time, whether it be to the end of the membership year, for 12 or 24 months, or in the case of a refundable membership, until the resigned membership is reissued by the club to a new member.Â The membership documents also often (but not always) permit the resigned member facilities use privileges as long as the member continues to pay dues.Â Some resigned members continue to pay dues even after their dues obligation ceases, with the consent of the club, in order to continue facilities use privileges.
When members vote in an election or vote on a matter, club management and the club board must determine whether resigned members may vote.Â Â Club bylaws often are silent on whether a resigned member who continues to pay dues may vote.Â Â If the membership documents give a resigned dues-paying member “use privileges,” this likely is not sufficient to give the member voting rights.Â However, if the membership documents state that a resigned member has “membership privileges” as long as the member pays dues, then the resigned member has a good argument that he or she has voting rights, not solely facilities use privileges.
A related question is whether a resigned membership is outstanding for purposes of a membership cap or determination of how many memberships have been issued.Â In the case of a refundable membership, a membership once issued, is always outstanding, because it counts as a membership for purposes of the membership cap.Â Therefore, a resigned membership is outstanding for such purpose even if the member has no membership privileges.Â Â In the case of a nonrefundable membership, the club probably should not count a resigned non-dues paying membership as outstanding, because it gets “turned back” to the club.
Even though club management and active club members often do not consider resigned members to be real members, the resigned members’ status and the treatment of resigned memberships often depend on review of club membership documents and whether the membership is refundable.
Glenn A. Gerena, a shareholder with the national law firm of Greenberg Traurig, P.A., concentrates his practice on structuring, documentation for, and restructuring club membership programs. Â You can read more about the author at http://www.gtlaw.com/People/GlennAGerena, and read more club related articles by the author at http://www.hospitalitylawcheckin.com.
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