Words: Ashley Rigg
Published: 24th September 2009
Florida: Golf contract clause scuppers developer
Bonita Bay, one of the leading developers in Naples, Florida is on the brink of bankruptcy due to a clause its contracts offering buyers a refund on their golf memberships.
In the nineties and early noughties, the company launched seven luxury communities where houses sold for up to $12 million and came with access to exclusive golf clubs with restaurants, tennis courts and pools. Its homeowner's include some high-profile US celebrities.
Many members now want to quit the golf clubs and claim back their deposits, which are up to $185,000 per member, in a bid to economize in the recession. The buyers' contracts state that the deposits are refundable on demand. However the contracts also say the contract "may be amended from time to time." (creating a big payday for lawyers!)
At least 15 lawsuits have already been filed against Bonita Bay and it claims it cannot afford to repay the money and will be forced into
liquidation if is has do so.
The Florida attorney general is investigating Bonita Bay to see whether the way it sold and refunded membership deposits was a Ponzi scheme.
Full story on
Wall Street Journal
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