Buying a home in Indian Wells often comes with a big decision: should you join an equity club or a non-equity club? The choice affects your costs, your influence over the club’s future, and how easily your membership can transfer when you sell. If you want to avoid surprises and make a smart move, you need a clear, local lens on how these memberships work. This guide breaks down the key differences, Indian Wells market nuances, and the exact steps to take before you commit. Let’s dive in.
Equity vs non-equity, in plain English
Equity membership gives you an ownership interest in the club organization. You typically elect the board, vote on big decisions, and may receive a refund of part of your initiation fee when your membership transfers, depending on bylaws and market conditions. You also share in responsibility for major projects if reserves fall short, which can mean member assessments.
Non-equity membership is access without ownership. A company or developer owns and runs the club. You get the amenities per your contract, but you usually have limited or no voting rights. Upfront fees may be lower and refunds on exit are uncommon. The operator controls big decisions, which can include fee changes or a sale of the club.
Why it matters: the membership type shapes your cash needs, predictability of future costs, your voice in club governance, and the ease of transferring or reselling your membership when you sell your home.
How membership type affects your purchase
Upfront and ongoing costs
- Equity clubs often have higher initiation fees. Some offer partial or refundable amounts at transfer per their bylaws.
- Non-equity clubs may have lower initiation fees, but refunds are rare. The operator sets pricing and terms.
- In both cases, plan for monthly or annual dues, food and beverage minimums, cart and guest fees, and event charges.
Governance and control
- Equity members usually vote on budgets, board elections, bylaws, and major capital projects. You can expect more visibility into financial statements and reserve planning.
- Non-equity members generally do not vote on operations. Transparency varies and is at the operator’s discretion.
- In California, many equity clubs are set up as nonprofit mutual benefit corporations with defined member rights. Confirm the corporate form and your voting rights before you join.
Capital projects and assessments
- Equity clubs aim to fund reserves through dues and planned capital budgets. If reserves are short, members can be assessed to cover renovations or replacements.
- Non-equity clubs decide capital improvements and timing. The owner may invest, defer projects, raise fees, or even sell the facility. Member influence is limited.
Transfer rules and resale value
- Equity memberships may be transferable and can include a refund component under specific rules. Transfers often require club approval, fees, and timelines that affect escrow.
- Non-equity memberships are often non-transferable. A buyer usually applies for a new membership, subject to operator approval and current pricing.
- If your property requires membership, or includes one, buyers will factor ongoing costs, transfer terms, and future risk when making offers.
Indian Wells market nuances
Seasonal demand and events
Indian Wells is a luxury, amenity-rich market with strong golf and tennis demand. Seasonal residents and major events, including the BNP Paribas Open, create a steady appetite for flexible access. This can push some buyers toward non-equity or social options that offer quick entry without long-term commitments.
Buyer profiles and what fits
- Full-time residents often value equity clubs for long-term stability, governance input, and community continuity.
- Second-home and seasonal owners frequently prefer non-equity or flexible social memberships that match shorter stays.
- Younger buyers or relocating professionals may prioritize amenity access over ownership and lean toward non-equity options.
Due diligence checklist before you join
Use this list during escrow or while comparing clubs:
- Get the club’s bylaws, articles, membership agreement, and rules.
- Confirm membership class options, voting rights, and transfer rules.
- Request recent audited financials, budgets, and any reserve studies.
- Ask about current dues, several years of dues history, and typical increases.
- Identify any recent or planned special assessments and the club’s capital plan.
- Check whether membership is mandatory via your property’s deed or CC&Rs.
- Verify initiation fees, refund policies, transfer fees, and any waiting list.
- Confirm application steps, background checks, interviews, and expected approval timelines.
Negotiation and escrow tips
- Make club approval and membership terms a contingency if access is essential to your purchase.
- Negotiate who pays transfer fees and how dues or food and beverage minimums will be prorated at closing.
- If initiation fees are large, ask for credits or concessions to offset first-year costs.
- Align your closing date with membership approval timelines to avoid gaps in access.
- For complex membership obligations tied to the property, consider a legal review of the membership agreement and CC&Rs.
Ask the club before you commit
Bring this quick list to your tour or interview:
- What is the exact initiation fee and is any portion refundable at transfer?
- What are current dues and typical annual increases over the past few years?
- Are there recent reserve studies and a capital improvement plan I can review?
- Are there any planned special assessments in the next 24 months?
- What are the transfer fees, approval steps, and expected timelines?
- Is there a waiting list or membership cap, and how does it affect new members?
- What is included with my membership class, including guest policies and access windows?
- Are memberships mandatory for homeowners in this community, and where is that recorded?
For sellers: position your membership
- Disclose membership type clearly and provide current dues, transfer rules, and any refund terms.
- If you have an equity membership with a refund component, highlight it as a tangible benefit.
- Coordinate early with club staff to confirm transfer steps and timeline for buyer approval.
- Provide buyers with a first-year cost estimate that includes initiation, dues, and typical fees.
- If membership is mandatory, guide buyers to the recorded CC&Rs and the club’s official documents.
Putting it together: which path fits you?
- Choose equity if you want a long-term stake, voting rights, and potential refund potential at transfer. Be comfortable with assessment risk.
- Choose non-equity if you want lower commitment, faster access, and operator-managed facilities. Accept that you have limited control and refunds are rare.
- In Indian Wells, match your choice to how you will use the home. Full-time use and a focus on community often align with equity. Seasonal or flexible use often aligns with non-equity.
Ready to compare options around your target properties and run your true cost of ownership? Reach out for aligned guidance and a streamlined process with the Mark Wise Group.
FAQs
What is the core difference between equity and non-equity memberships?
- Equity means member ownership with voting rights and potential refunds at transfer per bylaws. Non-equity is operator-owned access with limited governance rights and typically no refunds.
How do equity and non-equity clubs handle big renovations or capital projects?
- Equity clubs may use reserves or assess members if reserves fall short. Non-equity operators decide timing and funding, which can include fee changes or deferred projects.
How do memberships transfer when I buy or sell a home in Indian Wells?
- Equity transfers usually need club approval, fees, and specific steps set in bylaws. Non-equity memberships are often non-transferable, so buyers apply for a new membership.
Are memberships ever mandatory with a property purchase?
- Yes, some communities tie membership to ownership through recorded CC&Rs. Always check deed and title documents early in the process.
What documents should I review before joining a club linked to a home?
- Ask for bylaws, membership agreements, rules, recent financials, reserve studies, dues history, transfer policies, and any assessment disclosures.
