Brusher v. Bay Harbor Yacht Club: What Michigan Condo Boards Need to Know About Mandatory Membership
When you purchase property in a master-planned resort community, it’s easy to assume that all amenities such as yacht clubs, golf courses, or clubhouses are simply part of the package. But what happens when the fine print in your master deed obligates you to become a member of a private club, and then that club changes?
That’s exactly what happened in the case of Brusher v. Bay Harbor Yacht Club. This unpublished 2004 Michigan Court of Appeals decision clarified the rights of condominium owners when a private membership structure changes midstream, and it serves as a cautionary tale about transparency, governance, and the limits of majority rule.
Whether you’re a developer designing a resort community, a board member navigating an association’s relationship with a club, or a unit owner reviewing your rights, this case offers critical takeaways.
What Happened in Brusher v. Bay Harbor Yacht Club?
Bay Harbor is a luxury resort community in Northern Michigan, known for its sweeping Lake Michigan views, multimillion-dollar homes, and exclusive amenities. Among those amenities was the Bay Harbor Yacht Club, a private facility tied to condominium ownership within the community.
Initially, membership in the yacht club was mandatory for early purchasers. However, this obligation came with an expected benefit: equity ownership in the club once it transitioned from developer to members. The transition was to occur either by a specific date (April 30, 2006) or once the developer recouped $4.5 million in initiation fees, whichever came first.
The plaintiffs in the Brusher case were among the original members who purchased with this understanding.
From Clubhouse to Controversy: What Changed?
Over time, the club’s organizational structure evolved. To obtain a liquor license, the developer converted the club’s management from a partnership to a non-profit corporation. In theory, this shift was administrative. But in practice, it opened the door for broader changes, most notably, an early transfer of the club’s ownership to members in 1999, well before the agreed-upon transition date.
This “early transfer agreement” was voted on by members. With over 60% in favor, the new agreement passed. Dues were raised, new assessments were introduced, and the club began operating independently of the developer. But not all members agreed with the change.
The plaintiffs, including Fred Brusher and other dissenting owners, refused to join the newly formed “Equity Yacht Club.” They argued that they should not be forced to pay increased dues or assume financial responsibility for a club they never agreed to join, especially when the original membership plan included a capped dues structure and the right to opt out of the equity club. So, they sued.
The Court’s Decision: Membership Cannot Be Forced
The Michigan Court of Appeals sided with the plaintiffs.
The Court held that the original membership plan was a binding contract. Its plain language allowed owners to opt out of the new, member-controlled yacht club by choosing not to purchase a share of stock in the Equity Club. In other words, the developer could not retroactively alter the deal by requiring continued membership, and neither could a majority vote from other club members.
The Court stated:
“Reading these unambiguous portions together, the plan allows members of the old club to opt out of membership in the new club by refraining from purchasing a share of stock in the membership-owned corporation. Because plaintiffs declined to purchase stock in the new membership-owned club, they are not bound by the membership plan to become or remain members of the newly organized club.”
Even in private communities with common amenities, majority rule has limits, especially when it attempts to override individual contractual rights.
Why This Case Still Matters for Community Associations
While Brusher specifically involved a yacht club, the legal and practical lessons apply to many associations, particularly those with amenities owned or operated separately from the condominium or HOA itself.
Here are four key lessons that associations, developers, and unit owners can learn from this case:
- Contracts Matter More Than Majority Votes
The most powerful part of this decision is its affirmation that developers and associations cannot change a binding agreement just because the majority supports it. If your governing documents say one thing, a vote, even by a supermajority, cannot say another unless the documents explicitly allow it.
Associations should be cautious when trying to amend master deeds or membership agreements without unanimous consent if those documents grant individual rights.
- Clarity in the Master Deed and Membership Plans Is Critical
The Brusher case hinged on the court’s interpretation of the membership plan language. That plan clearly stated when and how ownership would transfer and what would happen to members who chose not to participate.
Boards and developers must draft documents with precise, plain language. Ambiguity in a membership plan or governing documents creates confusion, conflict, and lawsuits.
- Amenity Structures Must Be Carefully Integrated into Governing Documents
Many associations do not own or control the amenities their communities enjoy. Clubhouses, pools, or golf courses may be owned by a separate entity, with separate financials, boards, and rules.
If association members are required to join or financially support these amenities, the structure of those obligations must be transparent. Is membership mandatory? Can dues be increased? What happens if the ownership changes hands?
Failing to address these details upfront can expose the association to legal risk later on.
- Transfers of Control Must Follow Original Agreements
The early transfer of the yacht club was ultimately a business decision. But the Court made clear: business convenience doesn’t override legal obligation.
Even if the majority sees financial benefit in an early transition, that benefit can’t be imposed on those who opted into a different agreement, especially when that agreement was a material term of their property purchase.
Conclusion
The Brusher case is a reminder that the fine print matters. At Hirzel Law, we’ve seen firsthand how unclear documents and rushed transitions can create long-lasting legal challenges for community associations. This case is a textbook example of why legal guidance is critical from the outset especially when managing amenities, drafting developer agreements, or navigating control transfers.
If you and your board are navigating a dispute involving a private club or facing unclear obligations in your community’s governing documents, we’re here to help. Our team focuses exclusively on representing condominium and homeowners association boards, with deep experience in amenity agreements, master deed interpretation, and protecting your association’s legal and financial interests.
Rita Khan is the Director of Marketing at Hirzel Law, PLC. Ms. Khan received her Bachelor of Arts in American Culture from the University of Michigan, Master of Business Administration with a focus on Business Intelligence from Baker College, Paralegal Certificate from the University of Michigan Flint – Center for Legal Studies, and Graphic Design Certification from the New York Institute of Art and Design. Ms. Khan has over 15 years of experience in the property management industry from residential real estate, student housing, and condominium & HOA management. Ms. Khan holds several designations and certifications such as Certified Manager of Community Associations (CMCA), Association Management Specialist (AMS) and Professional Community Association Manager (PCAM) from the Community Associations Institute (CAI), Accredited Residential Manager (ARM), Accredited Commercial Manager (ACoM), and Certified Property Manager (CPM) from the Institute of Real Estate Management (IREM), Certified Apartment Manager (CAM), Certified Apartment Portfolio Supervisor (CAPS), and Certified Apartment Supplier (CAS) from the National Apartment Association (NAA), Project Management Professional (PMP) from the Project Management Institute, Certified ScrumMaster (CSM) from Scrum Alliance, Professional Certified Marketer Marketing Management (PCM) from the American Marketing Association and Certified Digital Marketing Professional (CDMP) from the Digital Marketing Institute. She is a licensed Michigan Real Estate Salesperson, Broker and Notary Public. Ms. Khan is also a Real Estate Property Management faculty member at Schoolcraft College where she teaches Introduction to Property Management and Residential and Commercial Property Management. Ms. Khan is an active member of the Community Association Institute (CAI) and the Institute of Real Estate Management (IREM), where she serves as a member of the IREM Foundation Board of Directors and a member of the Board of Directors for the IREM Michigan Chapter. Ms. Khan has previously served as a Delegate Member on the CAI Michigan Legislative Action Committee and the Chair of the Social Media Committee for CAI Michigan. She may be reached at (248) 986-2290 or rkhan@hirzellaw.com.
