club_cafe: Delinquent Dues and Late Fees at time of Withdrawal

iras1 on

Right now you are boxed in by your partnership agreement and you must follow it or change it.

I have a strong philosophical disagreement with your agreement. A club is not "entitled" to regular dues from its members. If a member contributes money s/he gets a larger ownership share of the total pot, if not, no increase in ownership. You should not be reducing the withdrawal amount to "recover" unpaid dues. Taking your approach to the extreme... if a new member joins, pays one month's dues, doesn't pay again for 3 months and then withdraws, is the club going to sue for the missed dues?

I'm also personally opposed to late fees for the same reason. If the payment isn't received "on time" as defined by the PA, it is considered a contribution for the following month. No units are issued until then.

My approach does create a challenge for the club. The amount of cash available for investment may vary significantly from month to month and you won't necessarily know in advance how much you'll have.

Nevertheless, if your PA currently says withhold unpaid dues and late fees, I'm afraid that's what you have to do. (or change things quickly/retroactively).

Ira Smilovitz

In a message dated 07/11/03 12:46:37 AM Eastern Daylight Time, spepper@bivio.com writes:

Our partnership agreement says that delinquent dues and late
fees are subtracted from the Withdrawal amount. Our club
has a member who did not pay dues for the last two months
prior to her withdrawal. Late fees on the unpaid dues are
owed the club at the time of her withdrawal. It seems that
since her dues are not included in the valuation of the club
or in her unit value that it would be unfair to subtract the
dues that were not paid. The late fees seem to be another
matter. It seems that because she was late on dues this is
actually an amount owed to the club, thus should be
subtracted. This was a topic of discussion at our club
meeting and there were different points of view.
Am I thinking about this correctly? Has anyone else
encountered this? I am just wondering whether to pay her
her account value minus the withdrawal fee or subtract
unpaid dues and late fees in addition to subtracting the
withdrawal fee.

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