Club membership fee included in valuation of condominium when membership is requirement for ownership in the community.(Recent Court Decisions)(Cedars Club )

A nonrefundable club membership fee was properly included in the assessed value of a condominium in a retirement community when membership was a requirement of owning community property, according to the Court of Appeals of North Carolina.

In 2002, Rollie and Mary Tillman purchased a condominium unit located in The Cedars of Chapel Hill, a continuing care retirement community, for a total purchase price of $456,000. The purchase price included a nonrefundable membership fee of $45,600; the deed to the unit states that membership in the Cedars Club is a requirement of ownership and residence in the community.

The Cedars Club provides residents with a range of amenities and services, including dining, laundry, housekeeping, and health care when it becomes necessary. For the 2005 tax year, the county assessor valued the Tillmans' condominium at a total of $447,994. The county tax appeals board affirmed the assessment, and the Tillmans appealed to the North Carolina Property Tax Commission (Commission).

The Commission affirmed the assessment, finding that the cost of membership in the Cedars Club was properly included in the assessor's valuation of the Tillmans' property. The Tillmans appealed.

The appellate court found that the Tillmans' membership in the Cedars Club affected the value of their ...