Fore Sale: Repurposing Golf Courses 

Imagine driving by a neighborhood golf course and seeing a large sign advertising new homes replacing the golf course. How could that happen and more importantly, is it even legal for a community to lose its golf course to development? 

As a licensee focused on homeowners buying and selling houses within this neighborhood, you immediately think about the adverse effect on your clients’ expectations that the golf course would remain in place (and operating) forever. However, your licensee friend riding with you, whose focus is commercial development land, responds, “What a brilliant idea! I wish I’d thought of that.” 

The potential for a long existing golf course in a residential community to be repurposed creates concerns and opportunity, and winners and losers. A residentially focused licensee should advise any buyer or seller in a golf course community how to properly handle this unique transaction. A commercially focused licensee may be interested in opportunistically finding well-located redevelopment land disguised as a golf course. 

The Changing Dynamics of Golf

Texas is one of the top four states for golf courses along with Florida, California, and New York.  From 1986 to 2005, golf course growth was unsustainable, increasing by 44 percent.  Since then, net growth has stopped, and golf courses have closed at the rate of approximately 1 percent annually. Based on 18-hole equivalents, 72.7 courses closed in 2024 and 22.1 new courses opened.  Many Texas golf courses have been closed and repurposed.   

Until the COVID-19 pandemic, golf participation suffered a precipitous fall in demand. Since then, a modest resurgence in golf demand has occurred, but a significant portion of that demand growth is satisfied by non-traditional golf such as short executive courses (significantly reducing the time for play), specialized facilities like Topgolf, other high-end driving ranges, and golf simulators. Existing traditional golf courses continue to suffer and close. 

Why Are Golf Courses Closing?

Many golf courses are well located as redevelopment sites. The primary redevelopment opportunity is residential housing, but there are often retail development sites where golf courses abut a major thoroughfare. 

Operating, maintaining, and improving a golf course is a long-term business enterprise and is expensive, particularly for water and labor. The demand for older “worn-out” golf courses is low.  Consumers like something new, different, and with current design. Far too many older courses play long, and younger golfers don’t have the time to play. As a result, there are many golf courses that have become worn out, daily fee courses with declining profitability.  The end is near. These are the golf courses that are prime for redevelopment. 

What is the Lifecycle For a Residential Subdivision Golf Course?

Golf courses were the creation of residential developers who realized consumers will pay a premium for golf course lots and even golf course community lots. These lots are obviously preferred by golf enthusiasts, but they’re also attracting non-golfers who enjoy the meticulously manicured views of the course.   

During the lot sale process, the residential developer subsidizes the golf course, ensuring that it is operated at a high level to attract buyers. The initiation fees and monthly dues are artificially low due to this subsidy. Once all lots are sold, the residential developer looks to exit the golf course business, which is not their primary focus after all. When the residential developer does sell, it’s usually to a golf course and/or country club operator whose business is profit from operations.  As the golf course (and the surrounding subdivision) age, and the demand for memberships and daily play wains, the golf course may be sold and resold to lesser operators, ultimately ending up with a daily fee operator in many cases. Deferred maintenance and lack of capital investment leads to a death spiral for an unprofitable facility.   

Some golf courses are sold by the residential developer to the neighborhood homeowners association (HOA).  Unfortunately, HOAs may not be good operators, and may be reluctant to raise fees, prices, and call for needed capital assessments. The same deterioration and result may occur if the HOA is not attentive to operational and capital needs.   

Whether owned by a for-profit company or an HOA, a well located, but struggling golf facility, may have strong demand for redevelopment. 

What Legal Limits Affect Redeveloping a Golf Course?

Surprisingly, affirmative restrictions on the redevelopment of residential subdivision golf courses are few. The relevant legal restrictions are municipal zoning and platting, and private restrictive covenants (deed restrictions). Most courses are located outside cities, and thus not subject to municipal zoning regulations. Golf courses located within cities are often zoned in a way that is consistent with the surrounding residential area and thus permitted to be used for residential redevelopment. Then there are the golf courses located outside city limits where only county level regulation applies. In Texas, counties do not have zoning or other use-based controls. In the county, there is no meaningful land-use regulation.  There is a special municipal platting requirement in Texas Local Government Code Section 212.0155, which is applicable in certain cities—including Houston and Fort Worth. This requirement provides meaningful restrictions on repurposing certain golf courses. 

Most residential golf courses have been developed in what would have been advertised as a master planned communities, which have extensive restrictive covenants, including a mandatory membership HOA with mandatory dues. However, many golf courses are not subject to the restrictions that are applicable to the surrounding residential lots. This is the result of intentional action by the developer, leaving the future of the golf course to the developer’s discretion. The HOA has jurisdiction only over the residential lots and not the golf course. In some instances, the golf course was originally subject to a restrictive covenant limiting its use to a golf course and/or country club, but only for a limited number of years.  With that restriction in place, the developer can state that the use is restricted and a buyer may not worry about the distant future. At the end of this period, the golf course is unrestricted.   

Unfortunately, homebuyers rarely do their due diligence on the land use status of the neighborhood golf course before purchasing a lot in the neighborhood. That research would have informed their decision and perhaps helped them avoid the subdivision where the golf course’s future is uncertain. 

The River Plantation Case

Texas courts recently addressed a neighborhood’s lawsuit to prevent the repurposing of its golf course and rejected the association’s legal arguments. River Plantation is in the Houston area and was developed in the 1960s and 1970s as a golf course and country club community. When you purchased a home, it came with an automatic membership to the golf course and country club (subject to the homeowner’s continuing payment of dues). The River Plantation logo included the image of a golf ball on a tee replacing the “i” in River. Sales brochures highlighted the golf course and reportedly, area realtors stated that River Plantation was and would remain a golf course community. 

The developer did not include the golf course area in the neighborhood restrictions or HOA jurisdiction. After the project was built-out with hundreds of homes and a 27-hole golf course, the golf course was conveyed with restrictions limiting its use for 20 years to a golf course.  

After this time passed, the golf course was contracted to be sold for redevelopment. The HOA sued to prevent the redevelopment arguing that the golf course was subject to an implied (unwritten) reciprocal negative easement to golf course only. Under this arcane legal argument, the fact that the original developer sold lots adjacent to the golf course and restricted those lots in ways that benefitted the golf course (such as large building setbacks and required underground utilities) implies that the golf course must remain (and be operated) in perpetuity.   

The trial court, the Court of Appeals, and the Texas Supreme Court all rejected these claims. The Court of Appeals noted that the advertisements were marketing the advantages of living in the subdivision and that the realtors who allegedly made affirmative representations were not agents for the developer. The Supreme Court continued its traditional reluctance to imply restrictions where none have been explicitly stated, holding that the implied reciprocal negative easement theory in Texas only applies where the same restrictions are being sought for the unincumbered property as for the incumbered property. Here, the restricted areas were residential, which was the desired redevelopment use. Instead, the HOA desired to restrict the golf course to golf course use only, not residential purposes. The HOA lost and there are no other reported golf course cases in Texas. 

Courts in a limited number of states have found implied or equitable restrictions or easements in golf course situations, but the cases were all dependent on the specific facts and circumstances. In Texas, those causes of action will have a cool reception from our courts. 

Marketing a House in a Golf Course Community

If a licensee is engaged in a golf course community, they should always advise a buyer to investigate whether the golf course and/or country club is legally committed to both existence and operation. Just because the golf course is limited to golf course use does not mean that it must be operated. If your principal declines to investigate, you should advise them that they cannot rely upon the future existence and operation of the golf course and/or country club. If they ask you to undertake the investigation, the best practice is to decline to do so. If you agree to investigate and share your findings, you should advise them to consult with an attorney to review the information. Do not interpret legal documents. If you represent a seller, never make any representation about the future of the golf course and country club but recommend they conduct their own due diligence.   

National Golf Foundation View

In the 2025 edition of The Graffis Report, the National Golf Foundation stated the following about golf course demand and closures: 

“Closures are an inevitable part of the industry’s business cycle, driven by various factors including: 

• Local micro-economies and shifting customer needs 

• Market competition dynamics, particularly in areas affected by the 20-year building boom 

• Property values and “higher and better use” opportunities 

• Natural business turnover and owner exit strategies” 

The full report is available to foundation members here: https://www.ngf.org/graffis-report/the-graffis-report-2025/ 

Takeaways

Whether representing a residential property or a commercial transaction, a golf course transaction will test a licensee’s knowledge, experience, and preparation. 

When the neighborhood golf course closes, many residents will be surprised. Some will be angry, particularly a recent homebuyer, and blame the parties involved in the transaction for their situation, including licensees. A thorough investigation and disclosure will protect the licensees and fulfill their duties to their principals. 

Buyers must beware and not have embedded assumptions that the golf course view from their new home will last forever. Sellers must do their own due diligence and avoid any representations as to the lifetime of a golf course by their home being marketed. Licensees should carefully counsel their principals to ensure they understand what could happen to their golf course community while they live there.