But nonequity luxury private-resident clubs may have strings.

Don't be surprised if one of your clients is courted by a unique private nonequity luxury residence club in which America Online cofounder Steve Case owns a 50% stake.

But before you swallow the club's concept, akin to a private nonequity country club, it's critical to weigh all possible pros and cons for your clients.

The pros are enticing. Members can stay at a selection of residences worldwide, with an average value of $2.5 million, each with an on-site concierge to handle such details as grocery shopping and advance reservations for transportation, restaurants or golf tee-times. There's probably even a plasma TV, and perhaps an infinity pool. The ratio of members to homes is kept low, so members can book the times they want.

Possible cons: The company, Exclusive Resorts LLC of Denver, is private, so public information about it and companies like it is hard to come by. Members are not actually buying an investment that can appreciate, and state regulation may prove thin.

Under Exclusive Resorts' program, "members" pay a one-time $375,000 deposit for a 30-year term, and annual "dues" ranging from $15,000 to $19,000, based on the occupancy time-30 to 60 days-the member selects. Up to 80% of the deposit may be refundable if the member quits.

The company owns or leases more than 200 residences, with at least 109 available at this writing for members to choose, and more were being added weekly.

It partners with other developers, including Trump International in New York and Timbers Company of Carbondale, Colo. Exclusive Resorts earns greater profits from the sale of its properties than through club memberships, according to cofounder, chairman and CEO Brad Handler, formerly legal counsel to eBay Inc.

Club members largely are travelers, with family net asset values of at least $10 million, who prefer a changing array of destinations. Because properties may change hands, Handler stresses that the club is not a good fit, for people who prefer returning to the same place.

A member who buys into Exclusive Resorts' program owns no real estate or any other investment that can be sold.

The big risk: There is no guarantee a member who quits will get 80% of his or her deposit back. The refund is available-as with many private nonequity country clubs-on a "three in, one out" policy. The member who resigns obtains the 80% deposit refund only after a third new member joins. No new members at the end of 24 months? Then the entire membership may vote on whether they want to dissolve the club and divide up its assets. If 75% decide to dissolve the club, they can turn assets over to a third-party trustee and proceeds may be distributed to all members on a pro rata basis, Handler says. The club, at this writing, was claiming 700 members and a 100-person waiting list, so a quitting member probably would get an immediate 80% refund, he notes.

The club, nearly two years old, has been marketing its program largely through traditional media such as print ads and event sponsorship. However, it also is forging marketing relationships with professional groups, including Virtuoso, a $3 billion luxury travel network. Now, eight people are on board "to educate" financial advisors.

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