Homeowners sue over $50K Bluffton neighborhood club they say they were forced to join
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- Two homeowners allege they were forced to pay $50,000 in club joining fees.
- Club later announced its joining fee was reduced to $0 for new homeowners.
- Lawsuits challenge the legality of mandatory club membership and contract changes.
Legal battles in one luxury Bluffton community are multiplying.
Two homeowners in Palmetto Bluff are suing after being forced to pay a $50,000 fee they claim wasn’t being enforced when they signed a contract of sale for the property.
In the lawsuit, filed Feb. 12, John and Paige DeRiggi claim that a membership in the Palmetto Bluff Club was “voluntary” when they executed a contract of sale in September 2025 on the $2.6 million home they eventually purchased.
According to the suit, the DeRiggis were later forced to join the club and pay a $50,000 joining fee or risk losing their property.
Months later, after the DeRiggis paid the $50,000 fee, the Palmetto Bluff Club reduced the joining fee to $0 for all new homeowners.
The changing rules are in part due to Palmetto Bluff’s response to a separate ongoing lawsuit challenging the legality of its mandatory club membership fees and club structure.
In April 2022, over a dozen homeowners sued Palmetto Bluff Development, the Palmetto Bluff Club, South Street Partners, and several other related entities over its mandatory club membership fee and short term rental policies.
That suit questions whether homeowners can be forced to join the Palmetto Bluff Club, which is not registered as a nonprofit entity, according to the South Carolina Secretary of State. The suit frames the club as a “for-profit” entity, while the defendants argue that club does not make a profit, and therefore operates “like a nonprofit.”
Homeowners want a refund
The DeRiggis filed suit on Feb 12 against Palmetto Bluff Development, the Palmetto Bluff Club and South Street Partners, which owns Palmetto Bluff and controls the club.
South Street Partners acquired Palmetto Bluff through a joint venture with Henderson Park Capital, an international private equity real estate firm, in June 2021. The firm subsequently assumed control of the Palmetto Bluff Club, according to a February 2022 news release.
According to the DeRiggis lawsuit, the couple executed a contract of sale for the property in Palmetto Bluff on Sep. 13, 2025, weeks before the sale was final, and put $200,000 in escrow as earnest money.
In real estate, a contract of sale formalizes the conditions of a home purchase, but often comes weeks or months before the buyer closes on the property. In this case, the DeRiggis closed on the property four weeks later.
At the time of the contract of sale, the DeRiggis say Palmetto Bluff Club had a “voluntary membership policy,” which they say they “relied on” when they signed on the property as they did not plan to join the club. Neither the contract of sale nor the membership policy were attached to the lawsuit.
In June 2023, Palmetto Bluff Development and the Palmetto Bluff Club filed a declaration with the Beaufort County register of deeds waiving the requirement for new owners to join the club and allowing existing owners to resign their memberships.
Four days after the DeRiggis signed the contract of sale, South Street sent an email to community members saying the firm had “elected not to further pursue the alternative of voluntary membership” and would be “revising the Club Membership Plan to remove the voluntary membership provisions,” according to the suit.
According to the suit, the DeRiggis asked South Street to honor the voluntary membership policy that was in place when they executed the contract of sale, but were told they would be forced to pay the $50,000 joining fee as a condition of purchasing the home.
The DeRiggis allege that they paid the $50,000 “under duress” to avoid losing their $200,000 in earnest money. They closed on their $2.6 million property on Oct. 14, the suit says. Property records show that the DeRiggis signed an agreement with the developer on Oct. 14, acknowledging that membership in the club was mandatory at the time.
A few months later, on Dec. 1, South Street announced via email that the club joining fee would be reduced to $0 effective Jan. 1.
The DeRiggis requested a refund but were denied, according to the suit.
They allege that South Street’s actions constituted an “improper unilateral modification of the contract and interfered with Plaintiffs’ contractual rights.”
The suit requests $50,000 as damages as well as a refund of their original joining fee, plus interest, and attorneys’ fees.
Asked about the lawsuit during a Feb. 24 interview with The Island Packet, Jordan Phillips, managing partner of South Street Partners, declined to comment on the new suit, saying his team had not read it yet. A follow-up call to Phillips from The Packet on Tuesday had not been returned as of 2:15 p.m.
The flip-flop: a timeline
Palmetto Bluff is one of Bluffton’s most expensive gated communities. In 2025, the average resale price on a home was $2.95 million, according to a real estate report.
Palmetto Bluff’s base amenities are managed by a separate entity called the Palmetto Bluff Club, which is controlled by South Street Partners. Members of the club can access pools, fitness centers, tennis courts, restaurants and more. The base membership does not include golf, boating or shooting clubs.
Membership in the base club has been mandatory since long before South Street and Henderson Park acquired Palmetto Bluff. According to the Palmetto Bluff Community Charter, executed in 2003, by accepting the deed to a property, the homeowner automatically becomes a member of the Palmetto Bluff Club and agrees to be bound by the terms and conditions of the club documents.
The 2022 lawsuit, which is ongoing, challenged the legality of that structure.
In response to the original suit, Palmetto Bluff Development offered to waive the mandatory membership requirement. Current members were offered a reimbursement of their joining fee if they chose to resign their memberships.
That spurred another lawsuit.
In the second suit, filed on March 6, 2024, plaintiffs argued that the waiver constituted an invalid change to the covenants that without going through the proper amendment process and without signatures from a majority of homeowners.
A special referee assigned to the case sided with the plaintiffs. If Palmetto Bluff Development wanted to remove the mandatory membership requirement, it had to be done via a vote.
The referee order was signed on March 14, 2025, months before the DeRiggis signed on the property. The order was filed with the Beaufort County Register of Deeds on Oct. 3, 2025.
In a Feb. 24 interview with the Packet, Phillips, the South Street Partners managing partner, said that several community meetings were held to gauge whether a vote to axe the mandatory membership requirement would be successful.
The majority of homeowners who attended the meetings preferred keeping mandatory membership, according to Phillips.
“We decided to move towards reducing the joining fee to zero, all in an attempt to be proactive and address claims in the lawsuit,” Phillips said during the Feb. 24 interview.
Original suit is ongoing
The new lawsuit joins a host of others against Palmetto Bluff and related entities, stemming from frustrations with its mandatory membership fee, short-term rental rules and other issues.
On April 12, 2022, about a dozen homeowners representing properties in short-term rental areas in Palmetto Bluff filed suit against the developer, the club, South Street Partners, and other related individuals and entities.
The suit accuses Palmetto Bluff Development of working with the other defendants to “carry out a deceptive and costly hoax on Palmetto Bluff property owners.”
A key question raised by the suit is whether it’s legal under South Carolina law to force homeowners to join the Palmetto Bluff Club, which the suit frames as a “for-profit” entity.
Club membership is also mandatory for property owners in other Bluffton communities, such in Oldfield and Berkeley Hall. But while Oldfield Club and Berkeley Hall Club are registered as nonprofits, Palmetto Bluff Club is not, according to the South Carolina Secretary of State. In most gated communities in Bluffton, homeowners collectively own the amenities. According to the recreational covenants, Palmetto Bluff Club members have no ownership interest in the club, just the privilege of using its facilities.
Attorney Ian Ford compared the situation to homeowners being required to join a privately-owned fitness center, such as Gold’s Gym.
“If you’re a member of your Gold’s Gym, they don’t let you vote if they’re going to raise dues,” Ford said.
The mandatory membership requirement, the structure of the club predates and disagreements around short-term rental rules all predate the acquisition of Palmetto Bluff by South Street Partners and Henderson Park. However, the lawsuit says the acquisition was the “catalyst” for legal action.
Phillips disagreed with the framing of the club as a “for-profit” entity. The base club covenants, he argued, require that dues be set at “break-even” level.
“It cannot make money,” Phillips said, “so it operates like a nonprofit.”
He said South Street is “prepared to defend” the club structure “as we think it’s certainly acceptable and legal.” In follow-up email sent March 2, Phillips declined to allow The Island Packet to review club financials to confirm that it does not make a profit, but said the financials are available to members.
What’s the status of the original case?
The South Carolina Supreme Court will hear the 2022 case on April 22 at 10:30 a.m. The court will not rule on the case itself, but whether the developers can enforce an arbitration clause in the club agreements.
Palmetto Bluff raises golf fees
Joining fees for golf memberships at Palmetto Bluff are going up soon, according to an emailed update sent to club members on March 13 by Rob Duckett, president of operations at Palmetto Bluff.
The Palmetto Buff Golf Club has a tiered membership structure where members of different tiers get different access to golf amenities.
Tier I members get unlimited access to all golf courses in Palmetto Bluff, including Anson Point, the community’s newest premium amenity. Tier II members get four tee times per year at Anson Point, 15 tee times per year at May River Golf Course, and 15 tee times per year at Crossroads. Sports members only get unlimited access to Crossroads.
Effective May 1, the joining fee for a Tier I membership will increase from $200,000 to $300,000, according to the update. For Tier II membership, the fee is increasing from $100,000 to $120,000, while the Sports Membership fee is increasing from $20,000 to $30,000.
Membership in the Palmetto Bluff Golf Club is optional for homeowners. Some private communities in Bluffton, like Palmetto Bluff, manage golf separately, while others lump golf fees in with base dues.
Other communities in Bluffton also charge homeowners high fees. At Colleton River Club, new homeowners must pay a $125,000 one-time fee upon purchasing property. They can pay $22,077 annually for a limited membership that does not include golf, or $31,542 for a full membership that does include it. At Spring Island, new homeowners pay a $150,000 initiation fee plus $34,695 in annual dues.
The cause for the Palmetto Bluff Golf Club fee increase was not disclosed in the emailed update.
This story was originally published March 18, 2026 at 5:00 AM.
