TROON / SLCC MANAGEMENT AGREEMENT ANALYSIS
TROON / SUN LAKES COUNTRY CLUB MANAGEMENT AGREEMENT ANALYSIS
Version 4 - Board, HOA Counsel and Community Review Edition
September 2, 2026
Purpose
This report was prepared by Sun Lakers for Accountability and is an owner-side business, financial, operational and governance risk assessment of the executed Troon / Sun Lakes Country Club management agreement. It is intended to support informed review by the SLCC Master Board, California HOA counsel, relevant advisory committees and the SLCC community.
This report is not legal advice. Legal conclusions, enforceability, director duties, insurance coverage and interpretation of the executed agreement should be determined by SLCC’s qualified California HOA counsel and insurance professionals.
Executive Conclusion
The Troon Management Agreement contains a number of provisions that appropriately protect Sun Lakes Country Club. Many obligations use mandatory “shall” language; the Board retains important approval authority; SLCC retains ownership of its records and Community Work Product; reserve-account access is restricted; and the indemnification provisions provide meaningful protection.
Those strengths, however, do not eliminate a substantial number of unresolved business, financial, operational and risk-allocation concerns. More than 60 provisions or issues have been identified in this review, ranging from drafting ambiguities to matters that warrant immediate attention because of their potential financial or operational consequences.
The principal concern is structural. SLCC is retaining Troon to professionally manage a large and complex community, yet SLCC continues to bear much of the underlying economic, staffing, insurance, vendor and operating risk. At the same time, several important Troon responsibilities are qualified by terms such as “assist,” “advise,” “reasonable efforts,” “commercially reasonable efforts,” “when requested,” and similar language. These qualifications do not make the entire agreement a best-efforts contract, but they substantially reduce accountability in several areas where measurable performance obligations would better protect SLCC.
The agreement also contains ambiguities and apparent inconsistencies involving spending and withdrawal authority, startup costs, staffing, insurance responsibilities, procurement, compensation and the General Manager. These matters should have been reconciled before execution.
Of particular concern is the transition. The Transition Plan provided for review is principally an activity schedule rather than a comprehensive transition-control plan. It does not consistently establish accountable owners, measurable deliverables, acceptance criteria, dependencies, escalation procedures, risk controls or formal completion and Board acceptance. The absence of a permanent General Manager familiar with Troon's systems, policies, resources and internal organization increases that transition risk.
The copy of the executed agreement made available for this review also does not include the actual Exhibit D Labor Costs Spreadsheet, even though the agreement incorporates that exhibit and relies on it to identify anticipated onsite labor costs. Without Exhibit D and a comprehensive estimate of pass-through personnel, benefit, insurance, technology and reimbursable costs, members and directors cannot readily determine the agreement's total expected financial impact or compare that cost with the incumbent management arrangement.
Several other matters warrant immediate attention, including the 21% payroll burden and its limited auditability; vendor compensation and potential procurement conflicts; the interaction between Troon's indemnification obligations and insurance SLCC is required to purchase; insurance coverage limitations affecting onsite Troon personnel; unilateral withdrawal authority for certain budgeted expenditures; the inherited-data disclaimer; undefined incentive-fee KPIs; cybersecurity obligations; and the lack of measurable service levels across several major management functions.
Because the agreement has now been executed, the immediate objective should not be to revisit the selection decision, but to reduce the identified risks before full operational implementation. The Board should request that California HOA counsel, SLCC's insurance adviser, appropriate financial advisers and Troon review the high-priority items in this report and the separate Transition Plan Analysis.
Each material issue should be evaluated to determine whether it can be addressed through clarification, written operating procedures, Board policy, an amendment, or other mutually agreed contract documentation. Issues that materially affect SLCC's financial exposure, operational continuity, internal controls, insurance protection or Troon's accountability should be resolved with Troon rather than left to informal understandings.
The agreement has been signed. That makes disciplined contract administration, measurable performance standards and a controlled transition more important—not less important. The Board should consider presenting revisions to the agreement as risk mitigation in exercising proper fiduciary responsibility as required by Davis-Stirling indication that the agreement had not been adequately reviewed for business, financial, or operational risk before it was signed by the Board.
Detailed Analysis
The following is an owner-side business, financial and operational risk assessment of the Management Agreement between Troon and Sun Lakes Country Club (“SLCC”), signed by Troon on August 28, 2026, and by SLCC on August 31, 2026. This is a business and contract-risk assessment and is not intended to constitute legal advice.
The assessment was prepared by reviewing the agreement from beginning to end and identifying provisions that may create material business, financial, operational, governance, transition, or risk-allocation concerns for SLCC. Provisions that did not present a material concern for purposes of this assessment generally were not included. Accordingly, the absence of a provision from this analysis should not be interpreted as either approval or criticism of that provision.
For each provision identified, the applicable section of the agreement is referenced, followed by a description of the concern, the potential risk to SLCC, and, where appropriate, a recommended action or contractual clarification.
Issues considered High Priority are shown in red. A High-Priority designation indicates that the provision may materially affect SLCC's financial exposure, control of funds, insurance protection, operational continuity, transition risk, procurement integrity, or ability to hold Troon accountable for performance. The designation is intended to assist the Board in prioritizing issues for further review and does not constitute a legal conclusion.
Because the agreement has already been executed, the purpose of this analysis is not simply to identify provisions that might have been negotiated differently before execution. Its principal purpose is to identify material risks that should now be evaluated and, where appropriate, addressed through clarification, operating procedures, Board policy, supplemental documentation, insurance review, contract amendment, or other action agreed upon by SLCC and Troon.
1. Appointment, term and termination
I.B – Either party may terminate without cause on 30 days' notice. It may seem protective, but it also creates major operational risk. What are SLCC realistic options to select a replacement management company. SLCC is a large and complex CA HOA. We already know that companies like Keystone, Management Trust, and others fall short. If Sun Lakes dump FSR, will they be willing to reengage? Troon can leave on the same 30-day notice, creating substantial continuity risk if the GM and other staff are Troon employees.
I.C – SLCC may modify scope on 30 days' notice with corresponding fee adjustment but “concomitant increase or decrease” is not defined. Troon could dispute the appropriate price reduction. Require a predetermined pricing methodology.
Recommended change: require 90 days' notice by Troon, while preserving SLCC's 30-day termination right, plus mandatory transition assistance after termination. (High Priority).
2. Centralized services
II.A opening obligation – “shall perform all services” is useful contractual language and should be preserved.
Payroll/HR administration-Definite functions are identified, but no accuracy standard, payroll deadline, error correction requirement or penalty for late tax deposits/payroll failures.
Human Resources Learning& Development-Troon merely provides its “standardized materials.” That does not clearly require completion, attendance tracking or legal compliance outcomes.
Controls & Compliance – “periodic oversight” is Weak and “Best Efforts in substance, “Periodic” is undefined. No frequency, internal-control standard, written reports, remediation deadlines or duty to report deficiencies to the Board.
Golf operations - Broad operational responsibility is placed on Troon.
Technology Services- Weak / mostly marketing language. Phrases such as “optimize every facet,” “enhanced operational efficiency,” and “strategic enabler” are aspirations, not measurable service obligations. There are no uptime, cybersecurity, recovery-time or incident-response standards. (High Priority). Major risk: cybersecurity and IT are mission-critical, yet this is one of the least measurable service descriptions in the agreement.
3. General Manager and staffing (High Priority).
This is one of the most important sections given the transition concerns previously identified.
II.B.1 – Troon recruits; Board makes final GM selection preserves Board control over the critical GM appointment.
II.B.2 – dissatisfaction with GM is a Weak “Best Efforts that states parties will make “reasonable efforts” to resolve problems, “including ultimately” replacing the GM. No deadline or unilateral SLCC removal right. (High Priority).
II.B.4 – necessary/customary management services is broad but subjective. Central-office delivery may reduce onsite accountability.
II.B.5 – full-time certified onsite GM, SLCC provides office, computers, programs, supplies- Significant costs remain with SLCC despite management/IT fees. Avoid duplication between equipment/software paid by SLCC and the separate technology fee.
II.B.6 – professional/responsive office reasonable, but subjective. Add response-time/member-service KPIs.
II.B.8 – full-time Director of Operations/AGM Definite staffing commitment, though additional worker numbers remain driven by SLCC requests and costs.
II.B.9 – maintenance work/supervision Clear hierarchy but no preventive-maintenance standards or service levels.
II.B.10 – SLCC pays all operating expenses/tools/vehicles. Extremely broad. “All operation expenses” should be defined and limited to Board-approved budgeted costs.
II.B.11 – Troon replaces vacancies- incomplete, no maximum vacancy period. A vacancy could technically remain open while ABC is “providing” a recruitment process. Require interim coverage and filling deadlines.
II.B.13 – raises/bonuses - Weak, SLCC only “consults with and advises” Troon. Since SLCC ultimately pays the cost, Board approval should be required for compensation increases.
II.B.14 – $1,000 continuing education Clear cap, but consider whether Board approval should apply to expenditure.
II.B.15 – vacation schedules/temporary replacements. Replacement only occurs “if requested by SLCC.” Better: automatic replacement when absence materially impacts service.
II.B.17 – Troon benefits plans “Existing plans for similar personnel” provides little cost or benefit-level certainty.
II.B.18 – Troon schedules employees; Board approves significant changes. Ambiguity “Significant” is undefined. Troon controls hours while SLCC bears actual wages. Define staffing levels/FTEs and Board approval thresholds.
GM provision requiring change
Replace II.B.2 with a clause giving SLCC the unilateral right to require removal/replacement of the GM, perhaps after consultation with Troon, with an interim executive appointed immediately and permanent replacement within a specified period.
Otherwise, the Board has final selection authority when hiring—but surprisingly weak authority when the selected GM subsequently performs poorly.
4. Food and beverage oversight
Troon must administer and oversee the separate CCL food-and-beverage contract and report noncompliance, but expressly assumes no liability for CCL performance.
That distinction is understandable if CCL is an independent contractor, but Troon should, at minimum, be accountable for:
timely detection;
documented monitoring;
prompt notice;
escalation;
corrective-action recommendations; and
verification that corrective action occurred.
Currently Troon could arguably satisfy the agreement merely by reporting CCL's noncompliance.
5. Transition obligation (CRITICAL-High)
Troon may not charge startup or transition costs, and the Transition Plan is incorporated as Exhibit A, but it is not present in the agreement.
The major problem is that the agreement does not convert the Transition Plan milestones into acceptance criteria, warranties, deliverables or remedies. This reinforces the earlier assessment: Exhibit A remains primarily an activity schedule rather than a contractual performance-control system. Detailed analysis of the Transition plan dated August 10, 2026 has been conducted in a separate document.
6. Homeowner services (Medium)
The agreement does contain a measurable requirement to acknowledge and return homeowner calls and emails by the end of the next business day.
C.1 professional rapport/report serious problems – professional standard, but subjective. C.2 governing-document assistance – “cooperate,” “assist.” Best efforts
C.4 communications/ SLCC bears central-office mailing costs.
C.6 sub-association interface no measurable deliverable what happens if FSR does not renew?
7. After-hours coverage (Medium)
Troon must provide a 24-hour answering service and on-call manager. However, consultation with the GM/Board occurs merely “when possible.”
8. Common-area/vendor management (Medium)
Troon must conduct common-area inspections “weekly or as required,” supervise vendors to ensure prompt contract compliance and immediately notify the Board of major hazards. This is generally strong and protective. However, contract/bid review occurs “when requested by the Board.”
9. Golf operations (Medium-High)
The golf provisions are generally among the stronger operational provisions.
Troon “shall supervise and administer” daily golf operations; Board approval is required for golf policies and pricing; POS/accounting procedures are Board-agreed.
One concern arises in the Pro Shop: purchasing priority is expressly given to Troon’s select vendors. That becomes more important because the procurement section later allows Troon to receive and retain vendor compensation. This creates an inherent conflict of interest.
Golf-course maintenance obligations themselves are definite: Troon must administer and maintain both courses, establish agronomic standards, and manage maintenance equipment/policies. What is missing is the measurable condition standard: turf condition, greens standards, water management, course closure criteria, equipment maintenance standards and capital-plan responsibilities.
10. Board support (Medium)
Several obligations are good, but one wording choice should definitely change. The document says: “It is expected that the SLCC General Manager shall attend…” That is materially weaker than “shall attend.” Change to “The General Manager shall attend…”
Board packets, notices, minutes and action lists are much stronger obligations, including a seven-day deadline for draft minutes.
Election support is only an obligation to “assist” inspectors of elections.
11. Legal/regulatory compliance (Medium-High Priority).
Troon will, “to the best of its ability,” keep the Board advised of current and new laws.
Rating: Explicit Best Efforts.
This should be replaced with a defined obligation such as timely notice of material statutory/regulatory developments affecting operations, while recognizing that Troon is not acting as legal counsel.
Troon has a “duty” to operate and maintain the property according to prevailing industry standards and Board directives.
12. Records and data (High for data/transfer/backup; Medium otherwise)
Troon must organize and retain records, maintain financial records consistent with specified California law, immediately transfer SLCC records upon termination, back up records every business day and maintain compliance documentation. However,
Owner list maintenance uses “commercially reasonable efforts,” and discovery of ownership transfers uses “reasonable efforts,” with express exclusions for court/county-record searching. Those are simply “best-efforts” provisions.
13. Performance incentive (High)
Troon may earn an incentive fee up to 20% of the Base Management Fee, based on KPIs established annually. This creates open ended financial risk. “Professionalism,” “appearance,” “member satisfaction” and “associate satisfaction” are subjective unless the agreement establishes:
survey methodology;
baseline;
participation threshold;
numerical targets;
weight assigned to each KPI;
who calculates results;
whether material contract defaults eliminate the incentive;
whether financial performance caused by deferred maintenance can count positively.
Most importantly, the incentive should not be paid merely because expenses are below budget, if service levels, reserve needs or maintenance were deferred.
14. Financial management (High Priority).
The annual budget and monthly financial-reporting provisions are generally strong. Troon must prepare the budget and monthly financial package within ten business days.
But several qualifications matter. The key CC&R/budget-management clause says Troon shall use “commercially reasonable efforts to assist” the Board. Another vague ”best efforts” statement lacking adequate definition.
Audited statements and tax returns are expressly excluded from Troon responsibility. That's commercially understandable, but Troon should remain liable for the accuracy, completeness and timely delivery of information it supplies to the auditor.
Monthly reporting also says “as requested by the Board.” Monthly financials should be automatic, not dependent upon a recurring Board request.
The collection provision requiring Troon to prevent negotiation of payments after attorney referral uses “reasonable effort within its control.” Again, “Best Efforts”, not a guaranteed control.
15. Board access and spending controls (High Priority).
The $500 non-budgeted disbursement limitation and $5,000 emergency authority provide useful controls. However, this should be reconciled with Article III, which later permits Troon designees to issue withdrawals for budgeted items up to $9,000.
16. Inherited-data disclaimer (High Priority).
Troon is not responsible for inaccurate financial statements or homeowner records resulting from inaccurate data supplied by SLCC or the prior manager. Some protection is reasonable, but the clause is too broad. Troon should not be protected once it knew; reasonably should have known; discovered; failed to reconcile; or failed to report the inherited error.
Given the transition, this provision could otherwise become a broad defense to later financial errors.
17. Procurement and vendor compensation (High Financial Risk.
The agreement gives Troon substantial authority over procurement, contract negotiation and vendor supervision while also expressly permitting Troon to receive and retain fees or other compensation from vendors and service providers. The agreement does not establish a dollar or percentage limitation on Troon's vendor compensation or require transaction-specific disclosure of the amount Troon receives.
This creates an inherent potential conflict between Troon's duty to obtain favorable terms for SLCC and Troon's financial interest in vendor relationships from which Troon may receive compensation.
SLCC should require full disclosure of every vendor compensation arrangement, the amount or calculation methodology, the amount attributable to SLCC purchasing, competitive-bid or independent market benchmarking, documented vendor-selection criteria, Board approval above established thresholds, conflict-of-interest disclosure, and audit rights. SLCC should also consider requiring vendor rebates or compensation attributable to SLCC purchasing to be credited to SLCC.
One further issue deserves attention: the agreement's statement that SLCC's signature constitutes advance disclosure and consent to these arrangements is materially different from requiring Troon to disclose each actual payment after it occurs.
This is a major financial-governance concern. Troon can use affiliated/select purchasing programs and retain compensation from vendors, provided SLCC's “net cost” is competitive with arms-length alternatives. SLCC also prospectively consents to those compensation arrangements. This should be modified to require:
full annual disclosure of each vendor payment/rebate;
amount attributable to SLCC purchases;
competitive bids or market benchmarking;
prohibition against selecting an ABC vendor because ABC earns more;
Board approval above thresholds;
audit rights;
preferably, crediting SLCC with rebates attributable to its purchases.
“Competitive” is materially weaker than lowest total cost consistent with required quality and service. Troon’s control over the procurement process raises important governance and fiduciary responsibility questions for the Board. While Troon’s control over this process should reduce the administrative burden on the Board and the Procurement Advisory Committee’s role in the current procurement process, there is nothing indicated a requirement for Troon to seek approval of the procurement process to ensure it was conducted in a manner agreeable to Sun Lakes. Given that Troon will be allowed to retain compensation from vendors it exposes Sun Lakes to unlimited financial risk by bypassing the role of the Financial Advisory Committee (FAC) and the Procurement Advisory Committee (PAC).
18. Insurance administration (High Priority).
Troon merely “shall assist the Board…to assure proper coverage.” For a professional manager administering a large community, responsibilities should be clearer: renewal calendar, certificate tracking, recommendation of limits, claims history, minimum carrier ratings, carrier proposals and notice of gaps.
Also see items 22, 23, and 24 below.
19. Miscellaneous services (Medium)
The “reasonable, necessary and appropriate” catch-all is useful but subjective. Troon is responsible for all Contract/vendor supervision and is expressly assigned negotiation and supervision responsibilities. Comparable-cost analysis only occurs “as requested.” Professional liaison services occur “wherever needed or requested.”
20. Bank accounts (High Priority).
This section provides important protection. SLCC funds must remain in SLCC accounts, may not be commingled, reserve accounts are Board-controlled, and two Board directors must approve electronic reserve transfers. But Troon’s two designees may individually issue withdrawals for budgeted items up to $9,000. Recommend a dual-control mechanism rather than permitting a single Troon employee to initiate and approve a $9,000 payment.
At minimum: the initiator must not be the approver, regardless of amount. That is basic fraud/error control.
21. Indemnification (Medium)
This section is favorable to SLCC compared with many management agreements.
SLCC's indemnity excludes Troon’s negligence, gross negligence, recklessness, willful misconduct and employment claims.
Troon then broadly indemnifies SLCC for:
employment/PAGA claims;
unauthorized ABC acts;
negligence/gross negligence/recklessness/willful misconduct; and
cyber/data/privacy incidents attributable to ABC systems, employees, contractors or vendors.
One improvement: expressly include breach of contract, violation of law, fraud, dishonesty and breach of confidentiality.
22. Troon insurance (High Priority)
Troon must maintain workers' compensation, $2 million EPLI, $1 million crime/employee dishonesty, $2 million/$5 million E&O and $2 million CGL. But note the CGL limitation:
coverage for negligent acts/omissions caused by Troon corporate-level employees only.
That could leave a major gap for onsite employees even though they perform most operational activities. Require Troon’s liability insurance to cover all Troon employees, agents and contractors performing services for SLCC, not merely corporate-level personnel.
23. Insurance imposed on SLCC (High Priority).
SLCC bears the cost of a substantial insurance program: CGL, property, business interruption, D&O, liquor liability where applicable, crime/fidelity, auto, umbrella, pollution and cyber.
Most is reasonable owner insurance. The concern is the interaction with the indemnity and additional-insured provisions. SLCC's insurance is required to be primary and noncontributory to Troon’s insurance, Troon is an additional named insured, and SLCC's insurer waives subrogation rights. This creates significant Risk-Shifting. This should be reviewed closely by SLCC's insurance broker and counsel.
It creates the possibility that SLCC's insurance responds first even where Troon participated in the loss, potentially undermining the economic value of ABC's separate insurance and indemnification.
Seek to change the language stating that SLCC insurance being primary applies only to liabilities for which SLCC is contractually responsible, and does not impair Troon’s indemnification obligations.
24. Troon insurance program (High Priority).
If SLCC buys insurance through Troon’s program, SLCC pays the premiums, but the policy may be written in Troon’s name with SLCC as additional named insured (Inadequate financial risk control). Generally, where SLCC is funding coverage of SLCC property/exposure, SLCC to be the named insured, not merely an additional insured, unless SLCC's broker and counsel determine otherwise.
The agreement merely says it is “anticipated” that Troon's program will produce economies of scale. That is clearly aspirational/best-efforts language, not a savings guarantee. Require competitive comparison with SLCC's independent broker.
25. Security (Medium)
Troon disclaims being an insurer/guarantor of security and disclaims liability for inadequate or ineffective security. The parties merely use “commercially reasonable efforts” to obtain third-party security indemnification. This yet another “best efforts” statement lacking
The saving language is important: Troon remains responsible for supervising security contractors and remains liable for its own negligence/gross negligence/recklessness/willful misconduct. That should absolutely remain.
26. Base management fee Overall Costs (High Priority).
Base fee = $239,653 annually / $19,971.08 monthly, plus $2,500 setup fee, $11,268 annual IT/software fee, reimbursable expenses and onsite payroll. Renewal increases are capped at the lesser of 3% or CPI.
However, the base fee is only a fraction of SLCC's total economic exposure because onsite payroll and numerous expenses are passed through. In addition, there is nothing in the agreement indicating Troon’s anticipated allocation of use of their centralized services or the method they will apply to determine SLCC allocated share. The agreement is lacking an exhibit D and there is no pro forma budget which would reveal, at least, Troon’s estimate of the total budget impact the Troon management services agreement to SLCC. It is impossible to determine whether this agreement will result in any financial benefit over the incumbent provider.
27. 21% payroll burden (High Priority).
SLCC pays actual wages plus 21%, with health insurance and 401(k) matching additionally passed through at actual cost. Rating: Significant Financial Risk.
The agreement says the 21% includes FICA/SUTA/FUTA/workers comp/payroll processing, “some insurance premiums and administration fees.” “Some” is too vague for a fixed 21% markup. A schedule is required to state precisely:
statutory payroll taxes;
workers comp;
insurance;
payroll administration;
corporate overhead;
margin/profit.
Otherwise, SLCC cannot determine whether it is paying both the base management fee and an embedded administrative profit in the payroll burden.
28. Benefit-plan increases (High Priority).
Troon must consult SLCC about benefit changes increasing costs, but SLCC approval is only required if the changes affect SLCC employees rather than all Troon employees in the class. Rating: Financial Risk
Troon can therefore make enterprise-wide benefit decisions that automatically increase SLCC costs. There should be an annual cap or Board-approved staffing budget limiting pass-through increases.
29. Absences and replacement staff (Medium)
The provision prevents charging SLCC for unpaid absence and requires replacements for extended absences. “Extended” should be defined.
30. Audit rights (High Priority).
SLCC can audit actual-cost items, including gross wages, health insurance and 401(k), but the fixed 21% burden itself cannot apparently be audited. This is significant. If Troon says the burden represents payroll-related SLCC currently has no means to request proof or request and audit to appeal.