Membership contract impound

Definition

Long-stay contract money a regulator can order held, with the members as its beneficiaries.

Why It Matters

Where a park sells contracts for the right to use its ground for more than thirty days, the money can stop being the operator's to spend. Washington registers those contracts and lets the director impound the sale proceeds, the receivables and the dues where future availability and quiet enjoyment are not otherwise assured. Impounded funds sit beyond the reach of lenders, creditors and a trustee in bankruptcy, with the contract purchasers as a class the beneficiary. Assigning or pledging anything inside an impound needs written approval, and any event with a material effect on the operation or its finances must be filed as an amendment within thirty days.