The move, which might mean it's game over for the club - also affects the local netball club.
The Queenstown Lakes District Council, in its termination notice last month, said its deed with the club, going back to 1996, was no longer fit for purpose.
The $350,000 ratepayers had spent upgrading the courts last year, as well as maintenance spending, meant the council intended "for [those] benefits to be enjoyed by the local and wider community", the statement said.
However, in appreciation of the club’s past role as "guardians of the tennis courts for many years", the club could still book the courts every Wednesday night at no cost.
Otherwise, all bookings now have to go through the council-owned Queenstown Events Centre.
Ironically, the move comes as the courts have never been more utilised, much of the growth attributed to after-school programmes run by Wanaka-based former tennis pro and ex-New Zealand Davis Cup captain, Alistair Hunt.
Club president Paul Smart said the club was effectively "homeless" because it no longer had a fixed venue and now had to compete for court time with Joe Bloggs off the street.
"We’re trying to work out what our plan of attack will be regarding booking for it and paying for it as a community club, and that’s the issue — we’re a club with open courts."
He was concerned about the scenario in which someone who had not booked came along and confronted someone who had.
"That’s why we’d prefer the courts to be locked."
The club took legal advice about challenging the council’s decision.
"But the lawyer says they can, and they have, so we just have to suck it up."
Arrowtown-based councillor Lisa Guy said the council’s position was that community facilities should be available for community use, particularly given ratepayers’ substantial investment.
Mr Hunt said he had block-booked court time directly with the council for his after-school programme, at his own cost, but thought it a shame the club could be dismantled.
Having a club to join gave a sense of belonging and community, and in the two years he had been coaching there, the numbers taking lessons had "skyrocketed" from 20 or 30 to more than 100, he said.
However, he understood the council’s point of view.
"They spent an enormous amount of money [refurbishing the courts], but I do think it’s sort of a shame the lease has just terminated when we are there for the good of the community, the kids and trying to build a cool little environment."
By Philip Chandler
