I don't play golf. I signed into this site because I live near a golf course, was searching for information related to golf course liability, stumbled upon this thread and thought I may be able to offer some perspective to golfers on this important question. Yes, I'm an attorney, no, this isn't legal advice, it's just my observations, but yes, I have been involved in matters in Maryland concerning golfer and golf course liability. The law varies by state, so my Maryland experience may not apply to you. But I will say that the relevant legal principles here are pretty common.
First, in Maryland and many other states, a person is liable for conditions that he creates on his property that cause physical things to enter upon the property of another. Such things could be water that you've diverted off of your property that floods a neighbor's property, a rivet that flies out of your factory window and into a schoolyard, or a golf ball that sails off your golf course and into a road or neighborhood. A few states have specific laws exempting golf courses, but by and large, golf courses are no different than any other business in this regard. Golf clubs have no special allowance to cause things to leave their property and enter a neighbor's property.
Second, when a golf ball leaves the course's property and enters another property, that is a trespass regardless of whether that was a mistake. People who cause a trespass are liable for the trespass. This can be true of the trespasser (the golfer) or an aider and abettor, such as a golf club that was on notice that its golfers regularly hit golf balls onto neighboring property yet continued to allow golf play to proceed as usual.
Third, "assumption of the risk" is typically not a defense to trespass. Simply put, assumption of the risk does not trump property rights. Even if the golf course were built before the road or housing development next door, that fact, alone, does not entitle the club to property rights over adjoining land in the form of some buffer easement where errant balls are allowed to fall. We wouldn't want such a rule. Otherwise, each time you buy property, you would first have to determine whether your neighbors had tended to use your property as some sort of buffer zone for their rifle range, as a place where rivets land when the thing they're manufacturing explodes, or as an undocumented dump where they take their tree trimmings. It would provide perverse incentives for individuals and businesses to trespass, since they could then gain dominion over other people's property. Only in extreme cases, under adverse possession and similar laws, is that ever allowed.
And with golf courses, the balls often damage homes that are not even next to the course, but on the other side of a road, whose owners can't even see the course. Just how far would we demand this zone of enhanced golf course buffer intrusion extend? In short, if a golf club needs a larger buffer, it should offer to buy neighboring property at fair market value, not get it for free under an assumption of the risk theory.
Finally and perhaps most importantly, people tend to live along golf courses because they either play golf or just like the view. Golf clubs benefit by having nearby, dedicated clientele, or folks who just keep an eye on the course after hours. Part of my involvement in this issue has been talking with community associations and golf clubs about working to mutually resolve these liability problems. It is unrealistic for a golf club to absolve itself of all responsibility, or from a duty to take measures to reduce particular problem areas where neighboring property is routinely damaged.
At the same time, however, if neighbors truly want zero risk of damage, or full compensations for each and every incident, then the golf course that they supposedly love will probably be forced to close down and be replaced by something less bucolic. One middle ground is for the club and the neighbors to come to an agreement limiting club liability to a certain, reasonable amount each year (to be held in escrow by the club), and accessed by neighbors in accordance with some priority system set up by the community association or neighborhood coalition. Often, such a pool of money can be established by the club for pennies per tee time, or a few dollars per member.
The advantage to the club is that such an agreement typically absolves its individual members of liability (absent intentional acts), which can be an attractive selling point, and makes its own liability limits more certain. The advantage to neighbors is that replaces the need to chase down individuals golfers or fight with the club/insurers over each instance, and also allows the club to continue functioning economically.
Sorry for the long post, but my hope is that this helps provide some helpful food for thought on the issue from someone who has experienced it.