Up to eight members of its D grade team attending Monash University on student visas were deemed by the association to have breached its playing rule pertaining to Australian residency.

Sandown, which was on top of the ladder, was last week stripped of six points and fined $50.

Under the association's rule 23, only one overseas player can compete in a club's top team. Any additional overseas players must have Australian residency.

The club can now play only one of the students and because it doesn't have enough other eligible players, looked certain to forfeit Saturday's last game against Lynbrook and miss out on the finals.

Sandown president Brenden Lidgerwood said he was considering taking legal action against the decision, and that after nearly 50 years, the club may fold.

"We are considering taking legal action over the residency issue and what qualifies a person to be an Australian resident.

"We want it cleared up because it's non-specific in the association's rules. We didn't realise we were breaking a rule and now we've been advised we have, and it's effectively closed our club.

"The thing was, they [the students] didn't tick that they weren't nonresidents on their registration form. We had no idea."

DDCA president Michael Hawking said it was found that the club had been playing a number of players on student visas, and despite having its only team in D grade, the rule on overseas players still applied.

"Some of these students have played there for three or four years undetected, which probably points to a weakness in our ability to determine such breaches.

"I would suggest that Sandown Park quite honestly considered that the rule did not necessarily apply to them.

"It must be said that when the information that led to this inquiry was received, the informants remarked that they were not wanting to destroy the club but nevertheless wanted something done about it.

"The fact is that this may head in that direction.

"While we will not compromise DDCA rules, we must take into account the impact on a club, particularly when its very existence is in question. Forcing clubs into such a position is certainly not the policy of the DDCA."

Hawking said the rules and permits subcommittee would consider applications for permits to registered players who may have not fulfilled qualifying requirements to assist the club in completing the season.