§ 5-50-3. Bonding. (a) Prior to the execution of any contract for health club services, every seller that sells contracts for health club services shall, for each individual health club location or facility, obtain a surety bond in the amount of ten thousand dollars ($10,000) for a facility with less than ten thousand (10,000) square feet of permanently covered, non-court sport exercise/aerobic/fitness area; twenty thousand ($20,000) for facilities between ten thousand (10,000) square feet and twenty-five thousand (25,000) square feet of permanently covered, non-court sport exercise/aerobic/fitness area; and thirty thousand dollars ($30,000) for facilities with greater than twenty-five thousand (25,000) square feet of permanently covered, non-court sport exercise/aerobic/fitness area.

(b) Proof of bonding must be presented at the time of registration or re-registration.

(c) This section does not apply to:

(1) Any owner/operator in continuous operation in the same location for five (5) years as of January 1, 1998;

(2) Nonprofit organizations, weight loss and control services that do not provide physical exercise facilities and classes and that do not obligate the customer for more than thirty (30) days, and do not require an initiation fee as a condition of the contract; or

(3) A seller that does not require an initiation fee as a condition of a health club contract and whose only type of membership does not exceed thirty (30) days and that posts a conspicuous notice, placed with or near its schedule of rates posted pursuant to § 5-50-8(b) or at its entrances, that the seller is not subject to the bonding requirements of this section.

History of Section. (P.L. 1996, ch. 154, § 1; P.L. 1997, ch. 331, § 1; P.L. 1998, ch. 437, § 1; P.L. 1999, ch. 354, § 15.)