Health club services contract; definitions

4. a. Every contract for health club services shall be in writing. A copy of the written contract shall be given to the buyer at the time the buyer signs the contract. b. A health club services contract shall specifically set forth in a conspicuous manner on the first page of the contract the buyer's total payment obligation for health club services to be received pursuant to the contract. c. A health club services contract of a health club facility which maintains a bond, irrevocable letter of credit or securities, moneys, or other security pursuant to subsection a. of section 3 of this act shall set forth that a bond, irrevocable letter of credit or securities, moneys, or other security is filed or deposited with the Director of the Division of Consumer Affairs to protect buyers of these contracts who are damaged or suffer any loss by reason of breach of contract or bankruptcy by the seller. d. Services to be rendered to the buyer under the contract shall not obligate the buyer for more than three years from the date the contract is signed by the buyer. e. A contract for new or increased health club services may be cancelled by the buyer for any reason at any time before midnight of the third operating day after the buyer receives a copy of the contract. In order to cancel a contract, the buyer shall notify the health club of cancellation by telephone to the health club facility location where the contract was entered into or online, if the contract was entered into online; by regular, registered, or certified mail received within the three-day period, return receipt requested; or personal delivery to the address specified in the contract. All moneys paid pursuant to the cancelled contract shall be fully refunded within 30 days of receipt of the notice of cancellation. If the customer has executed any credit or loan agreement through the health club to pay all or part of health club services, the negotiable instrument executed by the buyer shall also be returned within 30 days. The contract shall contain a conspicuous notice printed in at least 10-point bold-faced type as follows: “NOTICE TO CUSTOMER” You are entitled to a copy of this contract at the time you sign it. You may cancel this contract at any time before midnight of the third operating day after receiving a copy of this contract. If you choose to cancel this contract, you must take any one of the following actions: 1. Send a signed and dated written notice of cancellation by regular, registered, or certified mail, return receipt requested; 2. Personally deliver a signed and dated written notice of cancellation to: ..................................... (Name of health club) ..................................... (Address of health club); 3. Personally place a telephone call to the health club facility location where the agreement was initially entered into; or 4. If you entered into the contract online, use either the direct link on the health club facility's Internet website, the user settings on your smartphone or tablet, or a termination email formatted and provided by the health club facility to cancel the contract online. If you cancel this contract within the three-day period, you are entitled to a full refund of your money. If the third operating day falls on a Sunday or holiday, notice is timely given if it is mailed or delivered as specified in this notice on the next operating day. Refunds must be made within 30 days of receipt of the cancellation notice to the health club. 'Operating day' means any calendar day on which patrons may inspect and use the health club's facilities and services during a period of at least eight hours, except holidays and Sundays." f. A health club services contract shall provide that it is subject to cancellation by telephone or written notice online, if the contract was entered into online; sent by regular, registered, or certified mail, return receipt requested; or personally delivered to the address of the health club specified in the contract upon the buyer's death or permanent disability, if the permanent disability is fully described and confirmed to the health club by a physician. In a cancellation under this subsection, the health club may retain the portion of the total contract price representing the services used plus reimbursement for expenses incurred in an amount not to exceed 10% of the total contract price. g. A health club services contract shall provide that it is subject to cancellation by telephone or written notice online if the contract was entered into online; sent by regular, registered, or certified mail, return receipt requested; or personally delivered to the address of the health club specified in the contract upon the buyer's change of permanent residence to a location more than 25 miles from the health club or an affiliated health club offering the same or similar services and facilities at no additional expense to the buyer. In a cancellation under this subsection, the health club may require proof of the new permanent residence and may retain a prorated share of the total contract price based upon the date the notice was received plus reimbursement for expenses incurred in an amount not to exceed 10% of the total contract price. h. A health club services contract shall provide that if a health club facility is closed for a period longer than 30 days through no fault of the buyer of the health club services contract, the buyer is entitled to either extend the contract for a period equal to that during which the facility is closed or to receive a prorated refund of the amount paid by the buyer under the contract. i. A health club services contract shall not obligate the buyer to renew the contract. A buyer who entered into a health club services contract online shall be provided with the option to terminate the automatic renewal of the health club services contract online through a direct link or button on the health club facility's Internet website. The link or button shall be in a prominent location on the health club facility's Internet website and in clear and conspicuous text. j. If a health club facility is not in existence on the date the contract is executed, the health club services contract shall provide that a buyer of a contract may cancel the contract if the facility is not open for business on a date which shall be set forth in the contract and receive a full refund of any deposit or payment on the contract. k. (1) If a health club facility is to change ownership but the new ownership does not result in contract alterations regarding a decrease in service offerings or increase in price, but does result in a change in the name of the business, upon the ownership transfer, the facility shall notify, by mail or electronically and at least 60 days in advance, and again by mail or electronically and at least 30 days in advance, the buyer of a health club services contract: of a change in ownership of the health club facility; that membership rates and services remain the same; the business name of the facility under new ownership; the date billing under the new business entity begins; and a stipulation that the contract shall not be assigned to the new owner if the buyer of the contract denies, through written, electronic, or in-person communication, assignment of the contract to the new owners seven days before the date billing under the new entity begins in which to nullify the contract. If the buyer of the contract allows the contract to be assigned to the new owners of the health club facility, the buyer shall have up to seven days before the date billing under the new entity begins in which to nullify the contract. If any charges were made against the account of the buyer, including after a buyer requested nullification of a contract but not before the request was made, during the seven-day period before the date billing under the new business entity begins, the health club facility shall have up to 30 days from the receipt of the request for nullification to issue a refund of the charges. (2) If a health club facility is to change ownership and if new ownership results in contract alterations regarding a decrease in service offerings or an increase in membership rates upon ownership transfer, the facility shall notify, by mail or electronically and at least 60 days in advance, and again by mail or electronically and at least 30 days in advance, the buyer of a health club services contract: of a change in ownership; the change in services and, if applicable, the new membership rates and the date when the change in services and new rates take effect; the business name of the facility under new ownership; the date the billing under the new business entity begins; and that the contract shall be assigned to the new owner if the buyer of the contract consents to the transfer through written, electronic, or in-person communication to the health club facility within 30 days of the date of transfer. If the consent is not received by the health club facility within 30 days before the transfer of ownership, the contract will be deemed cancelled. The buyer of the contract shall have up to seven days before the date billing under the new entity begins in which to nullify the assignment of the contract. If any charges were made against the account of the buyer during the seven-day period before the date billing under the new entity begins, including after a buyer requested cancellation of a contract but not before the request was made, the health club facility shall have up to 30 days from the receipt of the request for cancellation to issue a refund of the charges. (3) If a health club facility is to change ownership, the owner of the health club facility shall post a notice, at least 30 days in advance of the transfer in ownership and for 26 days after the transfer in ownership, in a prominent location in the facility with the following information: (a) the name of the new business entity; (b) the date billing under the new entity begins; and (c) that the buyer of the contract may elect to decline or approve to have their contract assigned to the new owner for up to the applicable timeframe as set forth in paragraphs (1) and (2) of this subsection. (4) Paragraphs (1), (2), and (3) of this subsection shall only apply to transfers of ownership and shall not apply to facility closures. l. If there is no change in ownership of a health club facility but the business entity that owns the facility is to change, the facility shall give notice to buyers of a contract with the facility 30 days prior to the change in business entity. m. As used in this section: “Automatic renewal” means a plan or arrangement in which a health club services contract is automatically renewed at the end of a definite term for a subsequent term. “Change in ownership” means a change in the ownership of a health club facility upon completion of a transaction that results in the sale, transfer, assignment, or other disposition of: 1) all or substantially all of the assets of a health club facility; or 2) 51 percent or more of the outstanding equity of a health club facility, whether in memberships, shares of capital stock, or other ownership interests. “Clear and conspicuous” means in larger type than the surrounding text, or in contrasting type, font, or color to the surrounding text of the same size, or set off from the surrounding text of the same size by symbols or other marks, in a manner that clearly calls attention to the language.