New Hampshire § 358-I-2 - Section 358-I:2 Registration; Surety Bond; Escrow of Deposits.

§ 358-I-2. Section 358-I:2 Registration; Surety Bond; Escrow of Deposits.

I. Any person, corporation, partnership, association, or other entity operating or intending to open or operate a health club within this state shall file a registration statement with the attorney general. Such registration statement shall contain the name and address of the health club; the names and addresses of the officers, directors, and those stockholders who hold in excess of 20 percent of the health club and its parent corporation, if such an entity exists; the type of available facilities; a written list of each piece of equipment and each service which the club has available for use by buyers; approximate size of the health club measured in square feet; whether or not a shower area is provided; type of membership plans to be offered and their cost; and a full and complete disclosure of any completed or pending litigation initiated against the health club and any of its officers or directors within the last 3 years. A new registration statement shall be filed annually by the anniversary date of the filing of the original registration statement. Each registration statement shall be accompanied by a registration fee of $100. Any person failing to file a registration statement within 90 days of the date due shall be subject to an administrative assessment of $1,000. II. Each health club registering pursuant to this chapter shall maintain in the files of the health club a copy of its registration statement filed pursuant to this section. A current registration certificate issued by the bureau of consumer protection and antitrust, department of justice, shall be posted or placed at all times in a conspicuous place and the registration statement shall be made available for inspection by current health club members or prospective purchasers of health club memberships; provided, however, that the addresses of employees need not be disclosed, nor shall the attorney general publicly disclose such addresses except in connection with the prosecution of legal proceedings instituted under this chapter or other provisions of the RSA. III. Except as provided in paragraph IV, each health club registering pursuant to this chapter shall post a surety bond in the amount of $50,000, or the equivalent in cash, marketable securities, letters of credit, or escrow accounts, with the attorney general. The type of bond shall be designated by the attorney general. No surety bond shall be accepted for filing unless it is with a surety company authorized to do business in this state. The surety may cancel the bond at any time upon giving 30 days' written notice to the attorney general. Any person who is damaged by any violation of this chapter, or by the seller's breach of contract for sale or any obligation arising therefrom, may bring an action against the bond or its equivalent to recover damages suffered and any other amounts allowable by law. The attorney general, in any action brought under this chapter or any other applicable provisions of law, may likewise proceed against the bond or its equivalent. In no event shall the aggregate liability of the surety for all claims exceed the bond amount. The attorney general may reduce the amount of the surety bond or its equivalent if a club's membership refund liability warrants such a reduction. IV. The attorney general shall exempt from the bonding requirement set forth in paragraph III any health club that meets any of the following conditions: (a) Provides the attorney general with a statement that the club accepts membership fees on a monthly basis only. (b) Establishes to the satisfaction of the attorney general that its membership refund liability does not exceed $5,000. V. Any seller intending to open or operate a health club within this state and who solicits or accepts membership fees before a club begins operating shall place all such fees in an escrow account and shall identify the date the club is to begin operating. The seller shall provide each member a written receipt for the membership fee and shall provide each member a copy of the contract required under RSA 358-I:3 on or before the date the club begins operating. If the club does not begin operating within 10 days of the date originally identified by the seller, the seller shall notify, within 15 days of the date originally identified by the seller, each member of the new date that the club shall begin operating. If the new date for beginning operations is not within 45 days of the date originally identified by the seller, the seller shall refund the membership fees to the members plus interest. Under no circumstances may a seller hold membership fees in escrow for more than 60 days after the date originally identified by the seller as the date the club would begin operating. A seller may withdraw funds from the escrow account 10 days after the club begins operating. The escrow account required by this paragraph shall be separate from any escrow account required under RSA 358-I:2, III. VI. Any initiation fee shall not exceed 100 percent of an annualized monthly fee.