§486N-10  Preoperative requirements. 
(a)  No health club shall be considered fully operative until substantially all
of the equipment and services listed in accordance with section 486N-9 are
actually available for use by buyers.



(b)  Every health club contract shall provide
that the health club will be fully operative on a specified date no later than
one year after the contract is signed by the buyer.



(c)  If the health club is not fully operative
at the time that the buyer signs the health club contract, the buyer shall have
until midnight of the fifth business day after the day on which the buyer
receives notice by mail that the health club is fully operative to cancel the
contract in accordance with section 486N-6.



(d)  All moneys received by a health club
pursuant to a health club contract prior to the health club being fully
operative shall be placed in an escrow account separate and apart from any
account maintained by or for the health club's personal use or for use in the
construction or operation of the health club or for the payment or benefit of
employees of the health club.



The escrow account shall:



(1)  Be established in a bank, savings and loan
association, or a trust company authorized to do business in the State under an
escrow arrangement or corporation licensed as an escrow depository under
chapter 449.



(2)  Provide that the purpose of the account is to
protect the buyer in the event that the health club fails to be fully operative
within one year following the advancement of any money by the buyer.  Any buyer
who has advanced moneys on deposit in the escrow account may maintain an action
to recover all moneys advanced or may maintain a representative action to close
the account and to release such moneys pro rata to all buyers similarly
situated if such health club facility is not fully operative within one year of
the advancement of any money by the buyer.



(3)  Be closed and released by the escrow agent to the
health club only upon the health club becoming fully operative.



Within fifteen business days of a request in
the State, or thirty days for out-of-state requests, a statement of the escrow
account shall be furnished to buyers who have advanced funds or obligations. [L
1984, c 161, pt of §1; am L 1989, c 202, §4]