§ 5-50-3 - Bonding. - Rhode Island Statutes

SECTION 5-50-3

   § 5-50-3  Bonding. – (a) Prior to the execution of any contract for health club services, everyseller which sells contracts for health club services shall, for eachindividual health club location or facility shall obtain a surety bond in theamount of ten thousand dollars ($10,000) for a facility with less than tenthousand (10,000) square feet of permanently covered non-court sportexercise/aerobic itness area; twenty thousand ($20,000) for facilities betweenten thousand (10,000) square feet and twenty-five thousand (25,000) square feetof permanently covered non-court sport exercise/aerobic itness area; and thirtythousand dollars ($30,000) for facilities with greater than twenty-fivethousand (25,000) square feet of permanently covered non-court sportexercise/aerobic itness area.

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

   (c) This section does not apply to:

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

   (2) Non-profit organizations, weight loss and controlservices which do not provide physical exercise facilities and classes, andwhich do not obligate the customer for more than thirty (30) days, and which donot require an initiation fee as a condition of the contract; or

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