Be it enacted by the Senate and House of Representatives
in General Court assembled, and by the authority of the same,
SECTION 1. Section 79 of chapter 93 of the General Laws, as appearing in section 1 of chapter 607 of the acts of 1985, is hereby amended by striking out the first paragraph and inserting in place thereof the following paragraph:-
Prior to the execution of any contract for health club services and for a period of five years after initially commencing operation of a health club, every seller which sells contracts for health club services, except weight loss and control services which do not provide physical exercise facilities and classes, and which do not obligate the customer for more than thirty days, and which do not require an initiation fee as a condition of said contract, shall, for each individual health club location or facility, maintain a bond issued by a surety company admitted to do business in the commonwealth. The principal sum of the bond shall be either twenty-five thousand dollars, for each health club location or facility that sells contracts for terms not greater than twenty-four months, or one hundred thousand dollars for each health club location or facility that sells contracts for terms greater than twenty-four months but not greater than thirty-six months, and evidence of such bond shall be filed with the secretary of state within thirty days of its procurement. The bond shall be in favor of the commonwealth for the benefit of any buyer or class of buyers who suffers any loss or damage because a health club facility ceases operation, fails to open or fails to honor a buyer's right to cancel a contract for health club services pursuant to section eighty-two, and who obtains a judgment for said loss or damage which is not satisfied within thirty days of its entry. Said bond shall provide for the surety to pay the amount of such unsatisfied judgment either directly to said buyer or class of buyers or, if the attorney general obtains said judgment on behalf of said buyer or buyers and so directs, then to the attorney general for distribution to said buyers.
SECTION 2. Section 80 of said chapter 93, as so appearing, is hereby amended by striking out the first two paragraphs and inserting in place thereof the following two paragraphs:-
No contract for health club services shall be for a term measured by the life of the buyer. No contract for health club services shall be for a term longer than thirty-six months, except that upon expiration of the contract, the seller may offer to the buyer the right to renew his contract for a similar, shorter or longer period not to exceed thirty-six months.
No contract for health club services shall require payments or financing by the buyer over a period that extends more than one month beyond the expiration of the contract. The installment payments shall be in substantially equal amounts exclusive of the down payment and shall be required to be made at substantially equal intervals, not more frequently than one payment per month.
SECTION 3. The second paragraph of section 82 of said chapter 93, as so appearing, is hereby amended by striking out the last sentence and inserting in place thereof the following sentence:- If you move either your residence or your place of employment more than twenty-five miles from any health club operated by the seller or a substantially similar health club which will accept the seller's obligation under the contract.".