CHAPTER 420

HEALTH CLUBS

Table of Contents

Sec. 21a-216. (Formerly Sec. 19-341a). Definitions.

Sec. 21a-217. (Formerly Sec. 19-341b). Contracts for health club services. Right of cancellation.

Sec. 21a-218. (Formerly Sec. 19-341c). Statement of buyer’s rights. Form. Buyer’s cancellation. Seller’s written confirmation. Buyer’s disability. Refunds.

Sec. 21a-219. (Formerly Sec. 19-341d). Term of contract. Renewal.

Sec. 21a-220. (Formerly Sec. 19-341e). Negotiable promissory notes to be clearly identified. Buyer’s rights upon sale or discount. Time period for payment.

Sec. 21a-221. (Formerly Sec. 19-341f). Listing of equipment and services.

Sec. 21a-222. (Formerly Sec. 19-341g). Right of action. Remedies.

Sec. 21a-223. (Formerly Sec. 19-341h). License required. Fee. Renewal. Sanitary facilities. Suspension or revocation of license.

Sec. 21a-224. (Formerly Sec. 19-341i). Regulations.

Sec. 21a-225. (Formerly Sec. 19-341j). Construction of chapter.

Sec. 21a-226. Connecticut Health Club Guaranty Fund.

Sec. 21a-227. Health club closings. Electronic monitoring of sales presentations.

Secs. 21a-228 to 21a-230. Reserved


Sec. 21a-216. (Formerly Sec. 19-341a). Definitions. As used in this chapter:

(1) “Health club” means any corporation, partnership, unincorporated association or other business enterprise offering facilities for the preservation, maintenance, encouragement or development of physical fitness or well-being in return for the payment of a fee entitling the buyer to the use of such facilities. Such term includes, but is not limited to, “health spas”, “sports and health clubs”, “tennis clubs”, “racquet ball courts”, “golf clubs”, “platform tennis clubs”, “gymnasiums”, “figure salons”, “health studios”, “weight control studios”, and any organization primarily operated for the purpose of teaching a particular form of self-defense or martial art, such as judo, karate or kung fu, but shall not include any establishment from which a buyer may only purchase or become obligated to purchase services to be rendered for a period of not more than one month and which does not collect more than one month’s payment in advance of the rendering of such services, nonprofit organizations, any massage establishment, any private club owned and operated by its members or any facility operated by the state or any of its political subdivisions.

(2) “Business day” means any day except a Sunday or a legal holiday.

(3) “Health club contract” means an agreement by which a buyer is entitled to membership in a health club or use of the facilities of a health club. All health club contracts shall be in writing.

(4) “Buyer” means a person who enters into, or receives the benefit of, a health club contract.

(5) “Services actually received” includes any period during which the facilities of the health club are available to the buyer pursuant to the health club contract whether or not the buyer makes use of the facilities, except when the consideration paid for the health club contract is determined by the number of times the buyer makes use of the health club facilities. The facilities shall not be deemed to be available to the buyer if the buyer fails to make use of the health club facilities in reliance upon a statement or representation of an officer, employee or agent of the health club which would reasonably lead the buyer to conclude that his contract had been cancelled or that the facilities were not actually available for use by the buyer.

(6) “Disabled” and “disability” mean a condition which has existed or will exist for more than forty-five days which prevents a buyer from utilizing the health club to the same extent he utilized it before commencement of such condition.

(7) “Payment in advance” includes, but is not limited to, the payment of all service fees, initiation fees, application fees, maintenance fees or similar fees.

(P.A. 76-262, S. 1; P.A. 77-585, S. 1; P.A. 77-614, S. 323, 610; P.A. 82-50, S. 1, 4; P.A. 83-487, S. 30, 33; P.A. 84-531, S. 1; P.A. 05-158, S. 1.)

History: P.A. 77-585 specifically included organizations primarily operated for teaching particular forms of self-defense in the definition of “health club” where previously they had been specifically excluded, added provision in Subdiv. (5) clarifying when facilities not deemed available to the buyer and added Subdiv. (6) defining “disabled” and “disability”; P.A. 77-614 replaced commissioner of health with commissioner of health services, effective January 1, 1979; P.A. 82-50 redefined “health club” to include various types of sports clubs and martial art organizations; Sec. 19-341a transferred to Sec. 21a-216 in 1983; P.A. 83-487 amended Subdiv. (1) to eliminate reference to regulation and licensure of massage establishments by health services commissioner; P.A. 84-531 removed saunas from the definition of a health club, excluded from such definition an establishment from which a customer may only purchase services for no more than 30 days, required all contracts to be in writing, included within the definition of buyer any person who receives the benefit of a contract, defined “payment in advance” and redefined “disabled” to include conditions which “will exist” for more than 45 days; P.A. 05-158 amended Subdiv. (1) to change time reference from 30 days to one month and make a technical change, effective July 1, 2005.

Sec. 21a-217. (Formerly Sec. 19-341b). Contracts for health club services. Right of cancellation. Every contract for health club services shall provide that such contract may be cancelled within three business days after the date of receipt by the buyer of a copy of the contract, by written notice delivered by certified or registered United States mail to the seller or the seller’s agent at an address which shall be specified in the contract. After receipt of such cancellation, the health club may request the return of contract forms, membership cards and any and all other documents and evidence of membership previously delivered to the buyer. Cancellation shall be without liability on the part of the buyer, except for the fair market value of services actually received and the buyer shall be entitled to a refund of the entire consideration paid for the contract, if any, less the fair market value of the services or use of facilities already actually received. Such right of cancellation shall not be affected by the terms of the contract and may not be waived or otherwise surrendered. Such contract for health club services shall also contain a clause providing that if the person receiving the benefits of such contract relocates further than twenty-five miles from a health club facility operated by the seller or a substantially similar health club facility which would accept the seller’s obligation under the contract, or dies during the membership term following the date of such contract, or if the health club ceases operation at the location where the buyer entered into the contract, the buyer or his estate shall be relieved of any further obligation for payment under the contract not then due and owing. The contract shall also provide that if the buyer becomes disabled during the membership term, the buyer shall have the option of (1) being relieved of liability for payment on that portion of the contract term for which he is disabled, or (2) extending the duration of the original contract at no cost to the buyer for a period equal to the duration of the disability. The health club shall have the right to require and verify reasonable evidence of relocation, disability or death. In the case of disability, the health club may require that a doctor’s certificate be submitted as verification and may also require in such contract that the buyer submit to a physical examination by a doctor agreeable to the buyer and the health club, the cost of which examination shall be borne by the health club.

(P.A. 76-262, S. 2; P.A. 77-585, S. 2; P.A. 84-531, S. 2; P.A. 05-158, S. 2.)

History: P.A. 77-585 removed references to “permanent” disability and added special provision specifically stating courses of action open to buyers who become disabled and included in contracts; Sec. 19-341b transferred to Sec. 21a-217 in 1983; P.A. 84-531 required a contract to include a provision providing that a buyer is relieved of further payment if a health club ceases operation at the location where the buyer entered into the contract; P.A. 05-158 provided that written notice of cancellation may be mailed to seller’s agent and made a technical change, effective July 1, 2005.

Sec. 21a-218. (Formerly Sec. 19-341c). Statement of buyer’s rights. Form. Buyer’s cancellation. Seller’s written confirmation. Buyer’s disability. Refunds. (a) A copy of the health club contract shall be delivered to the buyer at the time the contract is signed. All health club contracts shall be in writing and signed by the buyer, shall designate the date on which the buyer actually signs the contract, shall identify the address of the location at which the buyer entered the contract and shall contain a statement of the buyer’s rights which complies with this section. The statement must: (1) Appear in the contract under the conspicuous caption: “BUYER’S RIGHT TO CANCEL”, and (2) read as follows:

“If you wish to cancel this contract, you may cancel by mailing a written notice by certified or registered mail to the address specified below. The notice must say that you do not wish to be bound by this contract and must be delivered or mailed before midnight of the third business day after you sign this contract. After you cancel, the health club may request the return of all contracts, membership cards and other documents of evidence of membership. The notice must be delivered or mailed to:

....

....

(Insert name and mailing address for cancellation notice.)

You may also cancel this contract if you relocate your residence further than twenty-five miles from any health club operated by the seller or from any other substantially similar health club which would accept the obligation of the seller. This contract may also be cancelled if you die, or if the health club ceases operation at the location where you entered into this contract. If you become disabled, you shall have the option of (1) being relieved of liability for payment on that portion of the contract term for which you are disabled, or (2) extending the duration of the original contract at no cost to you for a period equal to the duration of the disability. You must prove such disability by a doctor’s certificate, which certificate shall be enclosed with the written notice of disability sent to the health club. The health club may require that you be examined by another physician agreeable to you and the health club at its expense. If you cancel, the health club may keep or collect an amount equal to the fair market value of the services or use of facilities you have already received.”

The full text of this statement shall be in ten-point bold type.

(b) If a buyer cancels a health club contract pursuant to the three-day cancellation provision or as a result of having moved further than twenty-five miles, or as a result of the health club ceasing operation at the location where the buyer entered into the contract as provided by this chapter, the health club shall send the buyer a written confirmation of cancellation within fifteen days after receipt by the health club of the buyer’s cancellation notice. If the health club fails to send such written notice to the buyer within fifteen days, the health club shall be deemed to have accepted the cancellation.

(c) (1) If the buyer notifies the health club that he has become disabled, the health club shall notify the buyer in writing within fifteen days of receipt by the health club of the buyer’s notice of disability and any doctor’s certificate which may be required under subsection (a) of this section that: (A) The health club will not require the buyer to submit to another physical examination; or (B) the health club requires the buyer to submit to another physical examination and that the buyer’s obligations under the contract are suspended pending determination of disability. If the health club fails to send such written notice to the buyer within fifteen days, the health club shall be deemed to have accepted the disability.

(2) If the health club requires the buyer to submit to another physical examination, all obligations of the buyer for payment under the contract will be suspended as of the date the health club receives notice of disability. The buyer’s obligations will not resume until such time as a determination is made, either by consent of the buyer and the health club or through adjudicative proceedings, that disability does not exist.

(d) A buyer who is disabled may, at the buyer’s option, extend the duration of the original contract at no cost to the buyer for a period equal to the duration of the disability, or remain liable for partial payment on the contract as follows:

(1) A buyer who is disabled for a period less than the full remaining term of the contract shall only be liable for a pro-rata portion of the contract price equal to the total number of weeks specified in the contract less the number of weeks after the date on which the disability first occurred, the difference being divided by the total number of weeks specified in the contract and the result of that division being multiplied by the total contract price.

(2) A buyer who is disabled for the full remaining term of the contract shall only be liable for a pro-rata portion of the contract price equal to the number of complete weeks before the date the disability first occurred for which the services or facilities were made available to the buyer divided by the total number of weeks specified in the contract with the result being multiplied by the total contract price.

(3) If the reasonable probabilities are that the buyer will be disabled for the full remaining term of the contract, and the buyer has elected not to extend the duration of the contract as provided in this subsection, the health club shall cancel the buyer’s contract at the time such a determination is made and notify the buyer in writing that the contract has been cancelled.

(4) Any money paid by the buyer which is in excess of the amount for which he is liable under the provisions of this section shall be refunded by the seller to the buyer.

(5) A health club which received notice of disability from a buyer shall provide such buyer with a written form which shall fully explain the buyer’s options as set forth in this subsection. Such form shall provide on it a location where the buyer shall indicate in writing the option he has chosen. Such form shall be signed by the buyer and the health club.

(e) In any cancellation of a health club service contract the buyer shall not be liable for any payment to the seller if the services received by the buyer are as a result of a representation by the health club to the buyer that such services are to be received free or if the buyer received services at a health club as a result of a representation by the health club to the buyer that such services are to be received at a reduced or discount price, the buyer shall only be liable as a result of his cancellation for an amount equal to that which was represented to the buyer that he would have to pay.

(f) Any refund to the buyer as a result of cancellation of the contract shall be delivered by the health club to the buyer within fifteen business days of receipt by the health club of the notice of cancellation.

(P.A. 76-262, S. 3; P.A. 77-585, S. 3; P.A. 84-531, S. 3; P.A. 05-158, S. 3.)

History: P.A. 77-585 changed wording of buyer’s rights statement, required that statement be in ten-point bold type and added Subsecs. (b) to (f); Sec. 19-341c transferred to Sec. 21a-218 in 1983; P.A. 84-531 made cessation of operation at the location where the customer entered into a contract grounds for cancellation of the contract, and specified the date from which a pro rata portion of the contract price is calculated as “the date the disability first occurred” rather then the date of “the commencement of disability”; P.A. 05-158 amended Subsec. (a) to provide that contracts shall identify the address of the location at which the buyer entered the contract and to provide that the statement of the buyer’s rights shall include the address to which the buyer may mail cancellation notice, effective July 1, 2005.

Sec. 21a-219. (Formerly Sec. 19-341d). Term of contract. Renewal. (a) No health club contract shall have a term for a period longer than twenty-four months. If a health club offers a contract of more than twelve months’ term, it shall offer a twelve-month contract. If a health club sells a membership contract of more than twelve months’ term, the health club shall not collect payment, in cash or its equivalent of more than fifty per cent of the entire consideration for the contract in advance of rendering services. The remainder of the cost of the contract shall be collected by the health club on a pro rata monthly basis during the term of the health club contract. Each contract shall have the prices for all contracts printed thereon.

(b) No contract shall contain an automatic renewal clause except for a renewal for a period not to exceed one month. If such contract contains such a one-month automatic renewal clause, such renewal shall become effective only upon payment of the renewal price and such contract shall permit the buyer to cancel any further renewal upon no more than one month’s notice. The price of any such renewal shall not increase or decrease unless the contract: (1) Discloses the amount of such increase or decrease or the method of calculating such increase or decrease in the price of such renewal, or (2) such information is otherwise provided to the buyer, in writing, no less than one month prior to such renewal. Any renewal option for continued membership must be accepted by the buyer in writing, by electronic mail or facsimile and shall become effective only upon payment of the renewal price.

(c) Each health club shall post the prices and the three-day cancellation provisions, the disability provisions and the twenty-five mile moving provisions of all contracts in a conspicuous place where the contract is entered into.

(P.A. 76-262, S. 4; P.A. 77-585, S. 4; P.A. 78-116, S. 2; P.A. 84-531, S. 4; P.A. 90-96, S. 4; P.A. 05-158, S. 4.)

History: P.A. 77-585 added posting of three-day cancellation provisions, disability provisions and 25-mile moving provisions of contracts and required posting “where the contract is entered into” rather than “on the health club’s premises”, replaced 3-year, 2-year and 1-year contracts with contracts of more than 24 months’ duration, of 24 months and 12 months and added provision re renewals; P.A. 78-116 required offer of 12-month contract if contract longer than that is offered, replacing provision that 12-month contract be offered if a contract of more than 12 months’ duration and less than 24 months’ duration is offered; Sec. 19-341d transferred to Sec. 21a-219 in 1983; P.A. 84-531 changed the outer limit of a health club contract from 36 to 24 months; P.A. 90-96 divided section into Subsecs., prohibited the advance payment of over 50% of the cost of the contract under some circumstances and moved provision re posting of various contract provisions from Subsec. (a) to Subsec. (c); P.A. 05-158 amended Subsec. (a) to change “duration” to “term” and prohibit health club from collecting payment, in cash, or its equivalent of more than 50% of the entire consideration for the contract in advance of rendering services if health club sells a membership contract of more than 12 months’ term, and amended Subsec. (b) to add provisions re 1-month automatic renewal clause and renewal price, to permit acceptance of renewal option by electronic mail or facsimile and to change “may” to “shall” re effectiveness of such option upon payment of renewal price, effective July 1, 2005.

Sec. 21a-220. (Formerly Sec. 19-341e). Negotiable promissory notes to be clearly identified. Buyer’s rights upon sale or discount. Time period for payment. If the buyer’s obligation is in the form of a negotiable promissory note, such contract shall state in boldface type on the face page of said contract that the buyer’s promissory note may be discounted and sold to third parties to whom the buyer will become obligated to make full payment. The selling or discounting of a negotiable promissory note which represents the buyer’s obligation under a health club service contract shall not affect the right of the buyer to cancel the contract, the method by which cancellation may be made, or the buyer’s rights under section 52-572g or Section 433.1 et seq. of Title 16 of the Code of Federal Regulations, as they may from time to time be amended. When a buyer’s obligation is in the form of a promissory note, the time period for payment of the note shall not exceed the term of the health club contract.

(P.A. 76-262, S. 5; P.A. 77-585, S. 5; P.A. 90-96, S. 5; P.A. 05-158, S. 5.)

History: P.A. 77-585 added provision protecting buyers’ rights despite selling or discounting of negotiable promissory note; Sec. 19-341e transferred to Sec. 21a-220 in 1983; P.A. 90-96 added provision limiting the time period for payment when buyer’s obligation is in the form of a promissory note; (Revisor’s note: In 1997 a reference to “bold-faced” type was replaced editorially by the Revisors with “boldface” type for consistency with customary statutory usage); P.A. 05-158 changed “duration of the health club contract” to “term of the health club contract”, effective July 1, 2005.

Sec. 21a-221. (Formerly Sec. 19-341f). Listing of equipment and services. A health club which intends to commence the sale of health club contracts, shall, prior to commencing sale, compile a written list of the equipment and each service which it intends to have available for use by buyers at the time of commencing such sale and shall submit a copy of the list to the Commissioner of Consumer Protection. Such list, as may be updated from time to time, shall be included in any health club contract. No health club shall be considered fully operative or established until substantially all of the equipment and services so listed are actually available for use by buyers. Each individual place of business of each health club shall be fully operative or established prior to commencing the sale of health club contracts.

(P.A. 76-262, S. 6; P.A. 77-585, S. 6; P.A. 82-50, S. 2, 4; P.A. 83-292, S. 1, 3; P.A. 84-531, S. 5; June 30 Sp. Sess. P.A. 03-6, S. 146(c); P.A. 04-189, S. 1; P.A. 05-158, S. 6.)

History: P.A. 77-585 replaced previous provision re permits for preopening sales campaigns with wholly new provisions requiring listing of equipment and services and expanding provisions re preopening sales campaigns; P.A. 82-50 amended Subsec. (b) by specifically requiring owners of more than one health club to obtain a preopening sales permit for each establishment; Sec. 19-341f transferred to Sec. 21a-221 in 1983; P.A. 83-292 amended Subsec. (a) to apply to any health club intending to commence sale of health club contracts, where prior law applied to any health club which had not previously sold health club contracts; P.A. 84-531 required health clubs to submit a list of equipment and services to the commissioner and to include such list in each health club contract and eliminated provisions which had allowed preopening sales permits; June 30 Sp. Sess. P.A. 03-6 replaced Commissioner of Consumer Protection with Commissioner of Agriculture and Consumer Protection, effective July 1, 2004; P.A. 04-189 repealed Sec. 146 of June 30 Sp. Sess. P.A. 03-6, thereby reversing the merger of the Departments of Agriculture and Consumer Protection, effective June 1, 2004; P.A. 05-158 changed requirement from a written list of “each piece of” equipment to a written list of “the” equipment and each service that health club intends to have available for use by buyers at the time of commencing sale of contracts and added provision re update of list from time to time, effective July 1, 2005.

Sec. 21a-222. (Formerly Sec. 19-341g). Right of action. Remedies. (a) Any buyer of a health club contract which is in material violation of this chapter has a right to cancel the contract and a right of action against the health club for recovery of triple the amount actually paid to the health club under the contract. In addition to any judgment awarded to the buyer, the court may allow reasonable attorney’s fees.

(b) A violation of any of the provisions of this chapter shall be deemed an unfair or deceptive trade practice under subsection (a) of section 42-110b.

(P.A. 76-262, S. 7; P.A. 84-531, S. 6.)

History: Sec. 19-341g transferred to Sec. 21a-222 in 1983; P.A. 84-531 added Subsec. (b) which provides that violation of any provision of chapter is an unfair or deceptive trade practice.

Cited. 231 C. 707.

Sec. 21a-223. (Formerly Sec. 19-341h). License required. Fee. Renewal. Sanitary facilities. Suspension or revocation of license. (a) Each individual place of business of each health club shall obtain a license from the Department of Consumer Protection prior to the sale of any health club contract. Application for such license shall be made on forms provided by the Commissioner of Consumer Protection and said commissioner shall require as a condition to the issuance and renewal of any license obtained under this chapter (1) that the applicant provide for and maintain on the premises of the health club sanitary facilities; (2) that the application be accompanied by (A) a license or renewal fee of two hundred fifty dollars, (B) a list of the equipment and each service which the applicant intends to have available for use by buyers during the year of operations following licensure or renewal, and (C) two copies of each health club contract which the applicant is currently using or intends to use; and (3) compliance with the requirements of section 21a-226. Such licenses shall be renewed annually. The commissioner may impose a civil penalty of not more than three hundred dollars against any health club that continues to sell or offer for sale health club contracts for any location but fails to submit a license renewal and license renewal fee for such location not later than thirty days after such license’s expiration date.

(b) No health club shall (1) engage in any act or practice which is in violation of or contrary to the provisions of this chapter or any regulation adopted to carry out the provisions of this chapter, including the use of contracts which do not conform to the requirements of this chapter, or (2) engage in conduct of a character likely to mislead, deceive or defraud the buyer, the public or the commissioner. The Commissioner of Consumer Protection may refuse to grant or renew a license to, or may suspend or revoke the license of, any health club which engages in any conduct prohibited by this chapter.

(c) If the commissioner refuses to grant or renew a license of any health club, the commissioner shall notify the applicant or licensee of the refusal, and of his right to request a hearing within ten days from the date of receipt of the notice of refusal. If the applicant or licensee requests a hearing within ten days, the commissioner shall give notice of the grounds for his refusal and shall conduct a hearing concerning such refusal in accordance with the provisions of chapter 54 concerning contested matters.

(d) The Attorney General at the request of the Commissioner of Consumer Protection is authorized to apply in the name of the state of Connecticut to the Superior Court for an order temporarily or permanently restraining and enjoining any health club from operating in violation of any provision of this chapter.

(P.A. 76-262, S. 8; P.A. 77-585, S. 7; P.A. 78-116, S. 1; P.A. 82-50, S. 3, 4; P.A. 83-292, S. 2, 3; P.A. 84-531, S. 7; P.A. 94-36, S. 31, 42; June 30 Sp. Sess. P.A. 03-6, S. 146(c), (d); P.A. 04-169, S. 17; 04-189, S. 1; P.A. 05-158, S. 7; June Sp. Sess. P.A. 09-3, S. 287.)

History: P.A. 77-585 deleted obsolete reference to obtaining license “on or before November 1, 1976”, required as condition of licensure maintenance of sanitary facilities and added Subsecs. (b) and (c) re refusal, suspension or revocation of license and re court orders; P.A. 78-116 deleted reference to shower facilities in Subsec. (a); P.A. 82-50 amended Subsec. (a) by specifically requiring owners of more than one health club to obtain a license for each establishment; Sec. 19-341h transferred to Sec. 21a-223 in 1983; P.A. 83-292 added bond requirement for issuance or renewal of license; P.A. 84-531 specified, in Subsec. (a), that health clubs must be licensed before they sell any contracts, deleted provisions re posting of surety bond, added exception to $200 fee for clubs commencing operation after April first, required that license applications be accompanied by a list of equipment and services and required compliance with Sec. 21a-226, amended Subsec. (b) to prohibit violation of chapter provisions and associated regulations and to prohibit conduct likely to mislead, deceive or defraud buyers, added Subsec. (c) re procedure for notification of refusal to grant or renew license, relettering former Subsec. (c) as (d) and substituting reference to court orders to prevent health clubs from violating chapter provisions rather than to prevent them from operating without license or preopening sales permit; P.A. 94-36 amended Subsec. (a) to eliminate prorated license application fees and the “October first” license renewal date, effective January 1, 1995; June 30 Sp. Sess. P.A. 03-6 and P.A. 04-169 replaced Commissioner and Department of Consumer Protection with Commissioner and Department of Agriculture and Consumer Protection, effective July 1, 2004; P.A. 04-189 repealed Sec. 146 of June 30 Sp. Sess. P.A. 03-6, thereby reversing the merger of the Departments of Agriculture and Consumer Protection, effective June 1, 2004; P.A. 05-158 amended Subsec. (a) to change requirement from a list of “each piece of” equipment to a list of “the” equipment in Subdiv. (2)(B) and to authorize commissioner to impose a civil penalty against any health club that fails to submit a license renewal for a health club location for which health club contracts are sold or offered for sale, and made a technical change in Subsec. (b), effective July 1, 2005; June Sp. Sess. P.A. 09-3 amended Subsec. (a)(2)(A) to increase license or renewal fee from $200 to $250.

See Sec. 21a-10(b) re staggered schedule for license renewals.

Sec. 21a-224. (Formerly Sec. 19-341i). Regulations. The Commissioner of Consumer Protection shall adopt regulations in accordance with chapter 54 to carry out the provisions of this chapter.

(P.A. 76-262, S. 9; June 30 Sp. Sess. P.A. 03-6, S. 146(c); P.A. 04-189, S. 1.)

History: Sec. 19-341i transferred to Sec. 21a-224 in 1983; June 30 Sp. Sess. P.A. 03-6 replaced Commissioner of Consumer Protection with Commissioner of Agriculture and Consumer Protection, effective July 1, 2004; P.A. 04-189 repealed Sec. 146 of June 30 Sp. Sess. P.A. 03-6, thereby reversing the merger of the Departments of Agriculture and Consumer Protection, effective June 1, 2004.

Sec. 21a-225. (Formerly Sec. 19-341j). Construction of chapter. Nothing contained in this chapter shall be construed as a limitation upon the power or authority of the state, the Attorney General or the commissioner to seek administrative, legal or equitable relief as provided by other statutes or at common law.

(P.A. 77-585, S. 8.)

History: Sec. 19-341j transferred to Sec. 21a-225 in 1983.

Sec. 21a-226. Connecticut Health Club Guaranty Fund. (a) The Commissioner of Consumer Protection shall establish and maintain the Connecticut Health Club Guaranty Fund in accordance with the provisions of this section.

(b) Any health club which receives a license pursuant to section 21a-223 shall pay a fee of five hundred dollars annually to the guaranty fund except that a health club operated primarily for the purpose of teaching particular forms of self-defense or martial arts that has annual gross revenues of less than one hundred thousand dollars shall pay one hundred dollars annually to the guaranty fund.

(c) Payments received under subsection (b) of this section shall be credited to the guaranty fund whenever the fund balance is less than three hundred fifty thousand dollars. Money in the fund may be invested or reinvested in the same manner as funds of the state employees retirement system, and the interest derived from such investments shall be credited to the guaranty fund whenever the fund balance is less than three hundred fifty thousand dollars. Any such payments or interest not deposited in the guaranty fund shall be credited to the General Fund.

(d) If a health club is no longer in operation at the location where the buyer entered into the contract, the buyer having a claim against said health club may apply to the commissioner for payment of such claim from the guaranty fund, if the claim arises from (1) failure to provide services, (2) failure to comply with its contract obligations, (3) failure to remain open for the duration of its contracts, or (4) failure to comply with any provision of this chapter. Such claim may be filed if the health club fails to make payment of such claim.

(e) The commissioner shall provide forms for applications by buyers for payment from the guaranty fund. The application shall include the name and address of the health club, the beginning and ending date of the contract, the price of the contract, the date of the closing of the health club, the amount and the basis of the claim and a copy of the contract or other proof of membership deemed suitable by the commissioner. No application for a payment from the guaranty fund shall be accepted by the commissioner more than six months after the date of the closing of the location of the health club where the buyer entered into the contract.

(f) The commissioner shall proceed upon such application and shall hold a hearing in accordance with the provisions of chapter 54. Notwithstanding the provisions of chapter 54, the decision of the commissioner shall be final with respect to the application. The commissioner may hear applications of all buyers submitting claims against a single health club in one proceeding.

(g) After hearing, the commissioner shall issue an order requiring payment from the guaranty fund of any sum he finds to be payable upon such application. The total compensation payable from the guaranty fund on the closing of any one health club location shall not exceed seventy-five thousand dollars.

(h) If the commissioner pays any amount as a result of a claim against a health club pursuant to an order under subsection (g) of this section, the health club shall not be eligible to receive a new or renewed license until it has repaid such amount in full, plus interest at a rate to be determined by the commissioner.

(i) If the commissioner pays any amount as a result of a claim against a health club pursuant to an order under subsection (g) of this section, the commissioner shall determine if the health club is possessed of real or personal property or other assets, liable to be sold or applied in satisfaction of the claim on such fund. If the commissioner discovers any such assets, he may request that the Attorney General take any action necessary for the realization thereof for the reimbursement of the guaranty fund.

(j) The commissioner may, in order to preserve the integrity of the guaranty fund, order payments to be made out of said fund for amounts less than the actual loss incurred by any buyer of a health club contract.

(k) When the commissioner has caused any sum to be paid from the guaranty fund to a buyer who has entered into a health club contract, the commissioner shall be subrogated to all of the rights of the buyer up to the amount paid, and the buyer shall assign all of his right, title, and interest in the claim up to such amount to the commissioner, and any amount and interest recovered by the commissioner on the claim shall be deposited to the guaranty fund, except as provided in subsection (c) of this section.

(l) Notwithstanding any provision of the general statutes to the contrary, the commissioner may prohibit a health club from making payments to the Connecticut Health Club Guaranty Fund if, in the opinion of the commissioner, the health club within the past five years has engaged in any unfair or deceptive trade practices under subsection (a) of section 42-110b, has engaged in any conduct of a character likely to mislead, deceive or defraud the buyer, the public or the commissioner, or has violated any of the provisions this chapter. If the commissioner determines that a health club should be prohibited from making payments to the Connecticut Health Club Guaranty Fund the department shall mail a notice by certified mail to the principal place of business of the health club and shall state the grounds for the contemplated action. Within fourteen days of receipt of the notice, the health club may file a written request for a hearing. If a hearing is requested such hearing shall be conducted in accordance with the provisions of chapter 54.

(m) Each health club which has been prohibited from making payments to the Connecticut Health Club Guaranty Fund shall furnish the commissioner with a guaranty bond satisfactory to the commissioner in a sum equal to one hundred twenty-five thousand dollars and shall obtain a certificate from the department that the requirements of this subsection have been met. If a health club is no longer in operation at the location where the buyer entered into the contract, the buyer having a claim against the health club may apply to the commissioner for payment of such claim from the guaranty bond, if the claim arises from (1) failure to provide services, (2) failure to comply with its contract obligations, (3) failure to remain open for the duration of its contracts, or (4) failure to comply with any provision of this chapter. Such claim may be filed if, within thirty days after the buyer gives notice of the claim to the health club, the health club fails to make payment of such claim.

(n) The commissioner may adopt regulations in accordance with chapter 54 to carry out the purposes of this section.

(P.A. 84-531, S. 8; P.A. 88-179, S. 1–3; P.A. 90-96, S. 1; P.A. 95-135, S. 1; 95-219; P.A. 02-82, S. 4; June 30 Sp. Sess. P.A. 03-6, S. 146(c); P.A. 04-189, S. 1.)

History: P.A. 88-179 amended Subsec. (b) to increase fee from $300 to $500 and amended Subsec. (j) to provide for less than full payments from the fund in order to preserve its integrity if the commissioner determines that that is necessary; P.A. 90-96 made technical changes to Subsec. (c), increased the total compensation payable from the guaranty fund from $50,000 to $75,000 in Subsec. (g) and added new Subsecs. (l) and (m) re commissioner’s power to prohibit health clubs from making payments to guaranty fund and re submission of guaranty bonds, relettering former Subsec. (l) as (n); P.A. 95-135 amended Subsec. (d) to delete thirty-day waiting period to file claim; P.A. 95-219 amended Subsec. (b) to reduce fee to $100 annually for certain health clubs operated primarily for teaching self-defense or martial arts; P.A. 02-82 amended Subsec. (e) to allow other proof of health club membership deemed suitable by commissioner to be included with application by buyer for payment from guaranty fund; June 30 Sp. Sess. P.A. 03-6 replaced Commissioner of Consumer Protection with Commissioner of Agriculture and Consumer Protection, effective July 1, 2004; P.A. 04-189 repealed Sec. 146 of June 30 Sp. Sess. P.A. 03-6, thereby reversing the merger of the Departments of Agriculture and Consumer Protection, effective June 1, 2004.

Sec. 21a-227. Health club closings. Electronic monitoring of sales presentations. (a) When any health club is closing or transferring its place of business to another location, the health club, at least sixty days before closing or transferring, shall: (1) Notify the Department of Consumer Protection; (2) notify all current members; (3) notify all prospective members prior to entering into any health club contract; and (4) publish a notice in a newspaper with general circulation throughout this state that the health club is closing or transferring its place of business.

(b) No health club shall electronically monitor sales presentations between an employee of a health club and a prospective buyer unless the prospective buyer is notified that the sales presentation is being electronically monitored and the prospective buyer is given the option to require that the electronic monitor be shut off.

(P.A. 90-96, S. 2, 3; June 30 Sp. Sess. P.A. 03-6, S. 146(d); P.A. 04-169, S. 17; 04-189, S. 1.)

History: June 30 Sp. Sess. P.A. 03-6 and P.A. 04-169 replaced Department of Consumer Protection with Department of Agriculture and Consumer Protection, effective July 1, 2004; P.A. 04-189 repealed Sec. 146 of June 30 Sp. Sess. P.A. 03-6, thereby reversing the merger of the Departments of Agriculture and Consumer Protection, effective June 1, 2004.

Secs. 21a-228 to 21a-230. Reserved for future use.