[HISTORY: Adopted by the Rockland County Legislature 1-15-1991 by L.L. No. 2-1991. Amendments noted where applicable.]
[1]
Editor's Note: Former Ch. 283, Health Clubs, adopted 11-16-1982 by L.L. No. 9-1982, was repealed 1-15-1991 by L.L. No. 1-1991.
A. 
The Rockland County Legislature finds that there exists, in connection with a number of contracts for health club services, sales practices and business and financing methods which may have resulted in deception and financial hardship upon the people of this County, that existing legal remedies are inadequate to correct these abuses, that the health club services industry has a significant impact upon the economy and well being of this County and its local communities and that the provisions of this chapter relating to such contracts are necessary for the public welfare.
B. 
The Rockland County Legislature declares that the purpose of this chapter is to safeguard the public and the ethical health club industry against deception and financial hardship and to foster and encourage competition, fair dealing and prosperity in the field of health club services by prohibiting or restricting false or misleading advertising, erroneous contract terms, harmful financial practices and other unfair, deceptive and discriminatory practices which have been conducted by some health club operators.
As used in this chapter, the following terms shall have the meanings indicated:
BUYER
Any individual who enters into a contract for services with a health club.
CONTRACT FOR SERVICES
A contract for consumer services for instruction, training or assistance in body building, exercising, weight reducing, figure development, the martial arts, to include judo, karate and self-defense, or any similar course of physical training to be provided for the future use by a consumer of the facilities providing the foregoing instruction, training or assistance or for membership in any group, club, association or organization for any of the above purposes, except, however, that a contract for services shall not mean or include:
A. 
Membership in any group, club, association or organization which provides any of the foregoing services and which is organized pursuant to the provisions of the Not-For-Profit Corporation Law.
B. 
Boarding accommodations.
C. 
Travel arrangements contracted for less than one year in advance.
D. 
Contracts which incorporate warranties of services or repair given in conjunction with appliances or other goods, where the sale of goods is the primary object of the contract.
E. 
Services by a college or university chartered by the University of the State of New York, a secondary school, an elementary school, a nursery school or kindergarten.
F. 
Contracts for services to provide instruction, training or assistance to acquire a vocation or skill conducted in a training school or by home study.
DIRECTOR
The Director of Consumer Protection and Public Advocate.
[8-5-2020 by L.L. No. 4-2020]
HEALTH CLUB
Any person, firm, corporation, partnership, unincorporated association or other business enterprise offering instruction, training or assistance or the facilities for the preservation, maintenance, encouragement or development of physical fitness or well being. Such term shall include but shall not be limited to health spas, sports, tennis, racquetball, platform tennis and health clubs, figure salons, health studios, gymnasiums, weight control studios, martial arts and self-defense schools or any other similar courses of physical training.
SELLER
Any person, firm, corporation, partnership, unincorporated association or other business enterprise which operates or intends to operate a health club.
A. 
All moneys received by a seller pursuant to a contract for services for use by a buyer of a health club prior to the full operation of such health club shall be placed in escrow.
(1) 
Such funds shall be kept and maintained in an account separate and apart from any account maintained by or for the seller'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 seller.
(2) 
The escrow account shall be established in a bank or trust company doing business in this state.
(3) 
The escrow account shall provide that the purpose of the account is to protect the consumer in the event that the seller fails to complete substantially and to open the facility within one year following establishment of the account. Any buyer who has advanced moneys on deposit in the escrow account may maintain a representative action pursuant to the provisions of the Civil Practice Law and Rules to close the account and to release such moneys pro rata to all buyers similarly situated if such health club facility has not been substantially completed and opened within one year of establishment of the account or if the buyer has not had the full use of another similar facility during this period.
(4) 
Within three business days of a request therefor, a monthly statement of the escrow account is to be furnished to consumers who have advanced funds or obligation until such account is no longer required by this chapter.
(5) 
The escrow account shall provide that funds deposited therein may be withdrawn by the seller upon the completion of the proposed construction in the following manner:
(a) 
One-third of the funds may be distributed to the seller upon completion of 1/2 of the proposed construction.
(b) 
Not more than 2/3 of the funds which have been deposited in escrow may be released upon the completion of 3/4 of the proposed construction.
(c) 
The escrow agent may accept as evidence of partial completion certification of any architect or engineer licensed pursuant to the provisions of the Education Law that the proposed construction has been completed in accordance with the plans and specifications.
(6) 
The escrow account shall be released by the escrow agent to the seller not more than 30 days following full operation of the facility and certification of completion from any architect or engineer licensed pursuant to the provisions of the Education Law.
B. 
In lieu of the escrow provisions required by this section, the health club may furnish information as required by the Director, executed under penalty of perjury by an officer or owner of the health club, which reasonably demonstrates financial responsibility that will enable the health club to satisfy the possible claims against the escrow required by this section. In the event the health club is controlled by, under common control with or controls another corporation and the other corporation agrees, in writing, to satisfy the claims against the escrow required by this section, then the financial responsibility of the other corporation shall be considered in determining the applicability of this section. In determining whether the health club has the requisite financial responsibility, the Director may consider the operating and business history and reputation of the health club and its management within and without the state as well as the operating and business history and reputation of any business controlled by, under common control with or controlling the health club.
[Amended 8-5-2020 by L.L. No. 4-2020]
A. 
Every health club, except as provided in Subsection J of this section, before it enters into any contract for services for use by a buyer of a health club, shall file and at all times maintain with the Director, in form, amount as prescribed herein and substance satisfactory to him:
[Amended 8-5-2020 by L.L. No. 4-2020]
(1) 
A bond with a corporate surety, from a company authorized to do business in this state; or
(2) 
An irrevocable letter of credit or a certificate of deposit from a New York State or federally chartered bank, trust company, savings bank or savings and loan association qualified to do business in New York State and insured by the Federal Deposit Insurance Corporation or the Federal Savings and Loan Insurance Corporation.
B. 
The principal sum of the bond, letter of credit or certificate of deposit shall be;
(1) 
Fifty thousand dollars, if the health club sells contracts for services for a term not greater than 12 months.
(2) 
Seventy-five thousand dollars, if the health club sells contracts for services for a term more than 12 months and up to 24 months.
(3) 
One hundred fifty thousand dollars, if the health club sells contracts for services for a term more than 24 months and up to 36 months.
C. 
For health clubs with three or more locations or for multiple franchises of a common franchisor, the following amounts shall be added to the sum required in Subsection B of this section for the bond, letter of credit or certificate of deposit:
(1) 
For three to four locations, an additional $50,000.
(2) 
For five to six locations, an additional $100,000.
(3) 
For seven to nine locations, an additional $150,000.
(4) 
For 10 or more locations, an additional $200,000.
D. 
The bond, letter of credit or certificate of deposit shall be payable in favor of the County of Rockland for the benefit of any buyer injured in the event that the seller goes out of business prior to the expiration of the buyer's contract for services or otherwise fails to provide a refund to the buyer after cancellation of the buyer's contract for services as provided for in § 283-6 of this chapter.
E. 
The aggregate liability of the surety upon the bond or the banking organization upon the letter of credit or certificate of deposit to all persons for all breaches of the conditions of the bond shall in no event exceed the amount of the bond, letter of credit or certificate of deposit.
F. 
The bond, letter of credit or certificate of deposit filed and maintained pursuant to this section shall not be canceled, revoked or terminated except after notice to and with the consent of the Director at least 45 days in advance of such cancellation, revocation or termination.
[Amended 8-5-2020 by L.L. No. 4-2020]
G. 
Any person claiming against the bond, letter of credit or certificate of deposit may bring and maintain an action against the seller and the surety or bank, trust company, savings bank or savings and loan association.
H. 
For the purposes of this section, a health club shall be considered to be a new health club subject to the requirements of a bond, letter of credit or certificate of deposit as provided herein at the time the health club changes ownership or, in the case of corporate ownership, at the time 30% or more of the stock changes or has changed ownership. A change in ownership of a health club shall not release, cancel or terminate liability under this section under any bond, letter of credit or certificate of deposit filed for a health club as to any buyer who purchases a health club contract while such bond, letter of credit or certificate of deposit is in effect unless the transferee, purchaser, successor or assignee of such health club obtains a bond, letter of credit or certificate of deposit under this section for the benefit of such buyer.
I. 
No contract for services shall be enforceable against the buyer if the seller has failed to comply with any requirements of this section.
J. 
Health clubs shall be excluded from the requirement to file a bond, letter of credit or certificate of deposit if all payments for which the buyer is obligated, including but not limited to down payments, initiation fees, enrollment fees, membership fees or any other direct payments to the health club, do not exceed $100 and if the term of the contract, including but not limited to any complimentary, compensatory or other extensions of the term incident to the contract, does not exceed three months. Additionally, any health club which owns five or more acres of real property which is used directly for the purpose for which the club is formed and any health club the use of which is exclusively restricted to residents of a homeowners' association, cooperative or condominium and which is owned by and operated on the premises of such homeowners' association, cooperative or condominium shall be excluded from the requirement to file a bond, letter of credit or certificate of deposit.
A. 
No contract for services shall require payment by the person receiving service or the use of the facilities of a total amount in excess of $3,600 per annum; provided, however, that this subsection shall not apply to contracts relating solely to the use of tennis, platform tennis or racquetball facilities.
B. 
No contract for services shall provide for a term longer than 36 months. No contract for services shall require payments or financing by the buyer over a period in excess of 37 months from the date the contract is entered into nor shall the term of any such contract be measured by or be for the life of the buyer; provided, however, that the services to be rendered to the buyer under the contract may extend over a period not to exceed three years from the date the contract is entered into with the right to renew, at the option of the buyer, for a like period. The buyer may have 30 days after the expiration to renew 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 to exceed one month.
C. 
No contract for services may contain any provisions whereby the buyer agrees not to assert against the seller or any assignee or transferee of the health club services contract any claim or defense arising out of the health club services contract.
D. 
No contract for services may require the buyer to execute a promissory note or series of promissory notes which, when negotiated, cuts off as to third parties a defense which the buyer may have against the seller.
E. 
No contract may be assigned by one health club to another health club not located on the same premises without written consent of the buyer.
A. 
Every contract for services at a planned health club or a health club under construction shall, at the option of the buyer, be voidable in the event that the health club and the services to be provided pursuant to such contract are not available within one year from the date the contract is executed by the buyer.
B. 
Every contract for services shall provide that such contract may be canceled within three business days after the date of receipt by the buyer of a copy of the written contract. Notice of cancellation shall be delivered by certified or registered United States Mail at the address specified in the contract. Such contract shall contain the following written notice in at least ten-point bold type: CONSUMERS RIGHT TO CANCELLATION. YOU MAY CANCEL THIS CONTRACT WITHOUT ANY PENALTY OR FURTHER OBLIGATION WITHIN THREE DAYS FROM THIS DATE. Notice of cancellation shall be in writing subscribed by the buyer and mailed by registered or certified United States Mail to the seller at the address specified in such form. Such notice shall be accompanied by the contract forms, membership cards and any other documents or evidence of membership previously delivered to the buyer. All moneys paid pursuant to such contract shall be refunded within 15 business days of receipt of such notice of cancellation. If the buyer has executed any credit or loan agreement to pay for all or part of health club services, any such negotiable instrument executed by the buyer shall also be returned within 15 days.
C. 
Every contract for services shall provide that after such three-day period for cancellation as provided in Subsection B of this section, the buyer's estate may cancel a contract for services if the buyer dies. The buyer may also cancel after three days if the buyer becomes significantly physically disabled for a period in excess of six months or moves his residence to a location more than 25 miles from a health club operated by the seller or after the services are no longer available or substantially available as provided in the contract because of the seller's permanent discontinuance of operation or substantial change in operation. Nothing contained herein shall restrict or prohibit the seller from offering or providing in such contract additional or broader reasons for cancellation. The seller may require reasonable evidence for a cancellation pursuant to this subdivision. Such contract shall contain the following notice captioned in at least ten-point bold type:
ADDITIONAL RIGHTS TO CANCELLATION:
You may also cancel this contract for any of the following reasons:
If upon a doctor's order, you cannot physically receive the services because of significant physical disability for a period in excess of six months.
If you die, your estate shall be relieved of any further obligation for payment under the contract not then due and owing.
If you move your residence more than 25 miles from any health club operated by the seller.
If the services cease to be offered as stated in the contract.
D. 
All moneys paid pursuant to such contract canceled for the reasons contained in this subdivision shall be refunded within 15 days of receipt of such notice of cancellation; provided, however, that the seller may retain the expenses incurred and the portion of the total price representing the services used or completed, and further provided that the seller may demand the reasonable cost of goods and services which the buyer has consumed or wishes to retain after cancellation of the contract. In no instance shall the seller demand more than the full contract price from the buyer. If the buyer has executed any credit or loan agreement to pay for all or part of health club services, any such negotiable instrument executed by the buyer shall also be returned within 15 days.
A. 
No assignee who takes a note or other obligation as consideration for a contract containing the disclosure requirements of § 283-6 of this chapter shall fail to honor the consumer's right of cancellation as provided in this chapter.
B. 
No creditor holding a note or other obligation to which a consumer has obligated himself in order to purchase a contract shall fail to honor the consumer's right of cancellation under this chapter if:
(1) 
The creditor is a person related to the seller of services;
(2) 
The seller prepares documents used in connection with the loan;
(3) 
The creditor supplies forms to the seller used by the consumer in obtaining the loan;
(4) 
The creditor makes 20 or more loans in any calendar year, the proceeds of which are used in transactions with the same seller or with a person related to the same seller;
(5) 
The consumer is referred to the creditor by the seller;
(6) 
The creditor, directly or indirectly, pays the seller any consideration whether or not it is in connection with the particular transactions; or
(7) 
The creditor participated in or was connected with the sale.
C. 
No assignee of a contract shall fail to give notice of the assignment to the consumer. A notice of assignment shall be in writing addressed to the consumer at the address shown on the contract and shall identify the contract.
It is hereby declared to be an unfair and deceptive trade practice and unlawful for a seller to:
A. 
Misrepresent directly or indirectly in its advertising, promotional materials or in any manner the size, location, facilities or equipment of its studio or place of business or the number or qualifications of its personnel.
B. 
Use or refer to fictional organization divisions or position titles or make any representation which has the tendency or capacity to mislead or deceive consumers as to the size or importance of the business, its divisions or personnel or in any other material respect.
C. 
Misrepresent directly or indirectly the size, importance, location, facilities or equipment of the business through use of photographs, illustrations or any other depictions in catalogs, advertisements or other promotional materials.
D. 
Misrepresent the location or locations at which its services will be offered.
E. 
Misrepresent the nature of its courses, training devices, methods or equipment or the number, qualifications, training or experience of its personnel, whether by means of endorsements or otherwise.
F. 
Misrepresent the nature and extent of any personal services, guidance, assistance or other attention the business will provide for consumers.
G. 
Designate or refer to his sales representation using terms that misrepresent in any other manner, the titles, qualifications, training, experience or status of his salesmen, agents, employees or other representatives.
H. 
Misrepresent in any manner by the seller or his assignee the buyer's right to cancel under this chapter.
A. 
Any contract for services which does not comply with the applicable provisions of this chapter shall be void and unenforceable as contrary to public policy.
B. 
Any waiver by the buyer of the provisions of this chapter shall be deemed void and unenforceable by the seller as contrary to public policy.
A. 
Any buyer damaged by a violation of this chapter may bring an action for recovery of damages. Judgment may be entered in an amount not to exceed three times the actual damages, plus reasonable attorney fees.
B. 
Nothing in this chapter shall be construed so as to nullify or impair any right or rights which a buyer may have against a seller at common law, by statute or otherwise.
A. 
Any seller or his assignees who violate any provision of this chapter or who shall counsel, aid or abet such violation shall be liable for a civil fine or not more than $2,500 for each violation. The provisions of this chapter are not exclusive and do not relieve the seller or his assignees or the contracts subject to this chapter from compliance with all other applicable provisions of law.
B. 
In addition to the provisions of Subsection A of this section, any seller or his assignees who violate § 283-4 of this chapter shall be guilty of a misdemeanor.
Amended 8-5-2020 by L.L. No. 4-2020]
In addition to the remedies hereinbefore provided, the Director may bring an action on behalf of the people of the County to restrain further violations of this chapter, to enforce the provisions of § 283-4 of this chapter and for such other relief as may be appropriate.