New York Health Club Bonds

There are numerous types of Commercial Bonds such as License & Permit, Health Club, Insurance Broker, Title Agency and Sales Tax, just to name a few. For example, Health Club Bond requirements according to the law for the state of New York requires that most health clubs post a bond to protect their members against breaches of contract. Expressly, the law dictates bonds for the following tiers: $50,000 for health clubs that provide contracts for a period of no more than 12 months; $75,000 for health clubs that provide contracts of 12 – 24 months; and $150,000 for health clubs that provide contracts of 24 – 36 months.

Health clubs with more than one location are required to post supplementary amounts up to $200,000. There are several examples of when Health clubs are exempt from this requirement such as not advertising memberships valued at more than $150, Health clubs that require longer term contracts or if the monthly dues do not surpass $150. In addition to those, if the fully paid contracts are not discounted by more than ten percent, memberships no longer than a 12 month term, and if the contract does not include an automatic renewal clause.

New York State Health Club Services Law covers contracts for educating or teaching in bodybuilding, exercising, weight decline and body development or other types of physical preparation and contracts for sports & health spas, tennis and/or racquetball clubs. In particular, this law offers the following protections: Limiting health club contracts to $3,600 per year (not including tennis and racquet ball amenities) and to terms no longer than 36 months; providing patrons with the three-day right to terminate the contract after signing; the Law also offers patrons the right to cancel a contract at any time for any of the following reasons:

  • The health club stops offering any services acknowledged in the contract
  • The patron moves 25 miles from any health club operated by the seller
  • Upon a physician’s order

The patron cannot use the services as stated in the contract because of considerable physical disability for a period in excess of six months; Requires health clubs to provide refunds within 15 days of cancellation; and Provides wronged patrons the right to bring a claim in small claims court and receive a sum of not more than three times the tangible damages plus reasonable legal fees.

Before joining a Health Club you may want to verify the club’s compliance with your state’s requirements.