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1743
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HARRY HUGHES, Governor
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IT IS AN UNFAIR OR DECEPTIVE TRADE PRACTICE WITHIN THE
MEANING OF TITLE 13 OF THE COMMERCIAL LAW ARTICLE TO FAIL TO
ESTABLISH AND MAINTAIN THE BOND AND RECORDS REQUIRED BY SECTION
130D OF THIS SUBTITLE.
Article - Commercial Law
14-12B-02.
(A) EACH PERSON WHO SELLS HEALTH CLUB SERVICES IN THIS
STATE SHALL REGISTER WITH THE DIVISION ON FORMS THE DIVISION
PROVIDES. THE PERSON SHALL FURNISH THE FULL NAME AND ADDRESS OF
EACH BUSINESS LOCATION WHERE HEALTH CLUB SERVICES ARE SOLD AS
WELL AS ANY OTHER REGISTRATION INFORMATION THE DIVISION DEEMS
APPROPRIATE.
(B) AT LEAST ONE MEMBER OF THE BOARD OF DIRECTORS OF EACH
SELLER OF HEALTH CLUB SERVICES IN THIS STATE SHALL BE A RESIDENT
OF A COUNTY WHERE A CLUB OF THE SELLER IS LOCATED AND SHALL SERVE
AS A RESIDENT AGENT FOR RECEIPT OF SERVICE OF PROCESS.
(C) THE DIVISION MAY BRING AN ACTION FOR MANDAMUS AGAINST A
HEALTH CLUB TO REQUIRE THE CLUB TO REGISTER OR TO HAVE AND
MAINTAIN THE SURETY REQUIRED BY THIS SECTION.
[(a)] (D) (1) A person who sells health club services
agreements shall purchase a surety bond in an amount not less
than $50,000, or shall file with the [division] DIVISION an
irrevocable letter of credit or [other evidence of financial
responsibility satisfactory to the Division in an equivalent
amount] CASH.
(2) A buyer of health club services who suffers or
sustains any loss or damage by reason of breach of contract or
bankruptcy by the seller of the health club services agreement
may bring an action based on the bond and recover against the
surety.
[(b) (1)] (3) The liability of the surety under any bond
may not exceed the aggregate amount of the bond, regardless of
the number or amount of claims filed.
[(2)] (4) If the claims filed should exceed the
amount of the bond, the surety shall pay the amount of the bond
to the Division for distribution to claimants entitled to
restitution and shall be relieved of all liability under the
bond.
[(c)] (E) Any person or business bonded under this section
shall maintain accurate records of the bond and of premium
payments on it. These records shall be open to inspection by the
Division at any time during normal business hours.
14-12B-05.
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