3302

LAWS OF MARYLAND

Ch. 837

(3) (I) AN IRREVOCABLE LETTER OF CREDIT IN A FORM
ACCEPTABLE TO THE DIVISION, OR CASH, MAY BE FILED WITH THE
DIVISION INSTEAD OF A SURETY BOND.

(II) NOTWITHSTANDING ANY OTHER PROVISION OF
THIS SUBTITLE, A SELLER OF HEALTH CLUB SERVICES AGREEMENTS DOES
NOT HAVE TO FILE OR MAINTAIN A BOND, LETTER OF CREDIT, OR CASH IN
EXCESS OF $200,000 PER HEALTH CLUB SERVICES FACILITY.

[(2)] (F) (1) A buyer of health club services who
suffers or sustains any loss or damage by reason of breach of
contract THE CLOSING OF A FACILITY or bankruptcy by the seller of
the health club services agreement SHALL FILE A CLAIM WITH THE
SURETY AND, IF THE CLAIM IS NOT PAID, may bring an action based
on the bond and recover against the surety. IN THE CASE OF A
LETTER OF CREDIT OR CASH DEPOSIT THAT HAS BEEN FILED WITH THE
DIVISION, THE BUYER MAY FILE A CLAIM WITH THE DIVISION.

(2)  ANY CLAIM UNDER PARAGRAPH (1) OF THIS SUBSECTION
SHALL BE FILED NO LATER THAN 1 YEAR FROM THE DATE ON WHICH THE
BREACH OF CONTRACT OCCURRED FACILITY CLOSED OR BANKRUPTCY WAS
FILED.

(3)  THE DIVISION MAY FILE A CLAIM WITH THE SURETY ON
BEHALF OF ANY BUYER IN PARAGRAPH (1) OF THIS SUBSECTION. THE
SURETY SHALL PAY THE AMOUNT OF THE CLAIMS TO THE DIVISION FOR
DISTRIBUTION TO CLAIMANTS ENTITLED TO RESTITUTION AND SHALL BE
RELIEVED OF LIABILITY TO THAT EXTENT.

[(3)] (4) 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.

[(4)] (5) 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.

[(e)] (G) (1) 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.

(2)  ANY PERSON WHO SELLS HEALTH CLUB SERVICES
AGREEMENTS SHALL MAINTAIN ACCURATE RECORDS, UPDATED AS NECESSARY,
OF THE NAME, ADDRESS, CONTRACT TERMS, AND PAYMENTS OF EACH BUYER
OF HEALTH CLUB SERVICES. THESE RECORDS SHALL BE OPEN TO
INSPECTION BY THE DIVISION, UPON REASONABLE NOTICE, AT ANY TIME
DURING NORMAL BUSINESS HOURS.

(3)  IN ADDITION TO ANY REMEDIES OTHERWISE AVAILABLE,
THE DIVISION, AFTER NOTICE AND A SHOW CAUSE HEARING, MAY REVOKE
THE REGISTRATION OF ANY PERSON WHO FAILS TO MAINTAIN OR PRODUCE