(a) No health club shall be considered fully operative until substantially all of the equipment and services listed in accordance with § 486N-9 are actually available for use by buyers.
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Terms Used In Hawaii Revised Statutes 486N-10

  • Business day: means any calendar day on which the health club is open for inspection and use by the buyer, except Saturdays, Sundays, and state or federal holidays. See Hawaii Revised Statutes 486N-1
  • Buyer: means a natural person who enters into a health club contract. See Hawaii Revised Statutes 486N-1
  • Contract: A legal written agreement that becomes binding when signed.
  • Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
  • Escrow: Money given to a third party to be held for payment until certain conditions are met.
  • Health club: means any person operating a business organized for profit, offering facilities or services for the maintenance or development of physical fitness or well-being through physical exercise. See Hawaii Revised Statutes 486N-1
  • Health club contract: means a contract for membership in a health club, or for services offered by a health club, or for use of facilities of a health club, for a period longer than seven days. See Hawaii Revised Statutes 486N-1
(b) Every health club contract shall provide that the health club will be fully operative on a specified date no later than one year after the contract is signed by the buyer.
(c) If the health club is not fully operative at the time that the buyer signs the health club contract, the buyer shall have until midnight of the fifth business day after the day on which the buyer receives notice by mail that the health club is fully operative to cancel the contract in accordance with § 486N-6.
(d) All moneys received by a health club pursuant to a health club contract prior to the health club being fully operative shall be placed in an escrow account separate and apart from any account maintained by or for the health club’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 health club.

The escrow account shall:

(1) Be established in a bank, savings and loan association, or a trust company authorized to do business in the State under an escrow arrangement or corporation licensed as an escrow depository under chapter 449.
(2) Provide that the purpose of the account is to protect the buyer in the event that the health club fails to be fully operative within one year following the advancement of any money by the buyer. Any buyer who has advanced moneys on deposit in the escrow account may maintain an action to recover all moneys advanced or may maintain a representative action to close the account and to release such moneys pro rata to all buyers similarly situated if such health club facility is not fully operative within one year of the advancement of any money by the buyer.
(3) Be closed and released by the escrow agent to the health club only upon the health club becoming fully operative.

Within fifteen business days of a request in the State, or thirty days for out-of-state requests, a statement of the escrow account shall be furnished to buyers who have advanced funds or obligations.

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