552.16 Escrow — bond. 1. A physical exercise club or its assignee or agent that accepts prepayments shall deposit all of the funds received as prepayments in an escrow account established with afinancial institution located in this state whose accounts are insured by the federal depositinsurance corporation, the national credit union administration, or the federal savings andloan insurance corporation, which shall hold the funds as escrow agent for the benefit of thebuyers that prepay. The physical exercise club shall deposit all prepayments received at leastbiweekly and shall make the first deposit not later than the fourteenth day after the day onwhich the physical exercise club accepts the first prepayment. Not later than the fourteenthday after the day on which the first prepayment is received, the physical exercise club shallsubmit to the attorney general’s consumer protection division a notarized statement thatidentifies the financial institution in which the prepayments are held in escrow and the nameand account number in which the account is held. The prepayments shall be held in escrowuntil the thirtieth day after the date that the physical exercise club fully opens for ld in escrow and the nameand account number in which the account is held. The prepayments shall be held in escrowuntil the thirtieth day after the date that the physical exercise club fully opens for business. 2. If the physical exercise club does not fully open for business before the two hundred eleventh day after the date it enters into the first physical exercise club contract or if the clubdoes not remain fully open for thirty days, the buyers whose payments are held in escrowunder this section shall receive a full refund, including the buyer’s pro rata share of anyinterest earned thereon, from the escrow agent. Refunds pursuant to this section shall bemade not later than the two hundred forty-first day after the date the first physical exerciseclub contract was signed. If the escrow agent fails to make a full refund as provided for in thissection, the attorney general shall hold a hearing and determine whether the physical exerciseclub has fully opened and has remained open for thirty days, and if not, determine thosepersons who, as buyers, are entitled to a refund and, if appropriate, distribute the escrowproceeds. al exerciseclub has fully opened and has remained open for thirty days, and if not, determine thosepersons who, as buyers, are entitled to a refund and, if appropriate, distribute the escrowproceeds. Notice shall be provided to the physical exercise club at the address specified inthe contract pursuant to section 552.4 and to all buyers who have funds in the escrow account.All hearings held under this section shall be held in accordance with chapter 17A. 3. For the purposes of this section, the date on which a physical exercise club fully opens for business is the date on which all of the equipment and services of the physical exerciseclub that were advertised before the opening or promised to be made available, whether or notcontained in the contract, are actually available for use by buyers. The attorney general mayupon application certify that a physical exercise club is fully open for business if substantiallyall of the promised equipment and services are available for use, and the physical exerciseclub has made a diligent effort to provide the remaining equipment and services. 4. The buyer retains ownership of all moneys and interest held in escrow under this section. 5. d the physical exerciseclub has made a diligent effort to provide the remaining equipment and services. 4. The buyer retains ownership of all moneys and interest held in escrow under this section. 5. In lieu of establishing the escrow account described in subsections 1 through 4, a physical exercise club may post a one hundred fifty thousand dollar bond with the office ofthe attorney general, in a form deemed acceptable by the attorney general to protect theinterest of buyers. Notice of the existence of the bond must be disclosed to the buyer in thephysical exercise club contract. Either the attorney general or a buyer shall be entitled tocollect on the bond in the same manner and on the same terms as provided for an escrowaccount in subsections 1 through 4. The aggregate liability of the surety for all damagesshall not exceed the amount of the bond. 88 Acts, ch 1221, §16; 2000 Acts, ch 1021, §2Referred to in §552.1, 552.12, 552.14 Sat Dec 23 01:48:37 2023 Iowa Code 2024, Section 552.16 (16, 0)
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