Amended in Assembly April 30, 2015

Amended in Assembly March 26, 2015

California Legislature—2015–16 Regular Session

Assembly Bill No. 693

Introduced by Assembly Member Eggman

February 25, 2015

An act to amend Sections 1812.84 and 1812.85 of the Civil Code, relating to health studio services.

LEGISLATIVE COUNSEL’S DIGEST

AB 693, as amended, Eggman. Health studio services: cancellation.

Existing law authorizes a consumer to cancel a contract for health studio services within specified timeframes after the contract is executed, if the health studio fails to provide the specific facilities advertised or offered, or if the health studio eliminates or reduces the scope of the facilities, as specified.

The bill would specify that a contract for health studio services may be canceled by the buyer in begin delete person or end delete begin insert person, end insert via first-class begin delete mail. end delete begin insert mail or from an email address. end insert The bill would make other conforming changes.

Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no.

The people of the State of California do enact as follows:

SECTION 1.  

Section 1812.84 of the Civil Code is amended
to read:

1812.84.  

(a) A contract for health studio services may not
require payments or financing by the buyer to exceed the term of
the contract, nor may the term of the contract exceed three years.
This subdivision does not apply to a member’s obligation to pay
valid, outstanding moneys due under the contract, including
moneys to be paid pursuant to a termination notice period in the
contract in which the termination notice period does not exceed
30 days.

(b) A contract for health studio services shall include a statement
printed in a size at least 14-point type that discloses the length of
the term of the contract. This statement shall be placed above the
space reserved for the signature of the buyer.

(c) At any time a cancellation is authorized by this title, a
contract for health studio services may be canceled by the buyer
in begin delete person or end delete begin insert person, end insert via first-class begin delete mail. end delete begin insert mail or from an email
address on file with the health studio. end insert

SEC. 2.  

Section 1812.85 of the Civil Code is amended to read:

1812.85.  

(a) Every contract for health studio services shall
provide that performance of the agreed-upon services will begin
within six months after the date the contract is entered into. The
consumer may cancel the contract and receive a pro rata refund if
the health studio fails to provide the specific facilities advertised
or offered in writing by the time indicated. If no time is indicated
in the contract, the consumer may cancel the contract within six
months after the execution of the contract and shall receive a pro
rata refund. If a health studio fails to meet a timeline set forth in
this section, the consumer may cancel the contract at any time after
the expiration of the timeline. However, if following the expiration
of the timeline, the health studio provides the advertised or
agreed-upon services, the consumer may cancel the contract up to
10 days after those services are provided.

(b) (1) Every contract for health studio services shall, in
addition, contain on its face, and in close proximity to the space
reserved for the signature of the buyer, a conspicuous statement
in a size equal to at least 10-point boldface type, as follows:

“You, the buyer, may choose to cancel this agreement at any
time prior to midnight of the fifth business day of the health studio
after the date of this agreement, excluding Sundays and holidays.
To cancel this agreement, begin delete mail end delete begin insert mail, email, end insert or deliver a signed and
dated notice that states that you, the buyer, are canceling this
agreement, or words of similar effect. The notice shall be sent via
first-class begin delete mail end delete begin insert mail, from an email address on file with the health
studio, end insert or delivered in person to,

 

(Name of health studio operator)

at     (Address begin insert and e-mail address end insert of health studio operator).”

 

(2) The contract for health studio services shall contain on the
first page, in a type size no smaller than that generally used in the
body of the document, the following: (A) the name and address
of the health studio operator to which the notice of cancellation is
to be mailed, and (B) the date the buyer signed the contract.

(3) The contract shall provide a description of the services,
facilities, and hours of access to which the consumer is entitled.
Any services, facilities, and hours of access that are not described
in the contract shall be considered optional services, and these
optional services shall be considered as separate contracts for the
purposes of this title and Section 1812.83.

(4) Until the health studio operator has complied with this
section, the buyer may cancel the contract for health studio
services.

(5) All moneys paid pursuant to a contract for health studio
services shall be refunded within 10 days after receipt of the notice
of cancellation, except that payment shall be made for any health
studio services received prior to cancellation.

(c) If at any time during the term of the contract, including a
transfer of the contractual obligation, the health studio eliminates
or substantially reduces the scope of the facilities, such as
swimming pools or tennis courts, that were described in the
contract, in an advertisement relating to the specific location, or
in a written offer, and available to the consumer upon execution
of the contract, the consumer may cancel the contract and receive
a pro rata refund. The consumer may not cancel the contract
pursuant to this subdivision if the health studio, after giving
reasonable notice to its members, temporarily takes facilities out
of operation for reasonable repairs, modifications, substitutions,
or improvements. This subdivision shall not be interpreted to give
the consumer the right to cancel a contract because of changes to
the type or quantity of classes or equipment offered, provided the
consumer is informed in the contract that the health studio reserves
the right to make changes to the type or quantity of classes or
equipment offered and the changes to the type or quantity of classes
or equipment offered are reasonable under the circumstances.

(d) (1) If a contract for health studio services requires payment
of one thousand five hundred dollars ($1,500) to two thousand
dollars ($2,000), inclusive, including initiation fees or initial
membership fees, by the person receiving the services or the use
of the facility, the person shall have the right to cancel the contract
within 20 days after the contract is executed.

(2) If a contract for health studio services requires payment of
two thousand one dollars ($2,001) to two thousand five hundred
dollars ($2,500), inclusive, including initiation fees or initial
membership fees, by the person receiving the services or the use
of the facility, the person shall have the right to cancel the contract
within 30 days after the contract is executed.

(3) If a contract for health studio services requires payment of
two thousand five hundred one dollars ($2,501) or more, including
initiation fees or initial membership fees, by the person receiving
the services or the use of the facility, the person shall have the
right to cancel the contract within 45 days after the contract is
executed.

(4) The right of cancellation provided in this subdivision shall
be set out in the membership contract.

(5) The rights and remedies under this paragraph are cumulative
to any rights and remedies under other law.

(6) A health studio entering into a contract for health studio
services that requires a payment of less than one thousand five
hundred dollars ($1,500), including initiation or initial membership
fees and exclusive of interest or finance charges, by the person
receiving the services or the use of the facilities, is not required to
comply with paragraph (1), (2), or (3).

(e) Upon cancellation, the consumer shall be liable only for that
portion of the total contract payment, including initiation fees and
other charges however denominated, that has been available for
use by the consumer, based upon a pro rata calculation over the
term of the contract. The remaining portion of the contract payment
shall be returned to the consumer by the health studio.