|(a) Unless exempted by the Health Spa Act, §702.353 a registrant or an assignee or agent that accepts prepayments for membership in a health spa before the date the health spa opens shall deposit all of the funds in an escrow account established with a financial institution whose accounts are insured by the Federal Deposit Insurance Corporation, the Savings Association Insurance Fund, or the National Credit Union Administration which shall hold the funds as escrow agent for the benefit of the members that prepay. (b) The following conditions apply to escrow accounts: (1) Prepayments must be deposited at least biweekly and the first deposit must be made not later than the 14th day after the date on which the registrant or its agent accepts the first payment; (2) The funds must remain in escrow and may not be withdrawn by the registrant unless the following conditions are met: (A) The health spa remains open for not less than 30 days; and (B) The registrant provides the escrow agent proof that the registrant has filed an affidavit with the secretary of state certifying that all obligations of the registrant for which a lien could be filed under Property Code, Chapter 53, have been paid and that no person is eligible to claim a lien under that chapter during the period the registrant, its agent or assignee accepts prepayments. (3) The escrow account will terminate and the funds will be refunded to the members of the health spa under the following conditions: (A) If the health spa does not fully open for business before the 181st day after the registrant first sells a membership in the health spa, or if the health spa does not remain open for 30 days, the escrow agreement shall terminate and all prepayment deposits shall be refunded to the members; or (B) If another health spa is operated by the same seller and is located not more than 10 miles from the proposed location of the new health spa and the person purchasing the membership is authorized to use these other facilities, then the member of the new spa whose fees are held in escrow is entitled to receive a full refund of the membership fees from the escrow agent if the new health spa does not open before the 361st day after the date on which the new spa first sells a membership or if the new spa does not remain open for 30 days. (4) The financial institution shall hold each prepayment as an escrow agent for the benefit of the member who made the prepayments. (5) The financial institution will respond to each inquiry made by the secretary of state regarding the escrow account.
|Source Note: The provisions of this §102.20 adopted to be effective January 18, 1993, 18 TexReg 61; amended to be effective December 27, 2004, 29 TexReg 11947; amended to be effective April 20, 2009, 34 TexReg 2375