Requires notification to members of health club if club is to be sold and health club services contract assigned to new owner, the official text

[Second Reprint]

SENATE, No. 3306

STATE OF NEW JERSEY

222nd LEGISLATURE

INTRODUCED FEBRUARY 2, 2026

Sponsored by:

Senator  M. TERESA RUIZ

District 29 (Essex and Hudson)

Senator  RAJ MUKHERJI

District 32 (Hudson)

Assemblyman  WILLIAM W. SPEARMAN

District 5 (Camden and Gloucester)

Assemblyman  WILLIAM B. SAMPSON, IV

District 31 (Hudson)

Co-Sponsored by:

Assemblyman Kearney and Assemblywoman Brennan

SYNOPSIS

Requires notification to members of health club if
club is to be sold and health club services contract assigned to new owner.

CURRENT VERSION OF TEXT

As reported by the Assembly Commerce and Economic
Development Committee on May 14, 2026, with amendments.

An Act concerning the assignment of health club services contracts
and amending P.L.1987, c.238.

Be It
Enacted by the Senate and General Assembly of
the State of New Jersey:

1.    Section 4 of P.L.1987,
c.238 (C.56:8-42) is amended to read as follows:

4.    a. Every contract for
health club services shall be in writing.  A copy of the written contract shall
be given to the buyer at the time the buyer signs the contract.

b.    A health club services
contract shall specifically set forth in a conspicuous manner on the first page
of the contract the buyer's total payment obligation for health club services
to be received pursuant to the contract.

c.     A health club services
contract of a health club facility which maintains a bond, irrevocable letter
of credit or securities, moneys, or other security pursuant to subsection a. of
section 3 of this act shall set forth that a bond, irrevocable letter of credit
or securities, moneys, or other security is filed or deposited with the
Director of the Division of Consumer Affairs to protect buyers of these
contracts who are damaged or suffer any loss by reason of breach of contract or
bankruptcy by the seller.

d.    Services to be rendered
to the buyer under the contract shall not obligate the buyer for more than
three years from the date the contract is signed by the buyer.

e.     A contract for new or
increased health club services may be cancelled by the buyer for any reason at
any time before midnight of the third operating day after the buyer receives a
copy of the contract.  In order to cancel a contract the buyer shall notify the
health club of cancellation by telephone to the health club facility location
where the contract was entered into or online, if the contract was entered into
online; by regular, registered, or certified mail received within the three-day
period, return receipt requested; or personal delivery to the address specified
in the contract.  All moneys paid pursuant to the cancelled contract shall be
fully refunded within 30 days of receipt of the notice of cancellation.  If the
customer has executed any credit or loan agreement through the health club to
pay all or part of health club services, the negotiable instrument executed by
the buyer shall also be returned within 30 days.  The contract shall contain a
conspicuous notice printed in at least 10-point bold-faced type as follows:

“NOTICE TO
CUSTOMER”

You are entitled to a copy of
this contract at the time you sign it.

You may cancel this contract
at any time before midnight of the third operating day after receiving a copy
of this contract.  If you choose to cancel this contract, you must take any one
of the following actions:

1.    Send a signed and dated
written notice of cancellation by regular, registered, or certified mail,
return receipt requested;

2.    Personally deliver a
signed and dated written notice of cancellation to:
..................................... (Name of health club)
..................................... (Address of health club);

3.    Personally place a
telephone call to the health club facility location where the agreement was
initially entered into; or

4.    If you entered into the
contract online, use either the direct link on the health club facility's
Internet website, the user settings on your smartphone or tablet, or a
termination email formatted and provided by the health club facility to cancel
the contract online.

If you cancel this contract
within the three-day period, you are entitled to a full refund of your money.
If the third operating day falls on a Sunday or holiday, notice is timely given
if it is mailed or delivered as specified in this notice on the next operating
day.  Refunds must be made within 30 days of receipt of the cancellation notice
to the health club.

'Operating day' means any
calendar day on which patrons may inspect and use the health club's facilities
and services during a period of at least eight hours, except holidays and
Sundays."

f.     A health club services
contract shall provide that it is subject to cancellation by telephone or
written notice online, if the contract was entered into online; sent by
regular, registered, or certified mail, return receipt requested; or personally
delivered to the address of the health club specified in the contract upon the
buyer's death or permanent disability, if the permanent disability is fully
described and confirmed to the health club by a physician.  In a cancellation
under this subsection, the health club may retain the portion of the total
contract price representing the services used plus reimbursement for expenses
incurred in an amount not to exceed 10% of the total contract price.

g.    A health club services
contract shall provide that it is subject to cancellation by telephone or
written notice online if the contract was entered into online; sent by regular,
registered, or certified mail, return receipt requested; or personally delivered
to the address of the health club specified in the contract upon the buyer's
change of permanent residence to a location more than 25 miles from the health
club or an affiliated health club offering the same or similar services and
facilities at no additional expense to the buyer.  In a cancellation under this
subsection, the health club may require proof of the new permanent residence
and may retain a prorated share of the total contract price based upon the date
the notice was received plus reimbursement for expenses incurred in an amount
not to exceed 10% of the total contract price.

h.    A health club services
contract shall provide that if a health club facility is closed for a period
longer than 30 days through no fault of the buyer of the health club services
contract, the buyer is entitled to either extend the contract for a period equal
to that during which the facility is closed or to receive a prorated refund of
the amount paid by the buyer under the contract.

i.     A health club services
contract shall not obligate the buyer to renew the contract. A buyer who
entered into a health club services contract online shall be provided with the
option to terminate the automatic renewal of the health club services contract online
through a direct link or button on the health club facility's Internet website.
The link or button shall be in a prominent location on the health club
facility's Internet website and in clear and conspicuous text.

j.     If a health club
facility is not in existence on the date the contract is executed, the health
club services contract shall provide that a buyer of a contract may cancel the
contract if the facility is not open for business on a date which shall be set
forth in the contract and receive a full refund of any deposit or payment on
the contract.2[offerings]

k.1[A
health club services contract shall provide that the] (1) If a1 health
club facility 1is
to change ownership but the new ownership does not result in contract
alterations regarding a decrease in service offerings or increase in price 2, but
does result in a change in the name of the business,2 upon
the ownership transfer, the facility1
shall notify, by mail or electronically 1and at least 60 days in
advance1
2; and again by mail or electronically and at least 30 days
in advance2,
the buyer of a 1health
club services1
contract: of a change in ownership of the health club facility; 1that
membership rates and services remain the same;1 2[the date of
the transfer of ownership;]
1the
business name of the facility under new ownership;1 2the
date billing under the new business entity begins;2 and
1a
stipulation1
that the contract shall not be assigned to the new owner 1[unless] if1 the
buyer of the contract 1[provides
written consent.  The written consent may include electronic acknowledgement by
a buyer of the contract that is sent, separately from the contract, in advance
of any transfer of the facility ownership. If the new owner fails to obtain
written consent from the buyer of the contract within 30 days of the change in
ownership, the contract shall be deemed canceled, unless the buyer subsequently
consents to its assignment]
denies, through written 2[or],2 electronic
2,
or in-person2
communication, assignment of the contract to the new owners 2seven
days before the date billing under the new entity begins in which to nullify
the contract2.
If the buyer of the contract allows the contract to be assigned to the new
owners of the health club facility, the buyer shall have up to 2[26] seven2 days
2[after] before2 the
2[transfer of
facility ownership]
date billing under the new entity begins in which2 to
nullify the contract.  If any charges were made against the account of the
buyer, including after a buyer requested nullification of a contract 2but
not before the request was made2,
during the 2[26-day] seven-day2 period
2[following
the transfer of ownership]
before the date billing under the new business entity begins2 ,
the health club facility shall have up to 2[10 business] 302 days
2[after the
nullification]
from the receipt of the request for nullification2 to
issue a refund of the charges1.

1(2) If
a health club facility is to change ownership and if new ownership results in
contract alterations regarding a decrease in service offerings or an increase
in membership rates upon ownership transfer, the facility shall notify, by mail
or electronically and at least 60 days in advance 2and
again by mail or electronically and at least 30 days in advance2, the
buyer of a health club services contract: of a change in ownership; 2[the new
membership rates;]
the change in services 2and,
if applicable, the new membership rates and the date when the change in
services and new rates take effect2
; the business name of the facility under new ownership;
2[the date of
the transfer of ownership;]
the date the billing under the new business entity begins2 ; and
that the contract shall be assigned to the new owner if the buyer of the
contract consents to the transfer through written 2[or],2 electronic
2,
or in-person2
communication to the health club facility within 30 days of the date of
transfer.  If the consent is not received by the health club facility within 30
days before the transfer of ownership, the contract will be deemed cancelled.  The
buyer of the contract shall have up to 2[26] seven2 days
2[after] before2 the
2[transfer of
facility ownership]
date billing under the new entity begins in which2 to
nullify the assignment of the contract.  If any charges were made against the
account of the buyer during the 2[26-day] seven-day2 period
2[following] before2 the
2[transfer of
ownership]
date billing under the new entity begins2 , including after a
buyer requested cancellation of a contract 2but not before the
request was made2,
the health club facility shall have up to 2[10 business] 302 days
2[after the
cancellation]
from the receipt of the request for cancellation2 to
issue a refund of the charges.

(3)   If a health club
facility is to change ownership, the owner of the health club facility shall
post a notice, at least 2[15] 302 days
in advance of the transfer in ownership and for 26 days after the transfer in
ownership, in a prominent location in the facility with the following
information:

(a) the 2[business
name of the facility under the new owner]
name of the new business entity2
;

(b) the date 2[of the
change of ownership]
billing under the new entity begins2 ; and

(c) that the buyer of the
contract may, 2[up to 26
days after the transfer,]
elect to decline 2or
approve2
to have their contract assigned to the new owner 2for
up to the applicable timeframe as set forth in paragraphs (1) and (2) in this
subsection2
.1

2(4)  Paragraphs
(1), (2), and (3) in this subsection shall only apply to transfers of ownership
and shall not apply to facility closures.2

l.  2If
there is no change in ownership of a health club facility but the business entity
that owns the facility is to change, the facility shall give notice to buyers
of a contract with the facility 30 days prior to the change in business entity.

m.2  As
used in this section:

“Automatic renewal” means a
plan or arrangement in which a health club services contract is automatically
renewed at the end of a definite term for a subsequent term.

2“Change
in ownership” means a change in the ownership of a health club facility upon
completion of a transaction that results in the sale, transfer, assignment, or
other disposition of 1) all or substantially all of the assets of a health club
facility or 2) 51 percent or more of the outstanding equity of a health club
facility, whether in memberships; shares of capital stock; or other ownership
interests.2

“Clear and conspicuous” means
in larger type than the surrounding text, or in contrasting type, font, or
color to the surrounding text of the same size, or set off from the surrounding
text of the same size by symbols or other marks, in a manner that clearly calls
attention to the language.

(cf: P.L.2023, c.241, s.2)

2.    This act shall take
effect immediately and shall be applicable to health club services contracts
entered into on or after that date.