Texas Administrative Code
Title 1 - ADMINISTRATION
Part 4 - OFFICE OF THE SECRETARY OF STATE
Chapter 102 - HEALTH SPAS
Subchapter C - ESCROW
Section 102.20 - Procedure for Establishing and Releasing Escrow Accounts
Universal Citation: 1 TX Admin Code ยง 102.20
Current through Reg. 49, No. 38; September 20, 2024
(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not be withdrawn by the registrant unless the following conditions are met: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.
Disclaimer: These regulations may not be the most recent version. Texas may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
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