Illinois Statutes Chapter 815. Business Transactions § 645/13. Preopening sales escrow

§ 13. Preopening sales escrow. (a) All moneys received by a physical fitness center pursuant to contracts for physical fitness services prior to the full operation of such center shall be placed in escrow. Such funds shall be kept and maintained in an account separate and apart from any account maintained for the physical fitness center's use or for use in the construction or operation of the physical fitness center or for the payment or benefit of employees of the physical fitness center. Such escrow account shall be established in a bank or trust company doing business in this State.

(b) The escrow account shall provide that the purpose of the account is to protect customers in the event that the physical fitness center fails to substantially complete and open the facility within one year following establishment of the account. Any customer who has paid money which is on deposit in the escrow account may maintain a representative action to close the account and to release such moneys pro rata to all customers similarly situated if such physical fitness center has not been substantially completed and opened within one year of establishment of the account.

(c) A monthly statement of the escrow account is to be furnished to customers who have advanced funds or obligations until such account is closed in accordance with this Section.

(d) The escrow account shall be released by the escrow agent to the physical fitness center not less than thirty days nor more than sixty days following the completion of construction of the proposed physical fitness center as evidenced by (1) a certificate of an architect licensed in this State or a certificate of occupancy issued by the municipality or county where the physical fitness center is located, and (2) a contractor's statement and waivers of liens as to all suppliers of materials and services for the construction of the physical fitness center.

(e) In lieu of the escrow required by this Section, the physical fitness center may furnish such evidence as the Attorney General may require, executed under penalty of perjury by an officer or owner of the physical fitness center, which reasonably demonstrates sufficient financial responsibility to enable the physical fitness center to satisfy all possible claims in the event that the facility or services are not timely provided. In determining whether the physical fitness center has the requisite financial responsibility, the Attorney General may consider the operating and business history and reputation of the physical fitness center and its management within and without the State as well as the operating and business history and reputation of any business or corporation controlled by, under common control with, or controlling the physical fitness center.