Service Overview
Subdivision bonds are required by city and county governments and cover offsite public improvement obligations tied to commercial and residential developments.
Offsite public improvement requirements can include construction and maintenance of curbs, lights, sidewalks, driveways, streets, and landscaping adjoining the development property. They can also include sewer and water connections, as well as the current year’s tax obligation based on the property’s improved value.
Subdivision Bond Terms and Renewals
Subdivision bonds are normally written for an initial term of two years. After the first term, they are typically renewed each year until the Obligee issues a Notice of Completion to the surety so the file can be closed.
Renewal premiums must be paid until the project is completed and officially released.
Types of Subdivision Bonds
- Performance Bonds: Guarantee construction of offsite improvements in accordance with the subdivision agreement.
- Payment Bonds (Labor and Material Bonds): Guarantee payment to suppliers, subcontractors, and laborers providing goods and services for the project.
- Maintenance Bonds: Guarantee maintenance of offsite improvements for a specified period, usually one year after work is accepted by the city or county (Obligee).
- Monument Bonds: Guarantee that the property is properly surveyed and property lines are correctly marked.
- Tax Bonds: Provide a financial guarantee that property taxes based on improved value will be paid by the developer or owner. These usually cover the first year’s taxes.
How A Better Surety Helps
A Better Surety helps developers and contractors secure the correct subdivision bond program, track renewal requirements, and keep projects moving toward completion without avoidable delays.