A subdivision bond is typically purchased by a landowner or developer when upgrades and/or changes are required by a local government authority. It guarantees the work is completed according to the terms set forth. In the agreement with the city, township, or municipality.
Examples of Subdivision Bonds
- Street improvements (grading, paving, curbs, gutters)
- Storm drains
- Water mains
- Erosion control
- Subdivision monumentation
These bonds provide financial assurance that the landowner will find and complete improvements through parcel land development.
Key parties involved in subdivision bonds:
- Principal: the landowner/developer
- Obligee: the city or municipality
- Surety: the underwriter of the subdivision bond
A percentage of the engineer’s estimate for improvement costs are used to determine the subdivision bond amount. Subdivision bonds renew annually until a point at which the public entity requiring the bonds provides a release of the bond obligation to the surety.
At Construction Bonding Specialists, we work with new and experienced contractors to find the most satisfactory bond solutions. As a distinct surety-bond-only agency with decades of bonding experience, we work to discover bond solutions for all types of bond cases ranging from ordinary to challenging. Contact us or call 248-348-6762 today.
Written by the digital marketing staff at Creative Programs & Systems: www.cpsmi.com.