Subdivision Bond
A subdivision bond is required when a developer proposes to make site improvements to land. Grading, street, water, sewer, storm drain, or monument improvements in a subdivision may require a bond.
Also known as a site improvement bond or plat bond, this type of construction performance bond ensures developers will fund the cost of the project and complete the improvements in accordance with their contract.
Subdivision Bond Cost
The cost of a subdivision bond is typically 1%-3% of the bond amount, depending on the developer’s financial strength.
How Subdivision Bonds Work
In a subdivision bond, the principal is the developer, the obligee is the local government, and the surety is the company issuing the bond.
Subdivision bonds serve as a financial guarantee the site improvements will be made in adherence to city codes within the specified timeframe. If you fail to meet the requirements and a claim is made against you, the public entity will receive funds up to your bond amount to complete the improvements. You’re then held accountable for reimbursing the surety.
Subdivision Bond Requirements
NNA Surety makes it easy to secure your subdivision bond. To apply for a subdivision bond, provide the following information:
- Assurance letter from construction lender/fund control facility
- Engineer’s estimate of cost to complete offsite improvements
- Required bond forms
- Subdivision agreement
- Vicinity map
- Engineer’s environmental survey
- Subdivision Bond Application
- Financial Statement
For more information on subdivision bonds and to get a free quote, contact NNA Surety at 855-563-1401.