A Subdivision Bond is a type of Contract Performance Bond that some state governments and municipalities require of land owners to make improvements to land within a subdivision, such as improving electrical lines, sewer, sidewalks, gutters, grading, etc.
The Subdivision Bond covers every aspect of construction, guaranteeing that the required improvements are completed in the properly, and in a timely fashion.
There are three parties involved in a Subdivision Bond.
Subdivision Bonds are also known as:
One major difference between Subdivision Bonds and traditional Performance Bonds is that the the principal of the Subdivision Bond must pay the cost of building the bonded improvements rather than the obligee, no matter who the principal is. Traditionally, the owner or developer will secure the bond for construction. However, if a contractor agrees to secure/post the Subdivision Bonds on behalf of the owner, then the contractor will be obligated to complete the improvements and pay all the bills whether or not the owner pays the contractor.
Most local government agencies require a Subdivision Bond before allowing contractors to start work on a subdivision development project.
Subdivisions are a growing construction segment, and because of that, government agencies require bonds on subdivisions to ensure that project expectations are met. The Subdivision Bond holds contractors accountable to build and/or renovate important public systems to meet local specifications, including sidewalks, electrical lines, and sewage systems.
The amount of the Subdivision Bond is calculated based on the estimate of the project costs.
The cost of your Subdivision Bond will be based on:
The premium will usually be around 3% of the bond amount. To find out how much your Subdivision Bond will cost, contact Viking Bond Service to request a quote today.
Typically, Subdivision Bonds require:
For certain projects you may need to produce:
A Viking agent will let you know exactly what is needed to get your specific Subdivision Bond quoted and processed.
Subdivision Bonds are complex, and require a thorough application process. However, we at Viking Bond are on your side to help you process your bond as quickly as possible, sometimes within just a few days. Contact Viking Bonds to get your Subdivision Bond process started.
Viking can get you from bond application to bond in hand quick and easy. We work with both good and bad credit clients. Get started here.
A Performance Bond is a type of Contract Bond. These typically involve an awarded contract. Read on to learn more.
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