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Condemnation Surety Bonds

People associate the term condemnation with derelict properties, but it actually just refers to the process used by the government to seize property for the purposes of the public good via eminent domain. Eminent domain allows government entities to compel property owners to sell their property at a fair price so that the land can be used for roads, schools, or other things with communal value. This can be a contentious process for all involved, and if the proceedings end up in court, bonds may be required as well.

What is a Condemnation Surety Bond?

When governments seize a piece of property, they're legally obligated to pay fair market value. But that figure is up for debate, and landowners often (justifiably) feel like their land is worth more than the government's offer. If they cannot reach an agreement amicably, the private company running the building project may take the landowner to court to force the sale. Before agreeing to hear the case, the court may ask the plaintiff to obtain a condemnation bond that guarantees they pay whatever price the court decides, even if it exceeds what they intended to pay. Like other forms of judicial bonds, condemnation surety bonds exist to hold one party in legal proceedings accountable - to ensure that justice is served. Courts require bonds to discourage plaintiffs from filing frivolous lawsuits because they eliminate the incentive to file a lawsuit likely to lose. At the same time, they help defendants (property owners) feel confident they will get just payment. Finally, obtaining a bond allows contested construction projects to move forward, meaning they're valuable for the bonded party too.

How does a Condemnation Bond work?

The courts will decide what a contested property is worth. If the purchaser refuses to pay that price, the property owner may file a claim against the bond seeking compensation equal to whatever the court ordered. If an investigation proves that the claim is valid and the purchaser still refuses to pay, the bond company agrees to settle the claim. After making the (now former) property owner whole, the bond company will collect the amount owed from the bonded party, along with interest, fees, and any associated costs. Bonds guarantee payment, but they do not cover debt. Ultimately, the bonded party is financially responsible for all claims filed against the bond.

Who should get a Condemnation Bond?

Anyone required to do so by the courts. The judge and counsel will make it abundantly clear when you need a bond, and it's in your interest to secure one as quickly as possible. Your case can't proceed until you prove to the court you have a bond, so immediately start looking for a bond company like Viking Bond Service that issues bonds nationwide and knows how to meet all the mandates of the courts.

Who are the parties involved in a Condemnation Bond?

There are three:

• Principal - The bonded party, and typically the company trying to buy the land. The principal must pay for the bond and pay for any claims filed against the bond.
• Obligee - The bond beneficiary, and typically the land owner. The obligee may file a claim against the bond knowing the surety guarantees payment of valid claims.
• Surety - The company that issues the bond. The surety investigates claims, resolves the claims with the obligees when merited, and holds principals responsible for all debts.

How much does a Condemnation Bond cost?

Courts follow their own rules when calculating the value of the bond, but the amount is usually similar to the approximate property value. Based on the total, a condemnation bond costs about 2-5% depending on the applicant's credit history. Applicants with a low credit score or bankruptcy will pay more. To get a quote, submit an application to Viking Bond Service.

How are claims handled for a Condemnation Bond?

The surety investigates the claim, but in this instance it's fairly clear when one party has failed to pay another. The surety will then compensate the obligee for the amount of the claim and shift their focus to the principal. In addition to paying back claims, the principal may owe penalties, fees, and associated costs - making it worthwhile to pay for claims before the surety has to.

How to apply for a Condemnation Bond?

You will need to supply a bond application with information about your background and finances, as well as a copy of the court order and possibly other documents related to the case. You will receive a quote shortly, and after paying, the surety will give you a document for the court proving you have a bond. At Viking Bond Service, this whole process takes as little as 48 hours.

Let Viking Bond Service meet your Condemnation Bond Requirements

Obtain a bond from one of the country's top surety companies. The team at Viking Bond Service excels at making bonds easy to understand and quick to secure. If you need more information, fill out the contact form on this page or call 888-278-7389.