Subdivision Bonds

Subdivision bonds, also called Improvement Surety Bonds, are most often found in California, and are required by governments at both the city and county levels. These bonds guarantee preservation of the public infrastructures and property conditions when performing improvements on privately owned residential and commercial properties. In other words, if you want to repair your driveway, you must have one because you could easily damage adjacent curbs, street, or land that belongs to the government—this bond guarantees you will restore the property at your own expense if you do. Often you may not get a building permit unless you have a Subdivision Bond.

Offsite public improvements that the bond covers include: streets, adjacent landscaping, streetlights and other lighting, sidewalks, curbs, driveways, sewers, water, and many more.  There are different kinds of subdivision bonds, and they all serve a purpose in the chain of bonds required to protect city property.

Monument Bonds. This guarantees that the property is surveyed and marked. It provides for the payment of the proper specialists to complete it, and the placement and accuracy of the monuments.

Tax Bonds. This bond guarantees that the owner will pay the property taxes based on the improved value of the land, and usually is for one year.

Performance Bond. This guarantees that all construction will meet the requirements and regulations of the subdivision agreements, and that the work will be done in the time specified. The performance bond is also an important agreement between the property owner and the contractor.

Payment Bonds. These bonds are a guarantee that the contractor will pay suppliers, workers, and subcontractors involved in that particular project. This bond is also called a Labor and Material Bond, and can perform at several levels in a contract.

Maintenance Bonds. A maintenance bond is usually written for one year after the government approves the construction, and guarantees that the property owner will maintain the improvements during that time at his or her expense.

It’s clear how the subdivision bond can guarantee preservation of a city’s property when owners and developers need to improve adjacent private property. The infrastructures of an area are important to all citizens, so it’s only right that they be cared for and restored in case of damage. If you are a developer or owner, make sure you check with your government offices at both the city and county levels to make sure you get the proper bonds and in the right amounts before you make a costly mistake.