The bond forms contain no cancellation provision - the obligation is to complete the work as required to record the subdivision in the jurisdiction's legal land records. The surety's inability to terminate its liability is why the bonds are so carefully underwritten. Keep in mind that no one is paying the subdivider to perform - he's responsible for the project's financing. If funds run out, if his lender pulls the plug, if one of his contractors starts filing liens, if he can't sell the lots - dozens of "ifs" - he may find it difficult to complete the sidewalks, the paving, the landscaping, etc. It can get ugly and very expensive for the bond company. |