[Riskwriter]

I couldn't agree more. In fact we have restrictions in writing this class of business within certain counties in Virginia for that exact reason. Both Maryland and VA seem to have quite a bit of distaste for the bond guarantee as opposed to a liquid security.

What I can't seem to understand is, why would a government what the burden of holding cash, then should there be an issue regarding the development, and there is a claim- does the governing body really want the responsibility of settling a claim? I'm sure this could only further result in lawsuits and more legal fees.

With a bond, they have a 3rd party fully responsible for the completion should the developer be at fault. No where near as much hassle or legal trouble. And obviously, from the developers view, a bond means keeping working capital in his/her pocket AND it means should a problem arise, you don't have Uncle Sam holding your LC/Certified check.