Performance bond/ new construction

[cinnacracker]

Our builder has had 2 performance bonds in place related to the building of our townhome. The first one was in place when the took out the building permit, but expired before we found the place. He renewed the bond with a new company since the work was not done. The 2nd bond was in place when we found and bought the place. If we have a claim on the bond, which bond would we be entitled to? The one that was in place when he took out the permit for the work or the one that was in place when we bought? They are for different amounts due to change in the laws. Thanks. Cleveland, Ohio

[Admin]

It doesn't sound to me like it was a performance bond. I would venture to guess it was a contractor license bond, a type of license and permit bond.

A performance bond will guarantee a contract, while a license and permit bond is required by local and state governments to guarantee the contractor operates per the terms of the rules of the license.


I can't say for certain whether either bond covers what you are looking to place a claim on, as more details are needed as to the bond type, the bond language, etc.

[cinnacracker]

Thanks for the feedback. Now I have the bond in front of me. It says "Contractor's Bond, City of Cleveland" up top. It is saying that the builder must comply with the building codes of the city or be subjected to the penal sum of 25K. I dont think there is any doubt that we are entitled to one of these 2 bonds for our damages. The only issue is which bond. Is it the one taken out when the permit was issued for the entire job, or the bond that was in effect when we moved in (and work was still going on)?

The 2nd bond says:

"The conditions of the obligation (of the contractor) as such that whereas the above bounden principal has made application to the Director of Building and Housing for a Certificate of Registration as a Contractor to engage in the business of constructing, altering, repairing, adding to, subtracting from, reconstructing, or remodeling any building, structure, or appurtenance thereto or any part thereof, as required by the codified Ordinances of the city of Cleveland during the period beginning 3/2/05 and ending the last day 2/28/00.

The 1st bond is the exact same wording , but the dates are ealier, ending 3/1/05. (we moved in 11/05)

There is no reference to the permit for the work needing to be taken out during the period a bond was in place. It just says (to me), the work being done in that timeframe needs to be done in accordance with the city ordenances. So if a specific portion of the project was started in 12/ 05 and not done up to par, should the 2nd bond cover it? Or the first bond since that's when the permit for the work was taken out?

Thanks for reading.