What Obligations does a Sub Division Bond Cover

[bondman]

I cannot see from the forum what a Sub Division bond covers. In the UK we have Local Authority bonds that cover Roads (Highways) and Sewer/Drain work. If we develop some land we have to provide a bond to the Local Authority that is responsbile for maintaining the Roads before they will adopt them. Likewise for the Sewers, before the water company will adopt them we provide a bond that ensures that they will work fr a given period after they take over responsibility. Are your Sub Division bonds the same or do they cover different obligations?

[Admin]

You hit the nail right on the head! Subdivision bonds guarantee mandatory improvements to public land (e.g. roads sewers, etc.), typically for developers. However, there are no time constraints on the bond like the UK. Instead, if the improvements are not satisfactorily completed, the bond is not released and actually renews (rare for contract bonds, as they typically do no renew).