What a subdivision bond is
Cities and counties often require a developer to bond the public improvements in a new subdivision or site plan, like streets, sidewalks, storm drains, sewer and water lines, before they approve the final map or permits. The bond guarantees the improvements are built to the agency's standards.
In California
California cities and counties require security for subdivision improvements under the Subdivision Map Act. Government Code Section 66499.3 sets performance security at 50 to 100 percent of estimated cost, plus labor and materials security of 50 to 100 percent.
- The local agency may also require security for a one-year guarantee and warranty of the work (Gov. Code 66499.3).
You need this bond if you're
- A developer or subdivider recording a final map
- A builder with a site plan that includes public improvements
- A contractor building improvements under a developer agreement
- An owner required to bond grading or erosion control
What the surety looks at
The project, the engineer's cost estimate for the improvements and the developer's finances. Larger projects need financial statements.