What a maintenance bond is
A maintenance bond, also called a warranty bond, guarantees your finished work is free of defects in materials and workmanship for a set period, often one or two years. Sometimes it's built into the performance bond; sometimes the owner wants it separately.
In Iowa
No Iowa statute requires a maintenance bond on every job. Iowa Code § 573.2 requires a performance bond on public improvement contracts of $25,000 or more and refers to maintenance bonds that a public improvement contract may require, so whether one is needed, and its amount and term, is set by the contract.
- If a surety on a contract-required performance or maintenance bond becomes insolvent and the contractor must buy a new bond, the contractor may apply for reimbursement from the agency that required it (Iowa Code § 573.2(1)).
You need this bond if you're
- A contractor finishing public works with a warranty period
- A site contractor handing improvements over to a city or county
- Paving, concrete, roofing and landscaping contractors
- A developer whose subdivision bond is being released
What the surety looks at
Your business, credit and the finished project. Often handled together with the performance bond.