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 Michigan
Under Michigan's Land Division Act, a city, village or township may require the developer to finish required street and other improvements, or to post a deposit such as a surety bond, before it approves a final plat. The local government sets the amount, which must be enough to make sure the work is finished on time.
- Cash deposits are rebated as the work progresses, in proportion to the work completed.
- For site plans and other zoning approvals, MCL 125.3505 lets a local government require a performance guarantee, including a surety bond.
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.