Site Improvement, Subdivision or Plat Surety Bonds

A site improvement plan lays out infrastructure enhancements of an existing subdivision or commercial development, which can include updating items such as access, utilities, sewers, gutters, drainage, curbs, streets, landscaping, and fencing.

Before a permit can be issued for construction, a contractor may first need to obtain a site improvement surety bond. The bond guarantees that a contractor will make all the proper improvements as agreed upon.

Instead of a bond, other securities may be provided in including a certificate of deposit, cash, certified cashier's check, money order, or an irrevocable letter of credit.

Surety Bonds

A site improvement surety bond is sometimes referred to as a subdivision bond or a plat bond. But while a subdivision bond is for new construction, a site improvement bond is for improvements or upgrades to existing infrastructures.

Site improvements are different from typical construction projects in that with a typical project with a public entity like a city, the city pays for the construction costs. With a site improvement, the owner pays for the costs of the improvements.

The surety bond may detail the estimate of expenses, state what improvements are to be made, and give a date of completion.

Because a contractor must go through a pre-approved process with an underwriter to obtain a bond, an obligee is assured that the contractor has the resources to complete the project.

Information the underwriter needs can include:

• list of improvements to be made
• budget
• source of income
• credit check
• personal and business financials
• contractor's experience
• character of the contractor
• company information
• history of key personnel
• insurance policies
• bank statements and bank lines of credit
• licenses
• ownership structure
• copy of subdivision agreement

How Much Does This Bond Cost?

The premium you pay for a Site Improvement Surety Bond depends on factors such as the bond amount plus business and personal financials. Contact our Surety Bond Specialists for a free quote based on your specific project.

Did You Know?

A site improvement bond is for existing structures and sites, while a subdivision bond is for new construction.

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