Subdivison Bonds

Subdivision bonds are required by city and county governments and cover the offsite public improvement obligations associated with commercial and residential developments.

Offsite public improvement requirements include the construction and maintenance of curbs, lights, sidewalks, driveways, streets and landscaping adjoining the development property.  Sewer and water connections and the current year’s tax obligation, based on the value of the property once the improvements are complete are also included.

Subdivision Bonds are normally written for two (2) years for the first term.  They are then renewed each year until the Obligee issues a Notice of Completion to the surety so they can close the file.  Renewal premium must be paid until the project is completed and released.


The types of Subdivision Bonds include:

  • Performance Bonds – guarantee the construction of the offsite improvements in accordance with the subdivision agreement
  • Payment Bonds or Labor & Material Bonds – guarantee the payment of suppliers, subcontractors and laborers who provide goods and services to the project
  • Maintenance Bonds – guarantee that the owner of the property will maintain the offsite improvements for a period of time, usually one year after the work is accepted by the city or county (Obligee)
  • Monument Bonds – guarantee the property is properly surveyed and the property lines are properly marked
  • Tax Bonds – serve as a financial guarantee that the property taxes, based on the improved value of the property, will be paid by the developer or owner.  These bonds usually cover only the first year’s taxes.

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