COVID-19 Update: We are reducing costs for qualified applicants, and offering same day bonding.
Please apply online, or call our team for assistance. Learn more
Contact Our Experts

Subdivision Bond Guide

Pay Instantly Online
100% Secure Payments
Get Bonded in Minutes!
Option to print your bond
Buy Your Bond Online
Fast online application process, instant approvals.
Developers Bond Consultation

We'll never share your information with third parties.

What is a Subdivision Bond?

You are required to obtain a surety bond for working on subdivisions to protect the public. If you do not make improvements to public property as agreed upon in the developer's agreement, a claim can be made. If you would like to learn more about what surety bonds are and how they work, you can read our detailed guide here.

Subdivision bonds are the most effective option for most developers because they have advantages that the other guarantee options do not provide, while not having any of the drawbacks:

  • Subdivision bonds are actually a form of credit, which doesn’t tie-up the owners or developer’s working capital.
  • The owner/developer is prequalified during the surety underwriting process.
  • A quality bond provider should have claims department which will strive to resolve any claims that may arise, rather than paying out claims with little attempt at resolving them.
  • The full face value of the bond will be accessible in the event of a developer/owner default.
  • Subdivision bonds are usually combined with a performance and payment bond, and a maintenance bond.

How Do You Qualify for Subdivision Bonds?

There are several factors that are taken into consideration when reviewing whether an applicant qualifies for subdivision bonds:

  • Industry Experience: Experience in both the construction field and with similar sized projects the bond is needed for is crucial.
  • Financial Analysis: Financial analysis is performed on the company, and the personal wealth of the owners to determine how much surety credit they may qualify for.
  • Project Type: Some project types take much longer than others, as units are often required to be fully sold before the final work can be considered complete; this is especially true with subdivision projects which seem to be the most risky in that they are long term projects. In a subdivision, it can take two years minimum to sell all lots, build the homes and finally pave roads. Commercial projects, such as where the developer is building class-A offices to sell individually are similar in nature to residential projects, but usually much smaller in scope.
  • Financing Methods: Many developers don’t have sufficient assets available to fund projects, so they borrow money from a bank. Obtaining subdivision bonds is near impossible without proving that you have the money available to pay for the work.

Subdivision Bond Specialists

Most bond providers don’t handle subdivision bonds because they are non-cancellable guarantees and are often long term obligations.

Our company is one of the few surety bond providers that handles subdivision bonds, we also specialize in them. Read our guide to learn about the various options you have when guaranteeing a project, why you should choose us for your subdivision bond needs, and more.


Frequent Questions

Can I get a bond with bad credit?

It is unlikely. However, it is possible if you have strong business or personal financials. Apply on our website to determine if you qualify for subdivision bonds.

I have a new business. Can I get a subdivision bond?

Yes. The age of your business does not affect whether you can obtain this bond. The most significant factor considered for qualification is approved financing for the job, followed by your experience in the industry, financials and personal credit.

Can I get a bond if I don't have my financing approved for a project?

No. Unless you can prove you are self-financed, you will be ineligible for a bond because the surety will view you as a high risk to not complete the work.

How do claims occur?

If a developer does not make the required additions or improvements per the developers agreement, the obligee will file a claim on the bond. All legitimate claims must be reimbursed by the developer.

Where can I find a subdivision bond form?

You need to get it from the obligee, as there are generally no industry standard bond forms for this bond type. However, New Jersey is an exception as it does have a standard form for Townships, which we have on file.

Should I get a subdivision bond or a letter of credit?

Obtain a bond, as it is the better option for multiple reasons. The bond only requires an annual premium payment, which is a percentage of the contract amount. The letter of credit requires you to post 100% of the contract amount, tying up your funding, while the bank charges a fee for holding your funds.

Is this a performance bond?

No, a subdivision bond guarantees your improvements or additions on public property. A performance bond guarantees your work for a specific job. The state of New Jersey inaccurately calls subdivision bonds performance bonds.

What if a false claim is filed?

You must contact us immediately, as we have a team of claim specialists here to find a resolution for you. Keep in mind, it is crucial that you work with an expert in the surety industry. Learn more about how to ensure you choose the proper bond company.

Are you looking for a different type of bond?

You can take a look at our full list of contract bonds.


Get Your Surety Bonds from the Best Bonding Companies
We work with the top A-rated, T-listed surety bond companies in the nation

Jennifer Henson
Our company has been with JW Surety for several years now so when we needed to obtain a bond for a new company, we immediately went to them for help. Our rep, Melissa, was extremely helpful and prompt which made the process extremely easy for me.
David Tillotson
Trying to get a local Surety Bond was like driving a car on three tires. I searched Surety Bonds and found JW Surety Bonds. I got online and filled out the information and with in 30 minutes received a response from Melissa. She was informative, friendly and helpful. One more super satisfied customer.

The Nation’s #1 Volume Surety Bond Service
Our company writes $4,000,000,000+ in bonds each year!
  • #1 Bond Writer
    We are the nation's largest volume bond producer.
  • Easy Process
    Fastest online surety bond application process; we approve bonds instantly.
  • Lowest Rates
    Our high volume allows us to negotiate lower rates on your behalf.
  • Claim Specialists
    Your JW surety bond agent will be your claims advocate when you need them most.

Don't wait days to get bonded. Get your surety bond instantly!

Get Your Free Bond Quote
About JW Surety Bonds
We are a family owned and operated agency established in 2003. We started with just two people, and grew to become the largest volume bond producer in the nation with 50+ employees. Since day one, our team focus has been on providing real-time online quotes, an easy process, and the best in claims defense. Learn more about our company.