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.
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.
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.
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.
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