LOGIN(888) 592-6631

Subdivision Bond

Definition: A contract surety bond that guarantees a developer will make all the additions or improvements to a subdivision agreed upon in the developer's agreement. This bond can also be referred to as a site improvement bond.

See if you qualify for a Developer Bond


  • What will a subdivision bond cost?
  • It is a percentage of the bond amount, billed on an annual basis. The bond renewal amount can be reduced from year to year as the work is satisfactorily completed, but it will be continuously billed until a release letter is received. Use our estimate tool to get a general price range or apply online to get a precise cost.

  • 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. Watch our video and learn more about claims.

  • 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.

    The bond comes with a team of claim specialists that will help fight any false claims. With a letter of credit, there's often no claim investigation. The government entity holding the letter of credit can draw down on it anytime they feel there is a breach of the developer's agreement, which makes your working capital vulnerable. For larger companies who choose the bond, surety companies can finance you if you get in to tight cash flow situations.

Still have questions? See our Education Center or ask us now!

Get approvals for Subdivision Bonds!

Carole Mitchell Lewis (Wed, 07 Aug 2013 03:32:05 -0400): I am trying to find out how many years left on bonds in each subdivision of Eagle Harbor and Fleming Island Plantation in Fleming Island Fl.

Questions? Ask us here!

Get an approval for a Subdivision Surety Bond!