Bond Another Day

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When “guaranteed” means it is structurally sound, completed in the time stated, performs as promised, and all subcontractors and suppliers have been paid.

Arguably not quite as good looking as a British secret agent, bonds are a common form of improvement completion assurances used in the State of Utah to guarantee the proper completion of landscaping or other infrastructure improvements required as a condition precedent to recording a subdivision plat or the development of a commercial, industrial, mixed-use, or multifamily project.

Bonds are typically a contract between three (3) parties.  

  • The principal / bonded entity, or the individual holding the bond;
  • The obligee / authority that requires the bond, such as the governmental agency requiring the bond; and
  • The surety / bond provider, also known as the company issuing the bond.

In order to secure a bond, the principal simply pays a fee to retain a bond from a bond company (or “surety”). If the principal fails to adhere to applicable regulations or violates the terms of the bond agreement, a claim may be filed against the bond.

Types Of Bonds

While there is no shortage of types of bonds available, contract bonds (i.e., performance and payment bonds or subdivision completion bonds) are typically used to ensure that all expenses or costs associated with a project will be paid and that a contractor will perform the job as stated in the bond agreement.  In the instance of subdivision completion bonds, typically every aspect of construction is covered, guaranteeing that the required improvements are correctly completed and in a timely fashion.  

Why Bonding Matters

Utah State statutes require the completion of any required public landscaping improvements or infrastructure improvements before development activity, or the recording of a subdivision plat can occur.  Bonding, or posting of another acceptable improvement completion assurance is an acceptable alternative to completing the required public landscaping improvements or infrastructure improvements.  

Statutes also require that if a jurisdiction has an applicant who has chosen to bond for the required infrastructure improvements (i.e., in a new subdivision), and the jurisdiction has approved the method the applicant has chosen to provide improvement completion assurance, the jurisdiction cannot legally withhold the issuance of a building permit or subsequent certificate of occupancy.

Need Help To Revitalize Your Process?

If your municipality or county hasn’t updated its policies to reflect the current processes it uses when it comes to improvement completion assurances, warranty periods, and systems for the release or partial release of improvement completion assurance funds, it might be time to do so.  We can help you revitalize your process!

Call Rural Community Consultants today to get expert planning, economic, and ordinance advice to make your community the best it can be.

Want To Learn More?

Check out our online training modules! Note: Rural Community Consultants is able to provide access to specific training modules free of charge, courtesy of the Utah Office of the Property Rights Ombudsman.

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