A site improvement contract surety bond works similarly to a subdivision bond but applies specifically to new construction. While a subdivision improvement bond is relevant when people are improving existing structures from within, site improvement bonds are tailored to new structures, extensions, or improvements that significantly change the site’s footprint.

In essence, a site improvement surety bond guarantees that the landowner or developer will complete the project to the agreed standards, within the allotted budget, and before the set deadline. If they do not, the government entity (obligee) has the right to claim against the surety bond.

If the claim is valid, two courses of action can be taken. Depending on how the bond is agreed upon, the surety company either agrees to pay the value of the claim in full- or ensures steps to complete the construction to the terms of the original agreement.

Unlike insurance companies, the surety company is not responsible for paying the amount- they simply act as a line of credit for the Primary (the owner or developer who obtained the bond in the first place). The surety pays the amount upfront but will reclaim the expense of the settled claim from the person responsible.

Surety bonds exist to avoid projects being left incomplete, improperly finished, or going way beyond a reasonable time frame or budget. It holds people financially accountable for their failure to fulfill a contract to the agreed standard and within the agreed parameters.

Site improvement bonds may be required when a landowner wants to make changes, improvements, or additions to a current site. The relevant government agency responsible for approving construction plans can confirm whether or not this type of bond is needed.

Examples of landowners who may need to obtain a site improvement bond include:

• Commercial property owners building a retail space
• Homeowners adding a large extension
• Hotels planning improvements that change the shape of the building
• Developers building residential or commercial properties on empty land

You can submit a site improvement surety bond application with S Phillips quickly and easily. All applications are secure and private- it only takes a minute or two to get started.

There is a specific bond request form for site improvement surety, and you will be asked to submit a credit check and any other relevant documents at the time of application. The first step, however, is simply to provide a few details and request a free quote.

Three parties are involved in site improvement bonds.

The principal is the person or organization that takes out the surety bond and is financially responsible for any claims that are filed against it. In most cases, this is the landowner or a developer who has complete control over a project.

The obligee is the government agency that outlines the terms and requirements of the surety bond, confirms and approves the construction plans, and can claim against the surety bond if the agreement is breached or the principal fails to meet the requirements.

The surety is the issuing company that provides the bond and is responsible for paying the obligee in case of a claim. They can reclaim the debt owed to them from the Primary through whatever legal means necessary.