A subdivision bond is a contract performance bond that can also be known as a developer bond, land improvement bond, site improvement bond, plat bond, completion bond, or performance bond. Subdivision bonds provide a guarantee that improvements will be made to land within a subdivision. Subdivision bonds are required by some local governments when contractors start work on a subdivision building project. They are a guarantee that the contractor will complete improvement works such as sidewalk maintenance, electrical upgrades, grading changes, etc. in the required time frame. In other words, subdivision bonds are a form of insurance that ensures the government agency will receive the necessary money to get the work done if the contractor fails to complete the project in a timely fashion.

Alternative names for this bond include developer bond, land improvement bond or completion bond. The bond is relevant to projects done for a government agency, to the benefit of the local community, such as building sewers, maintaining a sidewalk or houses being built by a developer. This bond will ensure that the developer is capable of completing this task, as well as keep to the proposed timeline. If the work is not completed as agreed upon, the government agency can make a claim for reimbursement from the surety who underwrites the bond, in order to pay another contractor to complete the project.

In contrast to other construction bonds, a subdivision bond only relates to the agreed upon improvements or construction, not payment and performance of all the developer’s contract work. The contract terms of a subdivision bond depend on various factors, including credit scores, experience and work history. A project outline often forms part of your bond application process.