As you decide to take your construction company through a new, exciting project, there are some legalities and agreements that cannot be overlooked. The benefits of subdivision bonds extend from protecting the involved parties to providing a unique competitive advantage to a firm. Choosing to prequalify for subdivision bonds can help your company be in front of the line when it comes down to obtaining such agreements, cut down on precious time, and secure a contract.
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Understanding Subdivision Bonds
Subdivision bonds are at the core of a healthy relationship between a contractor and a firm or developer. They increase the level of trust between the parties and provide financial assurance to the clients, in case an unforeseen event impedes the completion of a project. Such agreements are a legal requirement when it comes down to specific land improvement projects, such as the ones in which a public entity is involved. However, on another level, obtaining a subdivision bond for your firm can help you enjoy an advantageous, unique selling point that your competitors lack.
Subdivision bonds are what guarantees the client to be able to see a finished product regardless of potential obstacles and impediments. Such agreements fall into the category of contract bonds, accords that regulate the relationships between contractors and firms in fields such as construction and land improvement. Depending on the type of project your firm is working on, these surety bonds are referred to as:
- Construction bonds
- Land Improvement or Site Improvement Bonds
- Plat Bonds
- Completion Bonds
- Performance Bonds
- Bid Bonds
- Payment Bonds
- Contractors Bonds
- Construction Performance Bonds
The process of obtaining a subdivision bond won’t require you to bear with long waiting times or submit a broad range of documents. However, such agreements need to be approved by three parties:
- The principal – A contractor, and the buyer of surety bonds that can guarantee financial security for the upcoming project and improvements.
- The obligee – The beneficiary of the subdivision bond. Usually, the obligee is a public agency or entity, but it can also be a private customer.
- The surety – A third-party provider, such as Pinnacle Surety, that functions as the underwriter and issuer of the subdivision bond. This company’s task is to cover the cost in case of an unfinished project. This capital is then to be reimbursed by the contractor.
The Importance Of Subdivision Bonds
Subdivision bonds are essential to strengthen the relationship of trust between the client and the contractor. Moreover, they guarantee financial assurance in case of unconcluded works. However, there are other benefits to these all-encompassing agreements such as:
- Without a subdivision bond, authorities and public entities might not give their approval to start construction planning and works. In turn, a developer will not be able to see his project come to life, secure a client, and work on a particular piece of land.
- A subdivision bond guarantees that the land’s improvements include the surrounding public spaces. This is essential to avoid causing damages to nearby public areas and residential estates.
- It is a unique selling point. Not many contractors can obtain a subdivision bond. Qualifying for it is a way to tell clients that your firm is entirely committed to the interests of the client and the development area.
- In some cases, such bonds are legal requirements without which no development project is allowed to begin.
Why Prequalifying For A Subdivision Bond?
The process of obtaining a subdivision bond is neither extensively lengthy or demanding. However, depending on the type of surety bond you need, the surety provider will need a collection of information that ranges from a simple credit check to full financial disclosure.
Usually, all the information needed to undertake the bond is required through a questionnaire that demands an overview of the projects alongside references and other pieces of personal and financial information.
Instead, if your firm undertakes several projects that need subdivision bonds, you could opt to prequalify for contract bonds to speed up the process. This option is excellent for firms that need several subdivision bonds or plan to undertake various consecutive projects.
The Benefits Of Prequalifying For Subdivision Bonds
From the moment your company is accepted into our list of pre-approved contractors, you can enjoy a range of benefits, such as fast subdivision bonds and quick quotes. Let’s have a look at the advantages of this choice in more detail.
- Save time – if you or your firm chooses to prequalify for subdivision bonds, you can cut down on precious time otherwise spent filling up forms and information from the start. Moreover, once your firm is in our pre-approved list, we can proceed on a tight schedule and deliver the agreement promptly.
- Get Fast Quotes – we understand that each project is unique and might have different requirements. That is why we strive to reply to each inquiry promptly. Once you have prequalified, you can be sure to obtain fast quotes and get the process to get your bond underwritten straight away.
- Fast Subdivision Bonds – Time is money, especially if you are trying to secure a client. That is why we aim at getting your agreement ready in 24 to 48 hours. However, by prequalifying for a subdivision bond, we can shorten these timeframes and offer you a contract to present to your client on a tight schedule.
Prequalify with Pinnacle Surety
At Pinnacle Surety, we have over 25 years of experience in the field and a team of experts and in-house underwriters. While aiming at delivering bonds and contracts that are on the spot, yer perfect for the type of project your firm is undertaking. Even if you have not been able to prequalify at other providers, we offer a specialized service that takes into consideration the specific needs of each project. Above all, we truly recognize the importance of securing a client and present a bond in short timeframes. That is why, when you choose to prequalify with Pinnacle Surety, we work around the clock to deliver unique contracts in a matter of hours.