Sub Division Bond
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Sub Division Bond Information
A Sub division bond is a contract bond used for a new project rather than an existing project. This could be either a residential or a governmental project. While a sub division bond is similar to a site improvement bond and it is very easy to confuse the two, there actually is one very evident difference between them.
A sub division bond is a contract bond used on a new project, one being built from the ground up, meaning one never having existed before the contractor began the project. A site improvement bond is a contract bond on an existing project, meaning a building or residence that existed before the contractor joined the project.
In all other ways, however, a sub division bond is very similar to a site improvement bond in that it would involve the three major parties. The project owner or manager, also known as the oblige, this is who is in charge of the project and who the bond is supposed to protect, usually the person who requests the bond, though, depending on the situation (if it is government contract) it may be required by law. The contractor, known as the principal, this is who would be paying for the bond; this is for the protection of both the contractor and the project owner/manager. The third party involved would be the surety company or underwriter. This is the person or company that would ensure that if the contractor somehow defaulted on how obligation on the project or did not complete the project to specification, then the project owner is not left without any legal options.