If you are a house builder or a property developer intending to commence a new development, the relevant authorities (often the municipality or local authority) may require you to provide bonds to secure the cost of completing the necessary infrastructure, particularly in relation to the roads and sewers.
Prior to the commencement of a new development, house builders and a property developers may be required to provide bonds to secure the cost of completing the necessary infrastructure, including roads and sewers. The bonds concerned guarantee that the relevant infrastructure will be completed to the approved and recognised standards. Once completed, the infrastructure often becomes designated as public infrastructure (meaning that will be maintained in to the future at the expense of the local authority concerned).
The bond sum usually represents the relevant authority’s assessment of the total cost of properly constructing the roads and sewers concerned. The period of the bond covers the construction period and maintenance periods until such time as the roads and sewers have been ‘taken over’ by the relevant authority. You may also be required to post bonds to cover the cost of modifying existing infrastructure (such as new or improved road junctions) or other off-site works (such as construction of a new relief road) or to contribute to other local services improvements (such as contribution to cover construction of new school).
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