Check out our helpful Surety Reports and required Surety Formats! Bond Program Customer Service contact Judy Schnier, Bond Assistant, at 704-336-4257 or email jschnier@ci.charlotte.nc.us
New Bond Administration Service Fee (effective July 1, 2006)
As of Monday, July 3, 2006 each new surety posted must be accompanied with the $695 fee prior to acceptance of that surety. Land Development offers the Bond Program as an optional and premium administration service to the development community and is designed to ensure the completion of required public improvements. This fee is calculated to recover the administrative and staffing costs to maintain sureties posted.
Bond Program Benefits for Developers and Builders
The Land Development Bond Program affords Charlotte Developers and Builders the opportunity to record subdivision plats and begin real estate transactions in the absence of completed required public improvements. The Land Development Bond Program is designed to ensure the completion of required public improvements to City of Charlotte Standards within two (2) years of initial surety posting.
Bond Program Benefits for Homebuyers and Citizens
The Program benefits Charlotte homebuyers by ensuring two-year completion of required subdivision improvements in conformance with Charlotte-Mecklenburg Ordinances and Standards - quality construction of streets, curb, gutter and storm drains; sidewalks to ensure pedestrian safety; and (for projects within the city limits) the subsequent benefits of Street maintenance by the City of Charlotte. Bonds provide the City with financial resources to complete required public improvements in the event of developer/builder default.
Surety Acceptance Policy (Policy revised 11/01/2005 - new item #1 to be effective 01/01/2007)
For the purpose of releasing a plat for recordation in the absence of completed required public improvements - Land Development will not accept new sureties from Developers or Builders who have:
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Sureties currently on file for projects where the initial surety was posted four (4) or more years previous to the current date: or
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Failed to restore expired Letters of Credit or provide requested amendments; or
- Failed to provide requested Surety Bond Continuation/Verification Certificates or Change Riders.
For a list of Developers and Builders subject to any of the above criteria, view the Principals Subject to the Land Development Surety Acceptance Policy Report. For additional Project and Surety details, and view the Projects Past Due for Completion by Principal Report
The Life Cycle of a Land Development Surety – a chronological review
Surety Estimate
Communicating Surety Preferences at Plat Submittal (using the new Land Development Surety Preferences Selection Form)
The new Land Development Surety Preferences Selection Form addresses our customers' demonstrated need to effectively communicate surety preferences in advance; ensuring the surety estimate calculated following plat approval meets their needs for a particular project. The Charlotte-Mecklenburg Planning Commission (CMPC) will require a Surety Preferences Selection Form, completed by the Owner, with each plat submitted for review.
The following options are available:
Developer Subdivision Surety Options:
- Estimate includes all required subdivision improvements, no credit for completed work.
- Estimate includes *credit for completed work - calculated upon plat approval.
- Estimate includes *credit for completed work - calculation deferred until requested by Owner.
Separate Sidewalk Surety:
Please review the Land Development Surety Preferences Selection Form for details and requirements specific to each option. Give careful consideration to your selections - once the form is submitted, selection modification is not permitted.
Easily completed in MS Word, the form is also available in hard copy at the counters of CMPC or Land Development.
*Note - Credit for Completed Work applies to the Subdivision Surety Estimate only and requires 100% completion of any one of the following items in accordance with the approved plans: storm drainage, stone, asphalt, curb and gutter, or sidewalk.
Calculation of Surety Requirements Following Plat Approval:
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In accordance with the Owner's selections on the Surety Preferences Selection Form, the Review Engineer utilizes Land Development's
standardized Surety Estimation Worksheet Sample to calculate the surety requirements for the project (each approved plat has unique bonding requirements for which an estimate summary will be calculated - surety requirements for multiple plats cannot be combined).
- Within fifteen (15) business days of the initiation of surety calculation process by the Review Engineer, the Bonds Administrator will provide the estimate and all Surety requirements to the Owner as well as to any additional contacts listed on the Surety Preferences Selection Form. Owners should provide their Developer/Builder with all forms and instructions to ensure all sureties posted meet Land Development requirements!
Surety Requirements
Acceptable Surety Types – Unless otherwise specified for a particular project by the Land Development Division Manager, Land Development accepts any of the following to meet all surety requirements:
Required Surety Formats - Letters of Credit and Surety Bonds must adhere to specific format/content requirements established by the City of Charlotte, Engineering and Property Management, Land Development Division (required formats and instructions are provided along with e-mailed estimates, and are available for download from this website). Variations in format or content of these documents will not and cannot be accepted, nor will sureties which fail to incorporate the correct Surety Amount, Project, and/or Application Date references (also provided with the emailed estimate).
Surety Term Limitations – One Year Minimum/Two Year Maximum Term for new sureties, renewal amendments and continuation certificates.
Acceptable Issuing Banks for Letters of Credit - Letters of Credit must be issued by a Financial Institution with a full a service branch located within Mecklenburg County, at which the Letter of Credit may be presented for payment. The Letters themselves may be (and often are) processed from the bank's main office located in another city or state.
In the event the issuing bank ceases to maintain a full service branch in Mecklenburg County at which the Letter of Credit can be presented for payment, the Applicant (Developer or Builder) is required to immediately 1) notify Land Development of the change in branch status, and 2) provide Land Development with an acceptable replacement surety.
Posting Sureties/Plat Release (in the absence of completed required public improvements):
All submitted sureties must be reviewed for accuracy by the Bonds Administrator. Errors and/or omissions will be communicated only to the entity submitting the affected surety.
Upon acceptance of all required sureties, the Bonds Administrator will sign-off in KIVA (Go to KIVAnet) and deliver the signed Subdivision Final Plat Approval Form to the Charlotte Mecklenburg Planning Commission. A representative of the Planning Commission will contact you or your agent when the plat is ready for pick-up and recordation at the Register of Deeds (projects located in the ETJ require NCDOT sign-off prior to recordation)
Surety Reduction Reviews
Requests for Surety Reduction Reviews for eligible sureties may be made at any time during the life of the project. Requests must be in writing and must be accompanied by a copy of the recorded plat and any subsequent revisions (highlighted for installed sidewalk or planted trees where appropriate).
Mail all requests to the attention of Judy Schnier, Land Development Division, 14th Floor, 600 East Fourth Street, Charlotte, NC 28202-2844
Surety Reduction Reviews may require up to twenty (20) business days to complete. Upon receipt of the reduction review results, the issuing Bank, Surety Company or Surety Agent will then require time to process the Amendment or Rider necessary to officially amend the Surety on file with Land Development. We therefore encourage our customers to send Reduction Review Requests well in advance of due dates for Renewals (LOC's) or Continuation Certificates (Surety Bonds), as reduction reviews in progress do not affect due dates for these documents.
Surety Renewal Program
The Surety Renewal Program ensures Land Development Sureties remain current and in effect until such time requirements for release have been met. Courtesy Copies are provided to Banks, Surety Companies and Surety Agents.
Renewal Notices:
- Mailed 3 months prior to Surety Term Expiration;
- Generated by Bond Administrator at the end of each month;
- Indicate the due date (45 days prior to Surety Term Expiration) for the required Letter of Credit Renewal Amendment or Surety Bond Continuation Certificate;
- Provide requirements for surety release/return;
- Indicate reduction eligibility and guidelines for requesting reduction;
- Provide contact information for Land Development Staff overseeing the bonded work; and
- Include information sheet to confirm contact information on file for Developer/Builder, Financial Institution or Surety Company (and Surety Agent, if applicable).
Renewal Warnings:
- Mailed 30 days prior to Surety Term Expiration;
- Mailed certified under City Treasurer's signature;
- Reference date of original renewal notice and missed deadline for providing the renewal;
- Alert Developer/Builder that the City of Charlotte will initiate the process of cashing the Letter of Credit if a renewal is not received in our office by (expiration date) – 14 days (proceeds to be maintained as a cash surety until such time requirements for surety release have been met).
Surety Release/Return
The following requirements apply:
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Subdivision Sureties (City Limits or Annexed Areas) - Must be kept current and in effect until such time a final inspection is performed, outstanding items are addressed, and the streets are accepted by the City of Charlotte for maintenance (streets listed in the Street Acceptance Report).
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Subdivision Sureties (Extra-Territorial Jurisdiction) - Must be kept current and in effect until such time a final inspection is performed, outstanding items are addressed (including the submission of required as-builts and copies of recorded plats), and the appropriate City of Charlotte Site Inspector accepts the project.
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Sidewalk Sureties - Must be kept current and in effect until such time a final inspection is performed, outstanding items are addressed, and sidewalk improvements guaranteed by the surety are accepted by the appropriate City of Charlotte Site Inspector. Please contact your Site Inspector directly to arrange a final inspection for the purpose of surety release. Upon approval, the Site Inspector will issue a written directive to Bond Administration to release the surety.
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Tree Planting Sureties - Must be kept current and in effect until such time a final inspection is performed, outstanding items are addressed, and the Tree Planting improvements guaranteed by the surety (including Tree Planting requirements in Common Open Space) are accepted by the appropriate City of Charlotte Urban Forester. Please contact your Urban Forester directly to arrange a final inspection for the purpose of surety release. Upon approval, the Urban Forester will issue a written directive to Bond Administration to release the surety.
Upon release, a transmittal letter is processed to the Developer or Builder along with a copy of the surety document (Letter of Credit or Surety Bond). The Original surety document, along with a courtesy copy of the transmittal letter, is provided to the Bank or Surety Company (Surety Agents receive courtesy copies of transmittal letters and copies of Surety Bonds).
Checks to return Cash Sureties are issued by Finance, and are sent under separate cover from the transmittal letter – usually within the next 7-10 business days.
Surety Forms (Required Surety Formats)
"Automated" Versions (for use in MS Word, v. 2000 or later) afford the following benefits:
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Ease of use for our Customers and their Banks, Surety Agents and Surety Companies;
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Increased assurance that new Letters of Credit and Surety Bonds submitted to Land Development will meet requirements;
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Reduced frequency of Land Development requests for corrective riders and amendments; and
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Collection of comprehensive contact information to ensure prompt communication of surety receipt, renewal, reduction, release, and return.
"Form" Versions for customers who may be more comfortable entering information on a hard copy (by hand or with a typewriter).
Required Surety Formats
"Automated" Versions (Intended for completion in Microsoft Word, version 2000 or later)
"Form" Versions (Intended for hard-copy distribution and manual completion)
Bond Administration - Programs and Options
Sidewalk Program
Historically, required sidewalk for an entire project would be installed by the Developer prior to home construction. The increased traffic, heavy vehicles, and large equipment associated with subsequent home-construction resulted in extensive sidewalk damage which required repair, and often replacement, at the expense of the Developer.
The Sidewalk Bond Program was developed to allow the posting of a separate surety (usually posted by the Builder) specifically as a guarantee of sidewalk improvements associated with home lots. Sidewalk improvements are installed following completion of each home, reducing construction-related damage and expense.
With a Sidewalk Surety in place, the Developer can complete all infrastructure improvements (storm drain, street, curb, gutter, etc.); complete a final inspection; successfully apply for street acceptance; and have their Developer Subdivision Surety released and returned to them.
To participate in the Sidewalk Program, the Owner must request calculation of a separate sidewalk surety on the Surety Preferences Selection Form initially submitted with the plat to the Charlotte-Mecklenburg Planning Commission.
Important Notes Regarding the Sidewalk Program:
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Lots are eligible for a sidewalk bond only if they front right-of-way that is part of the same plat;
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Required sidewalk associated with common open space and with right-of-way that extends into adjacent plats will be covered by the Developer Subdivision Surety, and must be installed prior to the final inspection and Formal Street Acceptance.
Surety Reports
The following reports allow you to quickly find, and view the details of, any surety currently on file with Land Development (the "Sureties by Principal" and "Sureties by Project" reports also include released/returned sureties). These Reports provide a wealth of information, such as:
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Surety Purpose (Improvement Type; i.e., Subdivision, Sidewalk, Tree)
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Surety Type
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Current Surety Amount
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Applicant/Principal Name
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Complete or Last 4 digits of the Surety Document Number (Bond#, Letter of Credit#, Receipt#)
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Original Effective Date
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Requirements for Release/Return
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Project Status, Completion Percentage, Performance Rating of Applicant/Principal
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Name/contact info for Land Development staff overseeing bonded work/requirement
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Surety Status
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Next due date of Renewal or Continuation Certificate
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Reduction Eligibility
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Reduction Date and Original Amount
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Date Released/Returned
Select the Report that best meets your needs (please allow a moment for reports to open - Internet traffic may affect download time):
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Biannual General Surety Status Report – Land Development implemented a Biannual General Surety Status Inquiry/Report Program designed to assess risk exposure for outstanding public improvements guaranteed by Surety Bonds, as well as public improvements covered by Letters of Credit and Cash Deposits (for which the City of Charlotte assumes the role of Surety). It is understood that the information contained herein is merely an expression of opinion. By providing this information, the City of
Charlotte is not prejudicing its rights, or affecting the liability of the Surety under any Surety Bond. The information is considered to be a matter of public record, and is furnished/made available as a courtesy to interested parties (i.e., Principal, Surety Company, Agent; Applicant, Issuing Bank; Charlotte Property Owners). In furnishing this information, no guaranty or warranty of accuracy or correctness is made and no responsibility is assumed as a result of reliance by the interested party.
The General Surety Status Report is available for viewing in 3 convenient formats:
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Projects Past Due for Completion by Principal - Lists Developers and Builders with sureties on file for projects where the initial surety was posted greater than two years previous to the current date. The purpose of the Land Development Bond Program is to ensure the timely installation of required public improvements in accordance with the Charlotte-Mecklenburg Land Development Standards (CMLDS). Sureties guaranteeing the completion of these required improvements shall be posted for a maximum of two (2) years (CMLDS, III.C.2.). This report provides the project's performance level and status history, especially for sureties over four (4) years that will be affected on 01/01/2007 by the revised
Land Development Surety Acceptance Policy.
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Bond Administration Activity Report Illustrates:
Active Sureties on File (Total Counts by Type – Cash, Letters of Credit, Surety Bonds and Counts by Time Elapsed Since Initial Posting);
Surety Activity (New, Returned, Reduced);
Surety Correspondence (Volume by Type);
Project Surety Requirement Notifications (Volume by Process (Initial Calculations, Recalculations by Request, Revised Calculations).
- Banks with Letters of Credit Currently on File
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An Overview - Surety Types and Their Applications
When Land Development requires a surety for a project, the developer/builder has the option of providing a Letter of Credit, a Surety Bond, or a Cash Deposit. In the event of developer/builder failure, each of these surety types provides the City of Charlotte with a resource to contribute to the completion of the project in accordance with Subdivision ordinance. However, the surety types differ in their purpose and application.
Description: Developers/Builders obtain Letters of Credit from banks where they have established lines of credit/open loans.
Protection Afforded: A letter of credit serves as a financial resource for the completion of improvements by the City of Charlotte in the event of Developer/Builder default.
Term: Letters of Credit are generally effective for a term of from one to two years, with the expiry date clearly indicated on the document. The City of Charlotte requires a renewal amendment to be provided 45 days prior to the expiry date of the Letter of Credit. Once the expiry date on a standard Letter of Credit has passed, the document has no value - the financial protection is lost.
Description: A Surety Bond is an agreement under which one party, the Surety (the surety company), guarantees to another party, the owner or Obligee (the City of Charlotte), that a third party, the Principal (the developer or builder), will perform a contract (the subdivision plat application) in accordance with the terms and conditions of the contract agreement.
There are several types of Surety Bonds - the type required by the Land Development Division is a "Performance Bond" - which protects the City of Charlotte from financial loss should the Principal fail to perform the contract (complete the required public improvements).
The Surety investigates the financial history and past performance of the Principal before underwriting a surety bond. The Surety evaluates the Principal's "Four "C's" - Character, Continuity, Capital and Capacity. This is accomplished with a thorough review of references, experience, ability, financial strength, credit history, established relationships and lines of credit.
Establishing an initial relationship with a Surety requires an investment of time and effort on the part of the Principal - the Surety must be satisfied that the developer is a well-managed, profitable enterprise that keeps promises, deals fairly and performs obligations in a timely manner.
Surety Bonds are distinctly different from insurance products. Since surety bonds guarantee a Principal's performance, the Surety fully expects that the Principal will honor their obligations. The Principal signs an indemnity agreement with the Surety that obligates the named indemnitors to protect the Surety from any loss or expense in the event of a claim against the bond.
Protection afforded: A surety bond may provide financial and/or project management resources for the City of Charlotte. In the event of Principal default, the Surety may: finance completion by the existing developer; assume responsibility and complete the project using developers of its choosing; or pay the Obligee (the City of Charlotte) the amount required to complete the project. Payment to the Obligee will never exceed the "penal sum" (face amount) of the bond; therefore, an accurate bond estimate is critical to ensure project completion in the event of Principal default.
Term: Surety Bonds generally specify a term of one to two years within which the required improvements will be completed. The City of Charlotte requires a "continuation" or "verification" certificate to be provided by the Surety 45 days prior to the end of the last verified term of the bond. The continuation certificate amends the original document to reflect the extension of the effective date of coverage shown on the original bond for a period of no less than one full year.
Description: A check or money order made payable to, and deposited in the account of, the City of Charlotte.
Protection Afforded: A cash surety serves as a financial resource for the completion of improvements by the City of Charlotte in the event of Developer/Builder default.
Term: A Cash Deposit provides protection until the City of Charlotte returns the funds to the developer/builder. No renewal or policy terms are required.
