If you’ve ever driven around Las Vegas, or any other growing city, you may have noticed that sometimes you’ll be driving down a road with 2-3 finished lanes in each direction when all of a sudden the traffic merges down to a single lane. Then you notice that you’re passing another vacant desert lot that has yet to be developed by its owner. This has to do with the off-site development of that vacant lot. Off-Site Improvement Performance Bonds help this kind of construction actually get off the ground.
The term “off-site development” has to do with the completion of the roadways, sidewalks, utilities, etc for that site. Usually the off-site developments are not completed until the land starts to be developed for its intended purpose.
Here are the basic phases of off-site development.
- The County Department of Public Works will give an off-site improvement construction estimate to the property developer. This is similar to other kinds of construction estimates with the majority of work coming from asphalt paving, excavation & grading, surveying, water & sewer connections, and streetlights.
- An estimate is given for the cost of the work and the developer will enter into an off-site agreement with the municipality, Clark County Nevada in our case. In order to maintain uniformity of building kind & quality and satisfy codes, the County is going to perform the off-site improvement work.
- Like other construction jobs, the County requires a guarantee from the property developer that they will be able to pay the cost of the off-site improvements. This is called bonding.
- The bonding options for the developer are:
- Secure a Performance Bond from an approved surety
- Cash-In-Lieu of Bond Agreement (Cannot by more than $250K)
- Cash Bond
- Once a bonding option is obtained then the Off-Site Improvement Agreement (OSIA) can be executed and the job permit granted.
Off-Site Improvement Performance Bonds FAQs
Q: What is the most common bonding option?
A: In our experience most developers opt to obtain a performance bond rather than tie up their working capital.
Q: How much does the performance bond cost?
A: Like other kinds of bonds, the rate is largely based on the applicant’s credit worthiness and history. Adverse actions, like bankruptcies, will affect the rate and may even affect eligibility. Typical rates are 1.5% – 10% of the bond limit the County requires.
Q: Can the premium be paid in installments?
A: No, the bond premium is due in full before the bond can be executed.
Q: What is the average turn around time?
A: These bonds take on average 7-10 business days from start to finish. One step that requires additional time is sending the actual blue cardstock bond form required by Clark County to the surety underwriter to use for the bond as electronic bonds are not available.
Click here for Clark County Off-Site Improvement Bonding Tips
If you are looking for a bond right now, fill out the form below and we will get to work for you.