A bill signed into law last week by Governor Pat McCrory will help address issues developers are having with bonding and letters of credit for subdivision roads and other improvements.
HB 721, ‘Subdivision Ordinances/Land Development Changes’, limits the ability of local governments to hold developer performance guarantees, such as bonds or letters of credit, for excessive periods before accepting the improvements. It also prohibits the practice of putting holds on permits or COs in one portion of a subdivision as leverage to require improvements to other parts of the development.
Surety bonds or letters of credit are typically held by local governments as security for the completion of subdivision roads and other improvements in a development. Some local governments have required guarantees to be obtained in excessive amounts (e.g., 200% of the actual estimated cost of the improvements) while others have failed to timely release the guarantees after completion of all improvements.
REBIC joins the North Carolina Home Builders Association (NCHBA) in expressing our appreciation to Representative Rob Bryan (R-Mecklenburg) for his leadership on this effort, as well as our other principal House sponsors, Rep. Dan Bishop (R-Mecklenburg), Rep. Skip Stam (R-Wake) and Rep. John Bradford (R-Mecklenburg).