The residential development and homebuilders industry require a guarantee before a project commences. In the event a developer’s surety bond is required Ai Surety Bonding – Affinity Insurance offers Tarion bonds and Excess condominium insurance required in the province of Ontario.
A surety bond, presented as a form of security, helps the developer to utilize cash available to them in supporting the construction process.
The Condominium Act requires the buyer’s money to be held in trust until the recommended security is issued. This security ensures the purchaser’s money is utilized for only the financing of the project.
The bond provides protection from any deposit losses or risk up to but not exceeding $20,000 per dwelling unit, and after transfer of title, the subsequent single-year and double-year warranty coverage offered to purchasers by TARION.
TARION bonds require less cash collateral than letters of credit once a project is completed. A TARION bond application can be processed in a reasonable time frame and terms and condition letter can be sent for your acceptance in a period of 2 to 5 days as long as you deliver all necessary documents and materials. You can apply for a TARION bond as soon as your marketing strategy and preliminary budgets are ready.
Subdivision bonds provide a guarantee/security to local municipalities that the project will be completed by the contractor appropriately.
Bonds are a better approach than a letter-of-credit (LOC) as it’s beneficial to contractors as well as the municipality. These bonds allow the contractor to free up cash flow.
See also Excess Condominium Deposit Insurance
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