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Subdivision related Bonds

Subdivision related bonds are a vital tool for Councils to manage and mitigate the risks associated with engineering/civil works, ensuring that public infrastructure is completed to the highest standards and safeguarding the interests of the community.

Types of Bonds

Council requires refundable bond securities to be held for a range of circumstances:

  • Outstanding Works – where the Developer is to perform work on public land or assets, Council is to hold a bond equal to 150% of the value of outstanding or deferred works, to ensure that the Developer’s obligations under the DA are met.
  • Defects Liability and Maintenance – as part of handover of new public infrastructure to Council, the Developer is responsible for repairing any defects or failures that occur and maintaining landscape plantings for a 12-month period, and Council retains a bond equal to 5% of the total asset value to guarantee performance.
  • Environmental Management – similarly for habitat remediation areas or offset planting areas, Council retains a bond to guarantee performance of the Developer’s obligations under an approved Vegetation Management Plan or Koala Plan of Management. For example, this may include work such as planting, weed management, fencing out and ecologist inspections.
  • Stormwater Treatment Infrastructure – the developer is responsible for the maintenance of stormwater treatment infrastructure, and provision of a bond in accordance with agreements arranged through Council’s Infrastructure Section.
  • Other bonds may be required as a condition of consent to manage special risks for certain development sites. For example, Transport for NSW (TfNSW) / RMS may require a separate bond for works on classified roads or traffic signals.

Bond Lodgement

Prior to a Developer lodging a bond, a quote is to be requested from Council to confirm the required amount. The quote request must also state the time period within which the Developer will complete the work. If not completed within that date, Council may require completion and commence the process to draw on the bond if the work is not completed.

The Developer is to provide a cost estimate prepared by a qualified person (e.g. engineer or quantity surveyor) on which the bond amount is to be based. The estimate is to include all costs that would be incurred if Council were to execute the work including plant, materials, labour, profit and GST at market rates. Council staff may increase this amount to cover any risks which the Developer has not adequately covered in the estimate.

Bond securities may be paid either in cash, or as a bank guarantee issued by an Australian Authorised Deposit-taking Institution. Bank guarantees must be unconditional and have no expiry date.

When a bond is lodged it is to be accompanied by a completed bond lodgement form to state the project, the bond purpose and the contact details of the lodging party.

 

 

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    Bega NSW 2550

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    Australia

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