Subdivision Tax Bond: Subdivision tax bond guarantees to the title company or city/county that the taxes associated with the stated parcel of land will be paid for the upcoming tax year. The subdivision tax bond amount is usually a percentage over the actual taxes that is due for the year. For example, if the taxes for the upcoming year is $5,000, the sudvision tax bond will usually be about $6,000.
When requesting a subdivision tax bond on an account that has already been previously submitted to the surety, among the most important information that needs to be provided to the surety are the following information:
- The Bond Request form – this will provide the surety with a basic overview of the current bond being requested.
- A copy of the document from either the title company or city/county showing the property that is in need of the bond and the bond amount.
- Title company or city/county will usually have their own subdivision tax bond form. Submit a copy of the bond form with the submission
- On smaller subdivision tax bond requests (under $100,000), surety will most likely only ask for a completed application, with the most recent business and personal financial statements and most recent business and personal bank statements to verify principal has the sufficient funds to pay the tax.
If the subdivision tax bond is the first bond being requested on behalf of a new developer and/or the size of the subdivision bond exceeds $100,000, the following information might be requested by the surety.
- Developer’s Questionnaire.
- Business financial statements (balance sheet, income statement, statement of cash flows and aging schedule for accounts receivable and accounts payable) for the company’s last 3 fiscal year end.
- Interim Business Financial Statements.
- Personal Financial Statement for all owners of the company
- Articles of incorporation (if corporation), LLC agreement (if business is a LLC) or partnership agreement (if business is a partnership).
- Bank reference letter and last 3 months most recent business and personal bank statements.
- Copy of the trust if any of the owners of the business have their assets held in that trust.