Iredell County Subdivision Bond: A Comprehensive Guide

July 5, 2021

Iredell County Subdivision Bond

This guide provides information for insurance agents to help their customers obtain an Iredell County Subdivision bond

At a Glance:

  • Average Cost: 
    • $100 for bonds with limits of less than $25,000
    • For bonds with limits of $25,000 or higher, between 0.5% to 5% of the bond amount per year based on the applicant’s credit history
  • Bond Amount: 125% of the cost of installing the required public improvements
  • Who Needs it: Developers in Iredell County, North Carolina that are seeking to obtain final approval on a subdivision plat before constructing all required public improvements
  • Purpose: To ensure the county will receive compensation for financial harm if the developer fails to construct the required public improvements
  • Who Requires the Bond: Iredell County, North Carolina

Background

Iredell County Code of Ordinances 8.6 requires developers to obtain approval before recording subdivision plats with the County Register of Deeds. As part of the process of obtaining approval, developers must construct public improvements such as roadways, water and sewer systems, erosion controls, and sidewalks. However, developers seeking to obtain plat final approval before constructing all required improvements can do so by purchasing a surety bond.

What is the Purpose of the Iredell County Subdivision Bond?

Iredell County requires developers that have not completed all required public improvements to purchase a surety bond as part of the application process to obtain final approval on a subdivision plat. The bond ensures that the county will receive compensation for financial harm if the developer fails to abide by the regulations outlined in Iredell County Code of Ordinances 8.9.1. Specifically, the bond protects the county if the developer does not construct all roadways, water and sewer systems, erosion controls, and sidewalks. In short, the bond is a type of insurance that protects the county if the developer fails to complete all improvements.

Iredell County Subdivision Bond Form

Iredell County Subdivision Bond Form

How Can an Insurance Agent Obtain an Iredell County Subdivision Surety Bond?

BondExchange makes obtaining an Iredell County Subdivision Bond easy. Simply login to your account and use our keyword search to find the “Iredell County” bond in our database. Don’t have a login? Enroll now and let us help you satisfy your customers’ needs. Our friendly underwriting staff is available by phone (800) 438-1162, email or chat from 7:30 AM to 7:00 PM EST to assist you.

At BondExchange, our 40 years of experience, leading technology, and access to markets ensures that we have the knowledge and resources to provide your clients with fast and friendly service whether obtaining quotes or issuing bonds.

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How is the Bond Amount Determined?

Iredell County Code of Ordinances 8.9.1 dictates that the bond amount must be equal to 125% of the estimated cost of constructing the public improvements.

Is a Credit Check Required for the Iredell County Subdivision Bond?

A credit check is not required for Iredell County Subdivision bonds with limits of less than $25,000. Because these bonds are considered relatively low risk, the same low rate is offered to all developers in Iredell County, regardless of their credit history.

Surety companies will run a credit check on the developer to determine eligibility and pricing for subdivision bonds with limits of $25,000 or more. Developers with excellent credit and work experience can expect to receive the best rates. Developers with poor credit may be declined by some surety companies or pay higher rates. The credit check is a “soft hit”, meaning that the credit check will not affect the developer’s credit.

How Much Does the Iredell County Subdivision Bond Cost?

Iredell County Subdivision bonds with limits of less than $25,000 cost just $100.

Bonds with limits of $25,000 or higher can cost anywhere between 0.5% to 5% of the bond amount. Insurance companies determine the rate based on several factors including your customer’s credit score and experience. The chart below offers a quick reference for the cost of a $25,000 bond requirement.

$25,000 Subdivision Bond Cost

Credit Score Bond Cost (1 year)
625+ $125
600 – 624 $375
55o – 599 $625
525 – 549 $600
500 – 524 $1,250

Who is Required to Purchase the Bond?

Iredell County requires developers that have not completed the required public improvements to purchase a surety bond as a prerequisite to obtaining final approval on their subdivision plats. To paraphrase Iredell County Code of Ordinances 8.5, a subdivision is a portion of a larger tract of land that has been divided into two or more smaller parts for the purposes of development and/or sale.

Exemptions to the bonding and approval requirements include:

  • The combination or recombination of previously subdivided lots if the total number of lots does not increase
  • The division of land into parcels of more than 10 acres or more if no street right-of-way dedication is required
  • Public purchases of strips of land for the purpose of widening streets or public transportation corridors
  • A division of a larger tract of land that is no larger than 2 acres and consists of no more than three separate lots owned by a single owner each and has street right-of-way dedication

How Do Developers Obtain Final Subdivision Plat Approval In Iredell County?

Developers in Iredell County must navigate several steps to obtain approval on their subdivision plats. Below are the general guidelines, but developers should refer to the County Code of Ordinances as well as the application checklist for details on the process.

Step 1 – Determine the Subdivision Type

Iredell County classifies subdivisions into six distinct categories and requires developers to complete a specific application process based on the type of subdivision they are applying for approval for. Below are different classifications of subdivisions in Iredell County:

    • Family: A subdivision that a property owner gives to his/her immediate family as a gift or that a person inherits as part of the landowner’s will
    • Minor: A subdivision where:
      • No new roads are proposed
      • No rights-of-way or easements are dedicated and no utilities are extended
      • No more than 10 lots will exist after the subdivision’s completion
    • Major: A Subdivision where:
      • New streets or roads are proposed
      • New utilities are proposed to be extended
      • More than 10 lots are created after the subdivision’s completion
    • Planned Unit Development (PUD): A development consisting of a type of major subdivision that is located within a conditional district
    • Cluster Development: Type of major subdivision that allows smaller than minimum lot sizes to preserve open space and environmental resources
    • Special: A subdivision for purposes other than general, residential, or commercial development

*The remaining steps focus exclusively on how to obtain approval for major, PUD, and cluster subdivisions as they are the only ones that require a bond. To learn more about the approval process for family, minor, and special subdivisions, check out the County Code of Ordinances.

Step 2 – Schedule a Pre-Application Meeting

Iredell County requires developers to schedule a meeting with the Planning & Development Department. During the meeting, the department will walk to the developer through the application process, provide them with any forms that must be completed, and answer any questions they may have. The developer must bring copies of their completed sketch plans to the meeting.

Step 3 – Submit a Preliminary Plat Application

After attending the pre-application meeting, developers must submit their completed preliminary plat application, including a $200 fee, to the following address:

349 N. Center Street
Statesville, NC  28677

Developers must complete the application in its entirety and submit the following items:

    • Ten full-size paper copies
    • One 11” x 17” copy
    • Digital copy in DXF or DWG format
    • Two full sets of construction drawings that include:
      • Stormwater plan and analysis
      • Grading and Erosion Control plan as well as written approval from Iredell County Soil and Erosion Control
      • Verification of submittal to the North Carolina Department of Environmental Quality for community or public sanitary sewer and water systems

The county’s Technical Review Committee must approve the developer’s application before preliminary approval can be granted.

Step 4 – Purchase a Surety Bond

Developers that wish to obtain final plat approval before completing all required improvements must purchase and maintain a surety bond in an amount equal to 125% of the estimated cost of constructing the improvements.

Developers that choose to obtain a bond must mail a completed improvement guarantee application to the following address:

349 N. Center Street
Statesville, NC  28677

Step 5 – Apply for Final Approval

Developers are required to apply for final plat approval within two years after obtaining preliminary approval. Developers must submit their completed applications, including another $200 fee, to the following address:

349 N. Center Street
Statesville, NC  28677

Developers must complete the application in its entirety and submit the following items:

    • Five full-size paper copies
    • One mylar copy
    • One paper copy of recorded plat
    • Digital copy in DXF or DWG format

What are the Insurance Requirements for Subdivision Approval in Iredell County?

Iredell County does not require developers to purchase liability insurance as a prerequisite to obtaining subdivision approval. However, developers may need insurance before obtaining a local license or building permit. Developers seeking final approval before completing the required improvements must purchase a surety bond.

How Do Iredell County Developers File Their Subdivision Bonds?

Developers in Iredell County should submit their completed bond forms, including the power of attorney, to the following address:

349 N. Center Street
Statesville, NC  28677

The surety bond requires signatures from both the surety company that issues the bond and from the applicant. The surety company should include the following information on the bond form:

  • Legal name of the entity/individual(s) buying the bond
  • Surety company’s name and state of incorporation
  • Entity requiring the bond
  • Bond amount
  • Date the bond goes into effect
  • Date the bond is signed

What Can Iredell County Developers Do to Avoid Claims Against Their Subdivision Bonds?

To avoid claims on their subdivision bonds, developers in Iredell County must ensure that they adequately construct all required public improvements within two years of obtaining final approval.

What Other Insurance Products Can Agents Offer Developers in Iredell County?

Most reputable developers will purchase liability insurance. Bonds are our only business at BondExchange, so we do not issue any other types of insurance, but our agents often utilize brokers for this specific line of business. A list of brokers in this space can be found here.

How Can Insurance Agents Prospect for Iredell County Subdivision Bond Customers?

Iredell County conveniently provides a public database of recent subdivisions. We also suggest contacting the Planning & Development to obtain a list of developers with subdivision plats awaiting approval. Contact BondExchange for additional marketing resources. Agents can also leverage our print-mail relationships for discounted mailing services.

2022-12-02T16:59:09-05:00