Bond Facility

Road and sewer bonds provide a guarantee on behalf of a property developer or house builder that they will complete the roads and sewers to the required standard and within a defined time-frame to enable them to be adopted by the appropriate authority under the relevant Acts.

The bond sum usually represents the authority’s assessment of the cost of constructing the roads and sewers. The period of the bond covers the construction period and maintenance periods until such time as the roads and sewers have been adopted by the relevant authority.

Performance bonds are commonly used in the where an owner or investor may require the developer to assure that contractors or project managers procure such bonds in order to guarantee that the value of the work will not be lost in the case of an unfortunate event (such as insolvency of the contractor).

A contract bond is a guarantee issued by an insurance company in support of an underlying contract. The parties to a contract bond are the contractor, the employer (such as a main contractor or public body) and the guarantor – the insurer.

A landowner may be willing to sell land to a house builder or property developer on deferred payment terms. To give the landowner comfort, a deferred consideration bond can be arranged that will guarantee payment of instalments in the event that the house builder or developer defaults.

This method of bonding frees up the financial recourses of the house builder or developer and gives peace of mind to the seller of land.

In order to fulfil legal obligations under various statutes, a contractor may be required to place a bond in favour of The Environment Agency. A common requirement relates to the operation of landfill sites.

An insurance backed guarantee provides valuable consumer protection for homeowners and increases customers confidence that the installer is reliable and trustworthy.

Although a workmanship guarantee sets out the installing contractors obligation to rectify defects in the installation carried out, unfortunately this does not guarantee that they will always be around.

The purpose of an insurance backed guarantee is to honour the terms of the installing contractor's own guarantee, where unfortunately the installing contractor has ceased to trade and is therefore unable to satisfy remedial claims made against their workmanship guarantee.

Should a homeowner find themselves in this unfortunate situation, they can claim against the insurance backed guarantee should there be a defect with the workmanship and the installing contractor has ceased to trade.

The posting of a duty deferment bond or movement guarantee with HM Customs & Revenue allows you to import and distribute goods prior to payment of customs and excise duty, thereby freeing up your cash flow.