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Our Amended Performance Bond Law: Sensible Changes, But More Needed

September 21, 2011

Authors: Timothy S. Hollister, Christopher J. Smith

Public Act 11-79, effective October 1, 2011, makes several significant changes in how developers and builders post performance bonds with municipalities to ensure the proper and timely construction of infrastructure and key amenities in site plan approvals, and public improvements (roads, infrastructure, and erosion controls, etc.) in subdivisions. This new law contains several straightforward improvements to the process of calculating, posting, and releasing performance bonds. However, it also contains language about the obligation of towns to accept performance bonds that, we agree, is somewhat confusing and needs clarification.

Unfortunately, in response to this confusion, we are starting to witness some towns amending regulations to prohibit the use of all performance bonds going forward. As explained in the brief analysis that we have prepared, we think that prohibiting performance bonds is unnecessary, and will slow economic development at a very bad time. To view our analysis of the new law, please click here.

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