Gates County Improvement Guarantee Bond: A Comprehensive Guide

This guide provides information for insurance agents to help their customers obtain a Gates County Improvement Guarantee bond

At a Glance:

• Average Cost: 
  • Less than $25,000 limit: $100
  • $25,000 limit or more: Between 0.5% to 5% of the bond amount per year based on the applicant’s credit history
• Bond Amount: 125% of the estimated costs of constructing the public improvements (more on this later)
• Who Needs it: Developers in Gates County, North Carolina that are seeking to record subdivision plats or obtain a building permit 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: Gates County, North Carolina

Background

Gates County Land Usage Ordinance 152.214 requires developers to obtain site approval before recording subdivision plats or receiving a building permit. 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 approval before constructing all required improvements can do so by purchasing a surety bond.

What is the Purpose of the Gates County Improvement Guarantee Bond?

Gates County requires developers to purchase a surety bond to record a subdivision plot or receive a building permit before completing the required public improvements. The bond ensures that the county will receive compensation for financial harm if the developer fails to abide by the regulations outlined in Gates County Land Usage Ordinance 152.214. 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

How Can an Insurance Agent Obtain a Gates County Improvement Guarantee Surety Bond?

BondExchange makes obtaining a Gates County Improvement Guarantee bond easy. Simply log in to your account and use our keyword search to find the “Gates County” bond in our database. Don’t have a login? Gain access now and let us help you satisfy your customers’ needs. Our friendly underwriting staff is available by phone at (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?

Gates County Land Usage Ordinance Ordinance 152.214 dictates that the bond amount must equal 125% of the estimated total cost of constructing the improvements. The estimated cost must be determined by a licensed professional engineer and verified by the county’s consulting engineer.

Is a Credit Check Required for the Gates County Improvement Guarantee Bond?

A credit check is not required for Gates County Improvement Guarantee 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 Gates County, regardless of their credit history.

Surety companies will run a credit check on the developer to determine eligibility and pricing for improvement guarantee 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 Gates County Improvement Guarantee Bond Cost?

Gates County Improvement Guarantee 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 Improvement Guarantee Bond Cost

*The credit score ranges do not include other factors that may result in a change to the annual premium offered to your customers, including but not limited to, years of experience and underlying credit factors contained within the business owner’s credit report.

Who is Required to Purchase the Bond?

Gates County requires developers that have not completed all required public improvements to purchase a surety bond as a prerequisite to recording a subdivision plat or obtaining a building permit.

Exemptions to all approval and bonding requirements include:

• Subdivisions of 10 acres or more with no street right-of-way
• Tracts of land that are no more than two acres, do not take up more than three lots, have one owner, and does not have a street right-of-way
• The combination, or recombination, of portions of previously subdivided lots as long as the total number of lots is not increased
• Land bought by the government to widen or open streets
• Land divided into parcels in accordance with a probated will
• Land bought to establish or expand a private cemetery

How Do Developers in Gates County Obtain Subdivision Plat Approval?

Developers in Gates County must navigate several steps to obtain approval on their subdivision plats. Below are the general guidelines, but developers should refer to the county’s land usage ordinances for details on the process.

Step 1 – Obtain Preliminary Approval

Developers must obtain preliminary approval on their plats. Final approval is granted after the developer has obtained preliminary approval and purchased their improvement guarantee (surety bond). To obtain preliminary approval, developers must:

1a – Attend a Pre-Application Process

Gates County requires developers to attend a pre-application conference with the county’s Subdivision Administrator before obtaining a preliminary plat approval. During the conference, the administrator will be able to get a better understanding of the project as well as walk the developer through the application process and answer any questions they may have. To schedule a conference, developers should contact the county’s Planning and Zoning Department.

*After obtaining preliminary approval, developers can request another pre-application process before applying for final approval

2b – Complete the Application

Developers must submit a completed application, prepared by a state-authorized licensed professional, to Subdivision Administer at the following address:

200 Court Street
P.O. Box 411
Gatesville, NC 27938

The application must consist of detailed drawings, descriptions, and specifications of the project as well as all other items required by the Subdivision Administrator, who will inform the developer of these requirements in the pre-application conference. Additionally, developers may have to submit an environmental impact statement depending on the type of land the development is located on.

*Important Note: Developers must submit an erosion control plan if they plan on engaging in land-disturbing activities on tracts where more than one bordering acre is to be uncovered.

1c – Await Approval

The county’s Technical Committee and Planning Board will review the developer’s application and present a recommendation to the County Board of Commissioners, who will either approve or reject the application.

Step 2 – Apply for Final Approval

Developers may apply for final approval after obtaining preliminary approval from the Board of Commissioners. To obtain final approval, developers must:

2a – Attend a Pre-Application Conference (Optional)

Developers may schedule another pre-application conference with the Subdivision Supervisor if they so choose. Though not required, it is recommended that developers schedule this conference to ensure they have a complete understanding of what is required of them during the application process.

2b – Purchase a Surety Bond

Developers applying for final approval before completing all required public improvements must purchase and maintain a surety bond.

2c – Complete the Application

All final plat approval applications should be submitted to the Subdivision Administrator at the following address:

200 Court Street
P.O. Box 411
Gatesville, NC 27938

The application must be prepared by a state-authorized licensed professional and be accompanied by a notice from the site engineer indicating that all regulations were followed when preparing it.

Developers must submit their final plat approval application within 12 months of obtaining preliminary approval.

How do Developers Apply for a Building Permit in Gates County?

Developers can apply for a building permit in Gates County by submitting a completed application, including all required fees, to the following address:

Inspections Department
Attn: Scott Powell
200 Court Street
Gatesville, NC 27938

How Do Gates County Developers File Their Improvement Guarantee Bonds?

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

Independence Center
400 W Market Street
PO Box 3427
Greensboro, NC 27402

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 and permit classification 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 Gates County Developers Do to Avoid Claims Against Their Improvement Guarantee Bonds?

To avoid claims on their Improvement Guarantee bonds, developers in Gates County must ensure that they adequately construct all public improvements.

What Other Insurance Products Can Agents Offer Developers in Gates 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 Gates County Improvement Guarantee Bond Customers?

Gates County conveniently provides a public database of active building permits. We also suggest contacting the Planning and Zoning Department 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.