Subdivision Bonds

Get Bonded Today

Offering Pay on Demand Sub-Divisions Bonds for Developers

What is a Subdivision Bond?

A pay on demand subdivision bond is a surety bond that is becoming more widely accepted by municipalities in Ontario and across Canada. This bond is being used to meet the security requirements under a Subdivision or Site Plan Agreement, in place of a Letter of Credit. The bond essentially guarantees the same obligations that are currently being secured by a letter of credit. It guarantees the completion and adherence to the underlying subdivision agreement. The bond wording can also be customized to meet each municipalities unique requirements.

Subdivision Bond Key Highlights


  • On Demand Surety Bond

    The bond wordings are customizable to each municipality and act in the same manner as a Letter of Credit

  • Subdivision Bond Costs

    The average cost for a subdivision bond is between 0.75% to 1.5% of the bond value.

  • How to Qualify

    The process includes a review of the financial position of the developer as well as the experience and resources of the developer.

Why should you utilize a subdivision bond in lieu of a Letter of Credit?

The provision of a letters of credit for each subdivision agreement is not a sustainable model for developers. Letters of credit tie up cash and the borrowing capacity of developers and can often be held by municipalities for several years. A subdivision surety bond, while meeting the same obligation for the municipality, is underwritten very differently than a letter of credit. The surety companies are more interested in the overall experience and financial health of the developer and the viability of each project.

Generally speaking, there is no hard security requirement by the surety company when issuing these bonds. The bond companies commonly rely on a standard Indemnity Agreement for security when issuing subdivision bond. This approach leaves the developer with all of their cash in hand and access to credit available.

We consider this a very relevant issue to the industry. Developers need access to their cash and credit facilities to continue meeting the demands of Canada’s ever-growing housing supply crisis.

FCA is Canada’s Developer Surety Expert Since 1919

FCA has been providing Canadian companies with surety bonds since 1919. We have set the industry standard for turnaround time for both new and existing clients. We pride ourselves in ensuring our clients never miss out on an opportunity.


While letters of credit are commonly used, usage of subdivision bonds is growing across Canada. Cities that have accepted subdivision bonds include:

  • City of Edmonton
  • City of Calgary
  • City of Grande Prairie
  • City of Surrey
  • City of Pickering
  • City of London
  • City of St. Thomas
  • Municipality of Chatham‐Kent
  • Town of Innisfil

This list is continually growing due to the outreach of the Surety Association of Canada and the Ontario Home Builder’s Association. Be sure to check with FCA for information on your specific municipality.

The application process for a Sub Division Bond is similar to the requirements for applying for construction financing:

  • Most recent financial statements for the development company
  • A copy of the project budget including hard and soft costs
  • A copy of the construction financing agreement or letter of intent
  • A copy of site plan or sub division agreement
  • Land title details and appraisal if available
  • Any Environmental Audits and Geotechnical Reports
  • A completed Developer Surety Application
  • A completed Personal Net Worth statement for each of the project shareholders

We highly recommend you work with an experienced Developer Surety brokerage such as FCA to ensure you are receiving the possible best terms and best advice for your project.

Unfortunately the Tarion Freehold bond wording is still not widely accepted by surety companies across Canada. However, we are actively working with Tarion to deliver an improved bond wording and are hoping for a resolution this year. Despite this challenge, in certain cases we have been successful in securing freehold bonds under the current bond wording for developers. Please contact us to learn more.

As a long-standing surety brokerage we have excellent working relationships with all of the surety companies currently writing developer surety business in Canada. Our key partners include:

  • Intact
  • The Guarantee Company of Canada (GCNA)
  • Trisura Guarantee
  • Travelers
  • Sovereign Insurance
  • Berkley Canada

We know these companies well and understand their underwriting philosophies and principles. This is very important as no two sureties are alike. By understanding the appetites of each company, we are able to place our developer clients with the right surety partner. This ensures not only excellent terms but also a long-standing relationship that supports the growth and flexibility that our developers demand.

Why Choose FCA Surety?

Ease of Doing Business

We set the industry standard for turnaround time for both new and existing construction bond clients, you can expect excellence.

Trusted by Surety Markets

Outstanding relationships with all of the most reputable construction surety bond markets in the industry, giving you the power of choice.

Surety is What We Do

Our industry-leading team boasts seven full time dedicated surety professionals with a combined 80+ years of construction surety bond experience.


Our organization has been working with FCA Surety Bonds and Insurance for over 2 years. The team, led by Jamie Collum and Warren Griffiths, exceeds expectation in service, responsiveness and knowledge.


Jamie and Mike from FCA did a great job in assisting me throughout the process. Not only from the bonding requirement with Tarion but also other aspects relating to obtaining project approvals and project insurance. Would definitely highly recommend them.


FCA is one of the best companies we have had the pleasure of working with so far. Very professional, fast and always on time. Looking forward to continue working with them.


Get A Free Consultation Today!

It all starts with a conversation today with one of our surety bonding experts. Once we determine which type of surety bonds you require, we will work tirelessly to expedite these bonds for you.

1-844-241-5656   OR   Get a Quote