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ARTICLE · 15 DECEMBER 2017

Developer-Buyer Beware: Calling Assumed Improvement Bonds In North Carolina Can Be Complex

Womble Bond Dickinson
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In 2007, Developer Clarion-Reames, LLC ("Clarion") sought to construct a residential housing development in Charlotte, North Carolina.

United StatesReal Estate and Construction
John Cooke
John Cooke
Michael Thelen
Michael Thelen
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In 2007, Developer Clarion-Reames, LLC ("Clarion") sought to construct a residential housing development in Charlotte, North Carolina. Clarion received final approval from the City to record plats for Phase I section of the development, provided Clarion agreed to complete certain road improvements. In 2008, Clarion-Reames obtained a surety bond (the "Bond") to guarantee construction of the improvements. The Bond listed Clarion-Reames as the principal, IFIC as the obligor, and the City as the obligee. Although Clarion obtained the Bond as a precondition to final plat approval of Phase I, Map I — which was to consist of 10 single-family homes — the bonded improvements covered all of the required public road improvements for the entire Phase 1 development, which was to consist of 184 single-family homes.

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