What Are Construction Warranty Bonds And How Are They Useful
A construction warranty bond is a form of surety that’s used in the construction industry so that owners can be sure that contractors are going to complete tasks and jobs to a good standard. In addition to being used to ensure that contractors complete their jobs properly, these bonds also provide protection for property owners. If a contractor doesn’t complete a job to a satisfactory degree or causes damage to the owner’s property, then the bond will ensure that they have to repay the owner or repair the damages.
This post will explore how these bonds are useful:
Peace of Mind
For owners of property and developers, construction warranty bonds confer peace of mind. There is no longer a need to worry about workmen not completing jobs to a satisfactory standard because construction warranty bonds ensure that they are legally obliged to do so. While the maintenance period on a bond varies, most will also guarantee that contractors have to complete maintenance for a fixed period of time, also. All of this ensures that owners and developers don’t have to worry about shoddy workmanship and contractors refusing to help after they have finished a project.
Suitable Alternative
Construction warranty bonds are much better than the other types of bonds that can be taken out. The alternatives to construction warranty bonds are financial bonds. The main alternatives to construction warranty bonds are letters of credit and bank bonds. A lot of people do not want to take out financial bonds. Construction warranty bonds are also extremely easy to access and very affordable, which makes them a great option. In addition, when contractors purchase these bonds, their liquidity is enhanced.
Work Guarantee
When a construction warranty bond is taken out, it is a guarantee for developers and property owners that the jobs they are contracting are going to be completed. If a contractor didn’t have a bond in place, then chasing them and convincing them to complete the job or make repairs could be a very complex and lengthy process. With one of these bonds in place, developers and property owners are able to legally compel contractors to make repairs and complete jobs that they have been contracted for. If the contractor does not return to do what’s requested of them, then they can be taken to court.
Reliable Responses
For developers, one of the main advantages of construction warranty bonds is that they only receive responses from workmen who are reliable and confident in their abilities to complete the tasks specified in the hiring post. A big problem in the construction industry is workmen who aren’t qualified or able to complete jobs bidding on contracts, purely because they want the money. When a bond is introduced to the equation, it means that these people aren’t able to bid, because if they did and they weren’t able to complete the job, they would be in a lot of trouble legally and financially.
Professional Contractors
The contractors who bid for work and have construction warranty bonds are considerably more professional than those who don’t. The reason for this is that they are confident they will be able to complete the work that they have been contracted for. If you are a developer or property owner that’s considering hiring a contractor to complete work for you, then it is essential that you find a contractor who’s experienced and professional. Working with inexperienced and unprofessional contractors can be an absolute nightmare, mainly because they tend to take shortcuts and then can’t (or won’t) rectify the mistakes that they have made.
Total Protection
The greatest advantage of construction warranty bonds is by far the fact that it confers total protection, meaning that no matter what happens, property developers and owners are able to ensure that the work they want to be done is completed properly.
A big problem in the construction industry is cowboy builders. A cowboy builder is a contractor who leaves jobs incomplete and doesn’t commit themselves to the work that they are doing. Requiring construction warranty bonds as a prerequisite to taking on contractors will help you to avoid ever having to deal with them. Something else that’s worth mentioning is that offering construction warranty bonds also benefit contractors because they are able to secure work. Because of all of the benefits of these bonds, owners and developers want them. By offering them contractors can secure contracts, taking work away from contractors not offering them.
Whether you are a developer, owner, or contractor, construction warranty bonds are worth taking out. A bond will help you to ensure that all parties are comfortable and confident, not to mention protected against any negligence.