Surety Bond Encyclopedia

Right of Way Bond - Orchard Lakes Estates Homeowners Association in Texas

Brief Summary

This bond is set by the Orchard Lakes Estates Homeowners Association, not by a city or the state, so the amount and the wording come from the association's own rules. Get the association's requirement in writing first, then have the bond written to match it, with the association named as obligee. That keeps your project from stalling with the association over a bond in the wrong amount or on the wrong form.

The Orchard Lakes Estates Homeowners Association in Texas requires a right of way bond for work affecting the rights of way and common areas within its community. The bond names the association as obligee and guarantees that the person doing the work will follow the association's rules and pay for repairing any damage to association property. The association sets the amount and form, so confirm both with the association or its management company before the bond is issued.

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How to Apply for a Right of Way Bond:

Get the association's bond requirement in writing, including the amount and any required form.
Use the principal's name exactly as it appears on the association's application or approval.
Name the Orchard Lakes Estates Homeowners Association as obligee.
Confirm how long the bond must remain in force and how the association releases it.
Deliver the signed bond to the association or its management company as it directs.
Check whether the city, county or utility district also requires a permit and bond for the same work.

Detailed Information About the Texas Right of Way Bond:

Start with the association, not the city

The obligee on this bond is the Orchard Lakes Estates Homeowners Association. Its requirements come from the association's dedicatory instruments, such as the deed restrictions, bylaws and architectural or construction rules. If your work also touches a public street or a utility easement, the city, county or utility district that controls it may require its own permit and bond as well. One does not replace the other.

What the bond guarantees

A right of way bond protects the association if the person doing the work damages streets, curbs, drainage, landscaping or other areas the association maintains, or leaves the work unfinished or out of line with its rules. If that happens and the damage is not repaired, the association can make a claim on the bond. The surety pays valid claims up to the bond amount and then recovers that money from the principal, so the bond guarantees the work. It is not insurance for the contractor.

Who posts it

The principal is whoever the association requires to post the bond. That may be the homeowner undertaking the project or the builder or contractor doing the work. The bond is issued in the principal's name exactly as it appears on the association's application or approval.

Where to find the requirement

Texas Property Code 202.006 requires a property owners' association to file its dedicatory instruments in the real property records of the county where the property is located, and an instrument has no effect until it is filed. Texas Property Code 207.006 requires an association of a subdivision with at least 60 lots, or one that has contracted with a management company, to make the current version of its recorded dedicatory instruments available on a website available to members. Ask the association which recorded document and section sets the bond requirement, the amount, and whether it has its own bond form.

Before the bond is issued

Confirm with the association or its management company the current bond amount, the required form and wording, how long the bond must stay in force, and how it is released when the work is accepted.

Eligibility and Requirements for a Texas Right of Way Bond:

Compliance with the association's recorded deed restrictions and architectural or construction rules.
Any project approval the association's rules require before work begins.
Bond amount and form as set by the association.
Repair of any damage to association streets, common areas or improvements caused by the work.
Underwriting review of the principal. Credit and the bond amount shape the premium.

Texas Right of Way Bond FAQs:

Who sets the amount of this bond?

The Orchard Lakes Estates Homeowners Association. It is a requirement of the association, not a city or state license bond, so the amount comes from the association. Confirm it in writing before the bond is issued.

Who has to post the bond, the homeowner or the contractor?

Whoever the association names in its requirement. It may be the homeowner doing the project or the builder or contractor performing the work. Ask the association which party it expects as principal.

Does a city or county permit replace the association's bond?

No. Work in a public street or easement may need a permit and bond from the government body that controls it. The association's bond protects the association and is a separate requirement.

Where can I read the rule that requires this bond?

Under Texas Property Code 202.006, an association's dedicatory instruments must be filed in the county real property records and have no effect until filed. Under 207.006, associations with at least 60 lots, or with a management company, must make them available on a website open to members. Ask the association to point you to the section.

What happens if someone makes a claim on the bond?

The surety investigates, pays a valid claim up to the bond amount, and the principal must repay the surety. The bond guarantees performance to the association. It does not insure the principal.