[HISTORY: Adopted by the Board of Trustees of the Village of Montgomery 3-2-1987 by L.L. No. 1-1987. Amendments noted where applicable.]
The Board of Trustees of the Village of Montgomery hereby finds and determines that the existing system of performance and maintenance bonds provided to the municipality as an alternative to the prior completion of public improvements in a subdivision is deficient in providing for and protecting the public health, safety and welfare. Inflation, inadequate estimates, incomplete and/or inadequate description of improvements in bonds, unmeritorious defenses to enforcement of bonds and the high cost of enforcing performance and maintenance bonds have resulted in failure to properly complete public improvements, hardship to purchasers of lots in the subdivisions and to the general public, and unjust enrichment of owners, subdividers and developers of subdivisions.
It is the intent of this chapter to provide clarity and definition to the established method of guaranteeing the proper completion of public improvements in subdivisions, to nullify the imposition of unmeritorious defenses and to eliminate the costs of enforcement of performance and maintenance bonds so as to protect purchasers of lots in subdivisions and the general public and to advance the intent of the Village Law that public improvements in subdivisions shall be completed at the expense of the owner, subdivider or developer.
As used in this chapter, the following terms shall have the meanings indicated:
- A declaration by the Board of Trustees at any time subsequent to the expiration of the term of a performance or maintenance bond that the development of the subdivision has advanced to a stage where the public improvements shall be completed forthwith.
- FULL COST
- The full cost of completing public improvements shall include, without limitation, the cost of preparation and review of plans, reports, specifications and documents, the cost of enforcement of performance or maintenance bonds and/or the obligation of owners to complete the public improvements and the cost of municipal compliance with prevailing wage and bidding requirements.
- MAINTENANCE BOND
- A bond, collateral to the principal obligation of the owner, to secure or guarantee the proper maintenance of public improvements in a subdivision, which bond remains in full force and effect for a period of time after completion of said improvements, or the bond is released by resolution of the Board of Trustees with the concurrence of the Planning Board.
- The person or entity which undertakes to subdivide land and whose responsibility it is to properly complete public improvements in subdivisions. The term "owner" shall include the terms "principal," "subdivider" and "developer," and the term "coprincipal" as used in a performance or maintenance bond.
- PERFORMANCE BOND
- A bond, collateral to the principal obligation of the owner, to secure or guarantee the proper completion of public improvements in a subdivision, which bond remains in full force and effect until all public improvements are complete, the subdivision is abandoned without the sale of lots or the bond is released by resolution of the Board of Trustees with the concurrence of the Planning Board.
- PUBLIC IMPROVEMENTS
- Those improvements which are to be used in common by residents of the subdivision or by the public, whether or not such improvements are offered for dedication. "Public improvements" shall include, without limitation, improvements referenced in the Village Law, improvements depicted or referenced on the plat, improvements required by law, code, ordinance, rule or regulation and improvements agreed to by the owner.
- The term of a performance or maintenance bond is the period during which the municipality may not declare a default.
Prior to the final approval of any subdivision plat, the owner shall either complete all public improvements or post a performance bond in an amount sufficient to cover the full cost of completing the public improvements which are not completed. No building permits shall be issued in a subdivision prior to final approval of the subdivision plat.
Prior to the acceptance of any public improvement, the owner shall post a maintenance bond in an amount sufficient to cover the cost of maintaining, repairing or replacing public improvements which are improperly installed, defective in design, or otherwise unsuitable for the purposes intended.
All performance and maintenance bonds posted subsequent to the effective date of this chapter shall be in a standard form, approved by the Board of Trustees. The Board of Trustees, with the advice of the attorney, shall from time to time adopt by resolution standard form bonds of the following types:
No performance or maintenance bond nor any increase or reduction thereof shall be deemed approved until the following are entered into the minutes of the Board of Trustees:
Approval by the Planning Board of the bond amount or the increase or reduction of such amount.
Approval by the attorney of the form, sufficiency and execution of the bond or the increase or reduction thereof.
Approval by the Board of Trustees of the security or surety. The Board of Trustees may, in particular cases, require a particular form of bond.
Certification by the owner's engineer that the amount of the bond would be sufficient to fully compensate the municipality for the cost of constructing all required improvements, including the cost of competitive bidding and compliance with public works' laws.
A certificate by the surety of its experience in guaranteeing projects of this type. Information required to validate this certification shall include:
The number of claims and amounts paid prior to settlement.
The number of claims paid upon demand of the municipality prior to litigation.
The number of claims paid after litigation.
The number of subdivisions completed by surety after efault of the contractor.
References from other municipalities.
Estimates of performance and maintenance bond amounts shall be based upon the full cost of properly completing the public improvements. Allowance shall be made for the cost of compliance with bidding and public works' laws and for the expense of enforcement of the bond. Underestimation of the bond amount shall not estop the Village of Montgomery in an action against the owner on the obligation to complete the improvements.
Whenever warranted by changed circumstances and upon approval of the Board of Trustees, the Planning Board may, upon due notice and public hearing, modify the requirements for public improvements or increase or reduce the amount of the performance or maintenance bond.
Whenever the amount of a performance or maintenance bond is increased and the owner fails within a reasonable time thereafter, as determined by the Board of Trustees, to post such increased amount, the Board of Trustees may declare a default, whether or not the term of any existing bond has expired.
No decrease or reduction in the amount or quality of public improvements in a subdivision shall be effective until an amendment to the plat is duly recorded in the county clerk's office.
The public improvements in a subdivision shall not be deemed complete unless the Municipal Engineer certifies that all the public improvements are complete and said certification has been accepted by resolution of the Board of Trustees; nor shall any portion of such public improvements be deemed complete unless the municipal engineer certifies that particularly specified improvements are complete and said certification has been accepted by resolution of the Board of Trustees. A certification by the Municipal Engineer which is incorrect shall be void.
The Municipal Engineer shall issue the certification required by Subsection A above upon written demand by the owner or his authorized agent if in fact the public improvements are properly completed. If the Municipal Engineer refuses or neglects to issue such certification within 30 days, the owner may submit the certification of a competent engineer, licensed in New York, certifying to the Village of Montgomery either that all or a specified portion of the public improvements are properly complete. Such certification shall bear the seal of the engineer.
The public improvements in a subdivision shall not be deemed complete unless acceptance of the certification of such completion or partial completion as required by this section is made by resolution of the Board of Trustees, and said acceptance shall not be effective unless said resolution is recorded in the minutes of the Board of Trustees.
The right of the surety to perform the obligation of the owner shall be deemed waived if the surety either fails to assert such right by written instrument received by the Board of Trustees within 30 days of transmittal of notice of default or, following such assertion, fails to make satisfactory arrangements approved by resolution of the Board of Trustees within 60 days of transmittal of notice of default. Upon waiver by the surety of the right to perform the obligation, the performance or maintenance bond shall be deemed an instrument for the payment of money only as referenced in CPLR § 3213.
If the full cost of completion of the public improvements by the Village of Montgomery is less than the face or penal amount of the surety bond which shall be paid over to the Village of Montgomery, the moneys not expended shall be returned to the surety.
The obligation of the owner to complete all the public improvements is not limited by the posting of a performance and maintenance bond, and such obligation may be enforced independently of the obligation on the performance and maintenance bond.
The absence from the minutes of the Board of Trustees wherein the certification of completion required above is to be entered shall be prima facie evidence that the public improvements are not complete.
This chapter shall be applicable to all subdivisions hereafter approved and to all subdivisions which have been heretofore approved but in which public improvements have not been completed pursuant to the terms of this chapter, except that provisions of this chapter which are determined to be inconsistent with Village Law § 7-730 shall be applicable to subdivisions heretofore approved three years after the effective date of this chapter.
The duties of the Village of Montgomery, its officers, agents and employees pursuant to this chapter are general duties of the Village of Montgomery to protect the public health, safety and welfare. No person is authorized to create or imply a special relationship pursuant to this chapter.
This chapter shall be interpreted so as to most fully implement the intent that public improvements in a subdivision be properly completed at the owner's expense. If any provision, sentence, word or phrase of this chapter is judicially determined to be invalid, illegal or unconstitutional, such invalidity, illegality or unconstitutionality shall be confined to the particular part which is so determined and shall be confined to the particular part which is so determined and shall not affect the validity of the remainder of this chapter, which shall be interpreted so as to most fully implement the intent of this chapter.
No action or proceeding to challenge the consistency, validity, legality or constitutionality of any part of this chapter shall be commenced or prosecuted unless the Zoning Board of Appeals of the Village of Montgomery has rendered an interpretation of such part of this chapter.