Before granting final approval of subdivision plats or site plans, the Planning Board or Zoning Board of Adjustment may require, for the purpose of assuring the installation and maintenance of on-tract improvements:
A. 
The furnishing of a performance guaranty in favor of the municipality in an amount not to exceed 120% of the cost of installation for improvements it may deem necessary or appropriate, including: streets, grading, pavement, water mains, stormwater drains, sanitary sewers, catch basins, dry wells, cleanouts, gutters, curbs, sidewalks, streetlighting, shade trees and landscaping, surveyor's monuments and fire hydrants, as shown on the final map and required by the Map Filing Law, N.J.S.A. 46:26B-1 et seq., water mains, culverts, storm sewers, sanitary sewers or other means of sewage disposal, drainage structures, erosion control and sedimentation control devices and public improvements of open space. Performance guaranties required by this chapter shall run for the period specified by the Planning Board or Zoning Board of Adjustment, but in no case for a term of more than three years.
B. 
Provision for a maintenance guaranty to be posted with the Municipal Council for a period not to exceed two years after final acceptance of the improvement, in an amount not to exceed 15% of the cost of the improvement. In the event that other governmental agencies or public utilities automatically will own the utilities to be installed or the improvements are covered by a performance or maintenance guaranty to another governmental agency, no performance or maintenance guaranty, as the case may be, shall be required by the municipality for such utilities or improvements.
The amount of any performance guaranty may be reduced by the Municipal Council, by resolution, when portions of the improvements have been certified by the Municipal Engineer to have been completed. The time allowed for installation of the improvements for which the performance guaranty has been provided may be extended by said body by resolution.
If the required improvements are not completed or corrected in accordance with the performance guaranty, the obligor and surety, if any, shall be liable thereon to the municipality for the reasonable cost of the improvements not completed or corrected and the municipality may, either prior to or after the receipt of the proceeds thereof, complete such improvements.
When all of the required improvements have been completed, the obligor shall notify the Municipal Council, in writing, by certified mail, addressed in care of the Municipal Clerk, of the completion of said improvements and shall send a copy thereof to the Municipal Engineer. Thereupon the Municipal Engineer shall inspect all of the improvements and shall file a detailed report, in writing, with the Municipal Council, indicating either approval, partial approval or rejection of the improvements with a statement of reasons for any rejection. If partial approval is indicated, the cost of the improvements rejected shall be set forth.
The Municipal Council shall either approve, partially approve or reject the improvements on the basis of the report of the Municipal Engineer and shall notify the obligor, in writing, by certified mail, of the contents of said report and the action of said Municipal Council with relation thereto not later than 65 days after receipt of the notice from the obligor of the completion of the improvements. Where partial approval is granted, the obligor shall be released from all liability pursuant to its performance guaranty, except for that portion adequately sufficient to secure provision of the improvements not yet approved. Failure of the Municipal Council to send or provide such notification to the obligor within 65 days shall be deemed to constitute approval of the improvements, and the obligor and surety, if any, shall be released from all liability pursuant to such performance guaranty.
If any portion of the required improvements are rejected, the Municipal Council may require the obligor or surety, if any, to complete such improvements, and upon completion the same procedure of notification as set forth this article shall be followed.
The obligor shall reimburse the municipality for all reasonable inspection fees paid to the Municipal Engineer for the aforegoing inspection of the improvements.
Any guaranties required pursuant to this article shall be in addition to any other fees required by ordinance.