What should you know about Condemnation Bonds?

QUICK GUIDE ON CONDEMNATION BONDS For owners of private property that have been condemned for public use, a Condemnation Bond assures the private property owner they will be paid whatever price that the court has determined.

A Condemnation Bond is a unique type of judicial surety bond that provides a guarantee that the owner of private property that has been condemned for public use will be paid whatever price that the court has determined. Because it also functions as an absolute financial guarantee, a Condemnation Bond mandates that the Principal (one who posted the bond and will perform under the contract) must pay the owner of the private property the price set by the court.

This bond provides a guarantee that the company will compensate the owner the amount set by the court after hearing all the evidence presented in the case.

Companies that want to take possession of the private property to avoid delay in the completion of their project must obtain a Condemnation Surety Bond.

This is considered an absolute financial guarantee because the Principal is mandated to pay the price set by the court regardless of the result of the litigation.

The cost of a bond premium for a Condemnation Bond varies from

state to state.

Applicants with a high credit score, or those with a FICO

more than 700, are usually granted a lower premium by sureties.

Those with poor credit scores will be charged a higher premium.

Underwriters are also expected to conduct a thorough background of the applicant to determine their financial standing.

Condemnation of property is the process where private property is appropriated for public use, particularly involving public infrastructure

projects. To be clear, there is a distinction between condemnation and eminent domain.

Condemnation

pertains

to

the

process

of

appropriating private property. Eminent domain is the

government’s

inherent

right

to

take

or

appropriate private property for public use. Eminent domain is a government’s authority.

Sometimes a private property gets in the way of an important public infrastructure project and could delay its early completion. However, certain statutory conditions allow contractors of public works to condemn property or land and convert it to public use against the owner’s wishes. Companies can do this under the principle of eminent domain in projects involving railroads, road widening or road construction, telecommunications, and other public utilities.

Companies that want to take possession of the private property to avoid delay in the completion of their project must obtain a Condemnation Surety Bond.

SOURCE: https://suretybondauthority.com/condemnation-bond/