Understanding the Financial Guarantee (Bond) Process




Financial guarantees for completion of subdivisions and plans of development (POD) are accepted by Henrico County to ensure the proper construction of all required improvements shown on the approved plans. Guarantees for subdivisions can be posted so the subdivision plats can be recorded prior to the installation of the required improvements. This allows a developer to sell lots and/or construct houses sooner than if they had to wait until all improvements were constructed. For POD’s a guaranty can be posted to ensure the construction of minor improvements not completed at the time a certificate of occupancy is requested. These improvements can only be items that do not affect the safe use of the premises. They are frequently items that cannot be completed due to weather conditions or time of year. Both types of guarantees protect the public interest while providing the developer a measure of flexibility in the project.




Legal authority for requiring financial guarantees is provided in both the Code of Virginia and the County Code. Subdivision guarantees are specifically provided for in Section 15.2-2241.5 of the Code of Virginia and Section 19-93 of the County Code. The authority to require POD guarantees is contained in Section 15.2-2286 of the Code of Virginia. This section empowers the zoning administrator to require guarantees for required improvements in the general enforcement of the zoning regulations. The County Code grants this same authority with regard to POD’s in Sections 24-106(I) and (n).




  1. After final approval is granted for a subdivision, the subdivider submits copies of the construction plans to the Planning Department and the Department of Public Works. Utility plans are submitted to the Department of Public Utilities. The Departments of Public Works and Public Utilities will submit to the Planning Department an estimate of the cost of building the required improvements.
  2. Once these figures are received by the Planning Department, a letter is sent to the owner of record or developer and copied to the engineer estimating the cost of improvements that are required.
  3. A subdivision guaranty can be posted by submitting a letter of credit, surety, certified check or cashier’s check. (Personal or company checks are not accepted.) A letter of credit or surety must follow a standard format, which is available upon request. The format for a letter of credit or surety must be strictly adhered to in order to get approval.
  4. Once the guaranty is posted, follow-up inspections are made every six months. The County sends the purchaser a status letter showing work completed.
  5. Sixty days prior to the expiration date of a letter of credit, the County submits a notification letter that alerts the developer, engineer, and the financial institution of the upcoming expiration date of the guaranty. Unless all improvements are completed by that date, or an extension to the letter of credit is received, the County will present a draw letter to the financial institution requesting a payment for the remaining improvements.
  6. Once all improvements have been completed and the engineer submits a letter of substantial conformity, as required in Section 19-76 of the County Code, the cancelled letter of credit is returned to the financial institution.




  1. A guaranty is accepted on a Plan of Development (POD) in situations where the required improvements have not been completed. This can occur where, due to weather conditions or the time of year, the required improvements cannot be completed prior to receiving a certificate of occupancy. Construction delays may also make completion of all improvements impossible before a planned opening date. The only acceptable forms of POD guarantees are letter of credit, certified check or cashier’s check.
  2. When necessary, the zoning enforcement officer assigned to inspect a POD will determine the guaranty amount, based on the cost of installation of the uncompleted items as shown on the approved plans.
  3. The Planning Department requires a letter of credit to follow a standard format, which is available upon request. (see below)
  4. Once all improvements are completed, the Planning Department will refund the amount that was posted or return the letter of credit to the financial institution, which ever is applicable.



(most files are in MS Word format)




   Letter of credit (PREFERRED) sd-loc.docx sd-loc.pdf
   Surety bond sd-surety.docx sd-surety.pdf
   Assignment of CD sd-cda.docx sd-cda.pdf
   Letter of credit (PREFERRED) pod-loc.docx pod-loc.pdf
   Surety bond pod-surety.docx pod-surety.pdf
   Assignment of CD pod-cda.docx pod-cda.pdf
   Letter of credit (PREFERRED) defect-loc.docx defect-loc.pdf
   Surety bond defect-surety.docx defect-surety.pdf
   Assignment of CD defect-cda.docx defect-cda.pdf
   Letter of credit (PREFERRED) extloc.pdf
   Surety bond extsurety.pdf
   Assignment of CD extcdassign.pdf



Contact Us


Physical Address
4301 East Parham Road
Henrico, VA 23228

(804) 501-4602

(804) 501-4379


Mailing Address
P. O. Box 90775
Henrico, VA 23273-0775

Additional Contact Info