Infrastructure and Subdivisions

Does the infrastructure have to be installed before lots can be sold in a subdivision?


Editor's Reply: The answer depends on your state law, but in almost all parts of the U.S., the answer is yes.

Assuring that infrastructure (streets, sidewalks, street lights, utilities, and so forth, as promised when the subdivision was approved) actually is provided is part of the reason that towns and cities adopt subdivision regulations in the first place.

The catch is that in most places, the law provides that if the developer doesn't want to provide every bit of infrastructure in advance of selling the first lot, they can post a bond with the city government. That bond essentially is an insurance policy, with the city as the beneficiary, stating that if the developer doesn't install all the infrastructure, the city can make a claim against the bond.

This bond is an item that the developer pays for. It's pretty rare that a developer actually spends the money up front to install infrastructure.

So you didn't say why you're asking, but if you have bought a lot and are disappointed that the "street" is just a muddy trail and your "sidewalk" is just some form boards where maybe concrete will be poured someday, ask your city government about the status.

If they say the developer posted a bond, or some other form of insurance that they will install the streets and whatever else they were required to install, ask the city how long the developer has to get the work done. The city will have a formal or informal time frame usually.

If you see that the developer is past due on infrastructure, but sense that a city official is reluctant to enforce the requirements, then you can and should take your complaints to the city council.

You have a strong basis for the complaint to the city, because the city allowed the subdivision to be approved and also authorized the arrangement for street construction in some fashion. So now you have a quarrel with the city, as well as the developer, if the work isn't getting done.

Sometimes, in fact often, the city's requirements are a little more lenient than the buyer of a lot would like.

So in that case, you just have to put up with the inconvenience. In theory, you should have checked into what the requirements were before you bought the lot. We know it's tough when you think you've found the right piece of land.

But if a developer or the city isn't living up to the letter of the law, complain loudly and frequently. It's your car that's getting muddy and your visitors who are inconvenienced, right?

Sometimes governments are too sympathetic to the developer if he or she indicates financial problems or poor sales. Your job is to be deliberate in protecting the rights of current and future home buyers.

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