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Performance Guarantees Not All They Appear to Be By Mark A. Kablack Builder: The Lagasse Group. Congratulations on being chosen "Builder of the Month" LANDSCAPE SERVICES • SITE PREPARATION MASONRY • DRIVEWAY CONSTRUCTION SPECIALTY ITEMS be relatively standard. The most common requirements are contained within the Subdivision Control Law, M.G.L. c.41, 81U, which provides for the posting of one or more forms of guarantee to assure completion of roadways and municipal services shown on a subdivision plan. Under this law, a guarantee can take the form of a performance bond, a cash deposit, a covenant or a triparty lender agreement. Development is constrained until the permit-granting authority has reviewed and accepted the performance guarantee, and in the event there is failure to comply with development and construction standards covered by the guarantee, the permit-granting authority has the right to enforce the guarantee and complete such standards on its own. The complexities of performance guarantees often take shape T Need Photo 18 Eliot Ave., West Newton, MA 02465 www.leonelandscape.com 617.527.2288 62 | GREATER BOSTON Builder+Architect BOSTON.BUILDERARCHITECT.COM over the form of guarantee, deadlines for performance, requests for reduction and/or release of guarantee, and rights and/or obligations to call a guarantee to complete work when there is a default. Additional confusion occurs when, over time, there is a succession of builder or developer interest in completing a proj- ect. Under the current economic situation, succession can occur with some frequency due to mortgage default and foreclosure. The passage of time, transfer of ownership interest and likeli- hood of unfinished work under a permit approval, particularly within a foreclosure situation, will likely cause problems in the interpretation of performance guarantees. HE REQUIREMENTS FOR posting a performance guarantee with a permit-granting authority — in connection with land development and construction — appear, at first, to LAW MATTERS