The California Department of Real Estate RE 643 series guarantees that a subdivider keeps funding the community association during build-out and sell-out, before owner assessments alone can carry the association budget. The right form depends on which promise the subdivider is securing.
While a new community is still selling, the developer often agrees to cover part of the association budget so the owners who have already moved in are not left short. The 643 series is how the developer backs that promise. Each bond secures the developer's performance under a matching security agreement with the association. State regulations let a subdivider either wait until roughly 80 percent of the interests are sold or post one of these securities until then.
This bond guarantees the subdivider will pay the regular and special assessments on the interests it has not yet sold, keeping the association operating and maintenance fund solvent during sell-out. It is issued under California regulation 10 CCR section 2792.9. That regulation sets the security at, ordinarily, six months of regular assessments for the covered interests, running until 80 percent of them are conveyed. That is a basis for the amount, not a fixed price.
This bond secures a developer's subsidization commitments to the association, such as providing goods or services or paying part of a buyer's share of the association obligations. It is issued under 10 CCR section 2792.10, titled "Subsidization by Subdivider."
This is the time-share counterpart. It secures the developer's performance under Part One of the Time-Share Assessment/Subsidy Security Agreement, with the time-share owners association as the obligee. It references Business and Professions Code section 11241 under the Vacation Ownership and Time-Share Act.
The RE 643P secures the standalone Subsidy Security Agreement for a time-share plan, under 10 CCR section 2812.4. The difference from the 643N is scope: the 643N covers the combined assessment and subsidy agreement, while the 643P covers the subsidy agreement on its own.
Subdividers and developers of homeowner associations and time-share plans use these bonds to satisfy Department of Real Estate conditions tied to the public report while a community is still being built and sold.
Complete our secure application and sign electronically. Tell us which agreement you are securing and we will match your file to A-rated surety carriers that write California developer bonds.
This page is a general summary and not legal advice. Bond requirements, forms, and amounts are set by the California Department of Real Estate and the obligee. Refer to the official DRE bond form and instructions for your project.