HB771 • 2026

Land subdivision and development; mandatory provisions of a subdivision ordinance.

<p class=ldtitle>A BILL to amend and reenact §§ 15.2-2241 and 15.2-2245 of the Code of Virginia, relating to land subdivision and development; mandatory provisions of a subdivision ordinance; periodic partial and final release of certain performance guarantees.</p>

Enacted

This bill passed the Legislature and reached final enactment based on the latest official action.

Sponsor: Zehr
Last action: 2026-02-18
Official status: Failed
Effective date: Not listed

Plain English Breakdown

The candidate explanation included claims about automatic approval and legal action that were not supported by the official source material.

Land Subdivision Rules for Performance Guarantees

This bill modifies rules regarding performance guarantees in land subdivisions to adjust financial requirements and release processes.

What This Bill Does

Limits the amount of a certified check, cash escrow, bond, or letter of credit required by an owner or developer to cover public improvements within a subdivision based on construction costs plus five percent for administrative expenses, inflation, and potential damage to existing infrastructure.
Requires periodic partial releases of performance guarantees only after at least 15% of the required public facilities are completed, instead of the previous requirement of 30%. This allows developers more flexibility in managing funds.
Specifies that a certification from a professional engineer or land surveyor about completion of public facilities can be accepted without further inspection by the governing body.

Who It Names or Affects

Land developers and owners who must provide performance guarantees for public improvements within their subdivisions.
Local governments responsible for approving and releasing performance guarantees.

Terms To Know

Performance Guarantee: A financial assurance provided by a developer to ensure that certain improvements or construction work will be completed as agreed upon.
Subdivision Ordinance: Local laws and regulations governing the division of land into smaller lots for development purposes.

Limits and Unknowns

The bill does not specify an effective date, so it is unclear when these changes will take effect.
It remains to be seen how local governments will implement these new requirements in practice.

Bill History

2026-02-18 House
Left in Committee Counties, Cities and Towns
2026-01-29 Subcommittee #3
Subcommittee recommends laying on the table (5-Y 1-N)
2026-01-29 Subcommittee #3
House subcommittee offered
2026-01-28 Subcommittee #3
Assigned HCCT sub: Subcommittee #3
2026-01-13 House
Prefiled and ordered printed; Offered 01-14-2026 26103494D
2026-01-13 Counties, Cities and Towns
Referred to Committee on Counties, Cities and Towns

Official Summary Text

Land subdivision and development; mandatory provisions of a subdivision ordinance; periodic partial and final release of certain performance guarantees.
Provides that the amount of a certified check, cash escrow, bond, or letter of credit required to be furnished by an owner or developer to a governing body related to certain improvements dedicated for public use within any subdivision shall not exceed the total estimated cost of construction as determined by a duly licensed professional engineer or land surveyor and a reasonable allowance for estimated administrative costs, inflation, and potential damage to existing roads or utilities, which shall not exceed five percent of the estimated construction costs. Current law requires that such amount not exceed the total of the estimated cost of construction based on unit prices for new public or private sector construction in the locality and such reasonable allowance, which shall not exceed 10 percent of the estimated construction costs.

The bill also provides that periodic partial releases of certain performance guarantees granted to subdividers or developers may not occur before the completion of at least 15 percent of the public facilities covered by any bond, escrow, letter of credit, or other performance guarantee. Current law provides such partial release may not occur before the completion of at least 30 percent of such public facilities. The bill also requires that a certification of partial or final completion of such public facilities from a duly licensed professional engineer or land surveyor be accepted without requiring further inspection of such public facilities. Current law allows, but does not require, such certifications be accepted without further inspection.

Current Bill Text

Read the full stored bill text

HOUSE BILL NO. 771

AMENDMENT IN THE NATURE OF A SUBSTITUTE

(Proposed by the House Committee on Counties, Cities and Towns

on ________________)

(Patron Prior to Substitute--Delegate Zehr)

A BILL to amend and reenact §
15.2-2245
of the Code of Virginia, relating to land subdivision and development; periodic partial and final release of certain performance guarantees.

Be it enacted by the General Assembly of Virginia:

1. That §
15.2-2245
of the Code of Virginia is amended and reenacted as follows:

§
15.2-2245
. Provisions for periodic partial and final release of certain performance guarantees.

A. A subdivision ordinance shall provide for the periodic partial and final complete release of any bond, escrow, letter of credit, or other performance guarantee required by the governing body under this article within thirty days after receipt of written notice by the subdivider or developer of completion of part or all of any public facilities required to be constructed hereunder unless the designated agent notifies the subdivider or developer in writing of nonreceipt of approval by an applicable state agency, or of any specified defects or deficiencies in construction and suggested corrective measures prior to the expiration of the thirty-day period. Any inspection of such public facilities shall be based solely upon conformance with the terms and conditions of the performance agreement and the approved design plan and specifications for the facilities for which the performance guarantee is applicable, and shall not include the approval of any person other than an employee of the governing body, its administrative agency, the Virginia Department of Transportation or other political subdivision or a person who has contracted with the governing body, its administrative agency, the Virginia Department of Transportation or other political subdivision.

B. If no such action is taken by the designated agent within the time specified above, the request shall be deemed approved, and a partial release granted to the subdivider or developer. No final release shall be granted until
after expiration of such thirty-day period and
there is an additional request in writing sent by certified mail return receipt to the chief administrative officer of such governing body. The designated agent shall act within ten working days of receipt of the request; then if no action is taken the request shall be deemed approved and final release granted to the subdivider or developer.

C. After receipt of the written notices required above, if the governing body or administrative agency takes no action within the times specified above and the subdivider or developer files suit in the local circuit court to obtain partial or final release of a bond, escrow, letter of credit, or other performance guarantee, as the case may be, the circuit court, upon finding the governing body or its administrative agency was without good cause in failing to act, shall award such subdivider or developer his reasonable costs and attorneys' fees.

D. No designated agent shall refuse to make a periodic partial or final release of a bond, escrow, letter of credit, or other performance guarantee for any reason not directly related to the specified defects or deficiencies in construction of the public facilities covered by said bond, escrow, letter of credit or other performance guarantee.

E. Upon written request by the subdivider or developer, the designated agent shall be required to make periodic partial releases of such bond, escrow, letter of credit, or other performance guarantee in a cumulative amount equal to no less than ninety percent of the original amount for which the bond, escrow, letter of credit, or other performance guarantee was taken, and may make partial releases to such lower amounts as may be authorized by the designated agent based upon the percentage of public facilities completed and approved by the governing body, local administrative agency, or state agency having jurisdiction. Periodic partial releases may not occur before the completion of at least thirty percent of the public facilities covered by any bond, escrow, letter of credit, or other performance guarantee. The designated agent shall not be required to execute more than three periodic partial releases in any twelve-month period. Upon final completion and acceptance of the public facilities, the designated agent shall release any remaining bond, escrow, letter of credit, or other performance guarantee to the subdivider or developer. For the purpose of final release, the term "acceptance" means: when the public facility is accepted by and taken over for operation and maintenance by the state agency, local government department or agency, or other public authority which is responsible for maintaining and operating such public facility upon acceptance.

F. For the purposes of this section, a certificate of partial or final completion of such public facilities from either a duly licensed professional engineer or land surveyor, as defined in and limited to §
54.1-400
, or from a department or agency designated by the locality may be accepted without requiring further inspection of such public facilities.