District of Columbia Condominium Act Warranty Bond
The District of Columbia Condominium Act Warranty Bond is a mandatory financial security required under the Condominium Act of 1976, codified at D.C. Official Code §42–1903.16. This bond serves as a guarantee that a condominium developer will fulfill the statutory obligation to repair structural defects for a period of two years following the sale of the last residential unit in the development. It provides critical protection for condominium purchasers by ensuring access to funds for repairs if the developer fails to remedy structural deficiencies.
Every developer seeking to register and sell newly constructed or converted condominiums within Washington, D.C., must file this warranty security with the District of Columbia’s Department of Housing and Community Development (DHCD) prior to conveying the first unit. This obligation applies to both newly built condominiums and those created through the conversion of existing buildings. The required bond amount must be equal to ten percent (10%) of the total construction costs associated with the development. Developers may post this security in the form of a surety bond, irrevocable letter of credit (LOC), or cash. The DHCD retains the discretion to approve the form and sufficiency of the warranty security.
The statutory warranty under the Condominium Act is distinct from any limited warranty offered by the developer. While a private limited warranty may contain exclusions or limitations, the statutory bond guarantees performance of the developer’s legal obligation to repair latent structural defects. According to the law, structural defects must be remedied at no cost to the homeowner during the two-year post-sale period. If the developer fails to honor this obligation, the District of Columbia may make a claim against the bond and recover funds necessary to complete the repairs.
The legal foundation for the Condominium Act Warranty Bond is found not only in D.C. Code § 42–1903.16, but also in the Rental Housing Conversion and Sale Act of 1980 (D.C. Law 3-86) and related regulations promulgated in Title 14, Chapter 4700 of the District of Columbia Municipal Regulations (14 DCMR §4700 et seq.). Collectively, these laws ensure that purchasers of new condominium units in Washington, D.C. are protected from construction-related defects through a mandatory warranty system backed by secured funds.
The warrant bond is executed jointly by the developer (Principal) and a surety company licensed to conduct business in the District. It is made payable to the Mayor of the District of Columbia, or his designee, as Obligee. The bond becomes enforceable if the developer defaults on its statutory obligations. If such default occurs, the District may demand payment or reimbursement from the surety, which must respond within thirty (30) days. No individual homeowner or condominium association has a direct right to bring action against the bond; it exists solely for the benefit and enforcement authority of the District of Columbia government. The obligee for the Condominium Act Warranty Bond for submissions is:
Department of Housing and Community Development (DHCD) Rental Conversion and Sale Division 1800 Martin Luther King, Jr. Avenue, SE Washington, DC 20020 Telephone: (202) 442-7200 Email: dhcd.casd@dc.gov Website: dhcd.dc.gov
Compliance with this bond requirement is an essential step in the registration and sale process of new condominium units. Developers must also determine whether additional fees—such as the five percent (5%) conversion fee applicable to newly converted units—apply to their project. These fees, also collected by the DHCD, must be remitted at closing by the settlement agent.
Developers are strongly advised to work with a licensed and experienced surety provider when obtaining a D.C. Condominium Act Warranty Bond. Surety One, Inc., a national leader in statutory compliance bonds, provides fast, compliant, and competitively priced surety solutions tailored for real estate developers operating in the District. Our experts can help you calculate the correct bond amount, ensure timely filing with DHCD, and remain compliant throughout the warranty period.
District of Columbia surety bond leader, Surety One, Inc. is a specialist in providing for the bonding needs of electrical contractors and designated masters. We offer this class of surety bond and performance bonds to all applicants in EVERY state where developers and COAs must be bonded. Call (800) 373-2804, email Underwriting@SuretyOne.com or click here for a live chat regarding a DC Condo Act warranty bond application or to discuss your particular surety needs.
Surety bond application review and quoting are free of charge. There is no obligation to purchase.
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Obligee's Bond Form
