We often receive phone calls from our clients, with a hesitant, questioning tone to their voice, advising that they’ve been instructed to gain “Consent of Surety”, for one need or another. But what is “Consent of Surety”?
Essentially, this is the Obligee “checking in” with the Surety who wrote a Performance Bond and/or Labor & Materials Payment Bond, before the Obligee takes an action that may affect the surety. For instance, the Obligee may want to close out a contract for construction and make the final payment and/or release Retainage to the Principal. In this instance, the Obligee wants Consent of Surety before that payment is released, in case the Surety has had complaints from Subs and/or Suppliers related to the contract.
Another example could be a Consent of Surety to Change Order. Since a Contract/Performance/Payment bond guarantees an entire contract no matter what the bond says, if a contract has had multiple changes, or a large change, the Obligee might want to check in with the Surety before formalizing the change order.
Integrity Surety is your bond department, and we’ve seen or heard of almost anything. Quite often the obligee will just ask for an AIA G707. We know what that means. Sometimes the Obligee will have their own form, and that’s OK too. We’ll get it handled. Just give us a call!