These are Performance and Payment Bonds. These bonds typically go hand in hand together. The performance bond guarantees the Principal, typically a contractor, performs to the contract. The payment bond, also known as a labor and material bond, guarantees all labor and material bills will be paid by the Principal.
Subdivision Bonds also fall under the contract bond category, but differ from the standard performance and payment bonds. Subdivision Bonds are required of developers and property owners who seek to build on their property by the local city or county. The bonds guarantee the developer or property owner will put in the public improvements, like roads, sidewalks, curbs, water lines, sewer and/or landscaping improvements in return for the permit to build their requested improvements. These bonds are also known as Site Improvement Bonds or Subdivision Improvement Bonds.