Complete the sentence: A ______________ is a guarantee by a surety to protect the community association if the contractor fails to perform or finish the work.

Complete the sentence: A ______________ is a guarantee by a surety to protect the community association if the contractor fails to perform or finish the work.

• A. payment bond
• B. default
• C. performance bond
• D. waiver of lien

Answer: (C)

A performance bond is a guarantee by a surety that the contractor will complete the project according to the contract terms. If the contractor fails to perform or finish the work, the surety can step in to cover the costs to complete the project, hire another contractor, or remedy deficiencies, up to the bond amount. This specifically protects the community association from delays, non-performance, and incomplete work. In contrast, a payment bond guarantees payment to subcontractors and suppliers, not that the project will be completed. A default is the event of failing to perform, not a guarantee itself. A waiver of lien is a document giving up lien rights, not a performance guarantee.

A performance bond is a guarantee by a surety that the contractor will complete the project according to the contract terms. If the contractor fails to perform or finish the work, the surety can step in to cover the costs to complete the project, hire another contractor, or remedy deficiencies, up to the bond amount. This specifically protects the community association from delays, non-performance, and incomplete work.

In contrast, a payment bond guarantees payment to subcontractors and suppliers, not that the project will be completed. A default is the event of failing to perform, not a guarantee itself. A waiver of lien is a document giving up lien rights, not a performance guarantee.