Markham Bylaw: Performance Bonds for Franchise Contractors
Markham, Ontario contractors entering franchise contracts should understand when a municipality or the city requires a performance bond or similar security and how to deliver acceptable instruments. This guide explains typical municipal rules, who enforces them, how bonds are accepted, and practical steps to comply with Markham procedures for development, building and procurement matters.
Overview
Municipal performance bonds (also called securities, letters of credit, or surety bonds) are commonly used to guarantee completion of municipal works, site remediation, or compliance with agreement terms. For franchise-related construction, site works or service agreements that touch city property or municipal approvals, a bond may be required as part of a permit, site-plan, subdivision or municipal contract.
When a Bond Is Likely Required
- Site plan or subdivision agreements where the city requires securities to guarantee public works and landscaping.
- Building permits or occupancy conditions that link completion of works to release of a permit.
- Municipal procurement or service contracts where performance security is standard for major construction or supply contracts.
Types of Acceptable Security
- Irrevocable letter of credit from a Canadian bank or financial institution.
- Surety bond issued by an authorized surety company.
- Cash deposit or certified cheque where the municipality specifically permits it.
Penalties & Enforcement
Enforcement depends on the controlling instrument (procurement by-law, site plan agreement, building permit or contract). The City of Markham enforces municipal agreements and by-law compliance through its legislative and enforcement offices. Exact monetary fines, escalation amounts, and continuing offence fees are often set in the controlling by-law, procurement documents, or the agreement; if those figures are not published on the controlling page they are "not specified on the cited page" and require reference to the specific contract or by-law for amounts.[1][2]
- Fines and fees: not specified on the cited page; consult the relevant agreement or by-law for exact figures.[1]
- Escalation: first, repeat or continuing offence regime is set in the controlling instrument or by-law and is not specified on the cited page.[1]
- Non-monetary sanctions: the city may issue compliance orders, demand remediation, draw on the security, or pursue court action.
- Enforcer and complaints: By-law Enforcement or the applicable municipal department enforces obligations; complaints and inspection requests go through official city pages.[3]
- Appeals and review: appeal routes (e.g., administrative review, tribunal or court) depend on the instrument; time limits are set in the by-law or contract and are not specified on the cited page.
- Defences and discretion: common defences include proof of compliance, reasonable excuse, or having an approved variance or release; municipalities exercise discretion per the controlling agreement.
Applications & Forms
The specific form or submission method depends on the requirement: procurement security language appears in bid documents and procurement by-laws, while development or building securities are documented in agreements or permit conditions. Where a form or template exists it is published with the controlling instrument; if no template is published on the city page, then a specific form is "not specified on the cited page" and you must request the template from the administering department.[1][2]
How to Prepare and Deliver a Performance Bond
- Review the controlling agreement or procurement documents to confirm required amount, instrument type, naming and expiry terms.
- Contact the municipal department (Planning, Building or Procurement) listed on the agreement for submission instructions and acceptable formats.[2]
- Obtain the bond or letter of credit from a bank or surety that is acceptable to the city and that meets the wording required by the agreement.
- Deliver the original instrument to the city office and retain certified copies; track expiry and renewal obligations.
FAQ
- Do franchise contracts automatically require a performance bond in Markham?
- No. A performance bond is required only when the franchise contract affects municipal property, triggers a permit, or is governed by a city procurement or development agreement; check the specific city instrument or contract.[1]
- Who decides acceptable bond types and wording?
- The administering municipal department named in the agreement (Planning, Building, Procurement) sets acceptable types and wording; contact them for templates or examples.[2]
- What happens if the contractor fails to complete required works?
- The city may draw on the security, issue orders to remedy, levy fines if authorized by the by-law, or seek enforcement through the courts; monetary amounts must be confirmed in the controlling instrument.[1]
How-To
- Identify the controlling document (agreement, permit or procurement doc) and note bond amount and wording requirements.
- Ask the administering municipal department for any templates or submission instructions.[2]
- Secure the instrument from a bank or licensed surety that meets the municipality's conditions.
- Deliver originals to the city, keep records, and calendar renewals or expiry dates.
Key Takeaways
- Performance bonds are instrument-specific and required only when the city or agreement demands them.
- Always confirm acceptable bond types and wording with the administering municipal department.
- Keep originals and monitor expiry to avoid enforcement and draws on the security.
Help and Support / Resources
- City of Markham - Building Permits & Inspections
- City of Markham - Procurement Policy and Purchasing
- City of Markham - By-law Enforcement
- City of Markham - Business Licences
