Grading Permit Bonds Explained

A grading permit bond is often required by cities and counties when a home owner or builder applies for a permit to build. While it’s not a state or federal mandate, many cities opt for a bond to ensure the builder is in compliance. As anyone who has ever applied for a building permit knows, it can be a frustrating paperwork filled process. So it’s no surprise when a homeowner is told they need to provide a grading permit surety bond, they don’t know what to do or where to turn. Look no further.

What to do When you are Told you Need a Grading Permit Bond

1. Ask for the bond form. Large cities like the city of Los Angeles have their own bond forms. The bond form is what your surety agency uses to type up the bond. It’s ultimately the legal document (the surety bond itself) that is signed by both parties and handed into the city. If you don’t ask this key question, your surety agent may prepare on a generic form only to have th bond rejected by the city or county once handed in.
2. Contact a surety professional (not your insurance agent) for a 1 page application.
3. Be prepared to provide the completed application, a personal financial statement, the bond form, and the engineer’s estimate. The engineer’s estimate is how the city/county calculated the bond amount.

How to Qualify

A grading permit surety bond is based on a combination of credit and liquid assets. The bond company is confirming the property owner has enough cash to cover the cost of the grading work. The rates are usually about 1-1.5% annually. It’s important to note that a grading permit bond cannot be cancelled. The bond is in force until the grading is complete and the city or county sign off on the work to release the bond.

To apply for a grading permit bond, click here to start the quick application process or call our office at 877-654-2327.