Surety Bond Encyclopedia

Grading Bond - Irvine, CA in California

Brief Summary

Irvine will not issue a grading permit until this bond is on file, and the amount is not a flat figure. Building and Safety calculates it from your own engineering cost estimate at the second plan check submittal. A surety bond lets you post that number for an annual premium instead of tying up cash or a letter of credit until the City signs off on the work.

Under Irvine Municipal Code Section 5-10-129, a grading permit is not issued until the permittee posts security with the Chief Building Official. Per the City Grading Manual, the amount is 25% of the cost of the cut or fill volume, whichever is greater, plus 100% of the cost of drainage and erosion control work and 100% of any improvements in the public right of way. The bond runs in favor of the City of Irvine on the City's own Grading Surety Bond form.

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How to Apply for a Grading Bond:

Submit the grading permit application and plans to Irvine Building and Safety with an itemized engineering cost estimate.
Receive the bond amount from the City at the second plan check submittal.
Give the surety the permit number, property description, owner name and estimated cost of work.
Have the bond executed on the City of Irvine Grading Surety Bond form, Form 41-14B, with notarized signatures for principal and surety.
Post the bond with the Chief Building Official along with inspection fees before the permit is issued.
Request a reduction or release from the City as grading work is completed and approved.

Detailed Information About the California Grading Bond:

How the amount is set

There is no fixed bond amount in Irvine. Section 6.6 of the City Grading Manual builds it from three pieces of your project cost estimate:

25% of the cost of the cut or fill volume, whichever is greater
100% of the cost of the drainage improvements and erosion control facilities built under the permit
100% of the cost of improvements proposed within public rights of way

The Chief Building Official can lower that figure when the hazards or nature of the project do not justify the full amount, or raise it up to 100% of the total cut and fill cost when they do. The City's grading page says the amount is determined at the time of second submittal.

What the bond guarantees

Irvine Municipal Code 5-10-129 requires a bond executed by the owner and a corporate surety authorized in California, sufficient to cover drainage and protective devices, corrective work to remove engineering and geological hazards, and conditions that threaten adjacent property or water quality. On the City form, Form 41-14B, the principal promises to follow the Grading Code and the permit conditions, finish the work within the permit time limit, and reimburse the City for any work it has to do because of the principal's failure.

If the permittee defaults, the City gives written notice to the permittee and the surety with the work required, the estimated cost and a deadline. The surety must then get the work done or pay the City that estimated cost.

Waivers, blanket bonds and reductions

The Chief Building Official may waive security altogether where no hazard, drainage, erosion, geological or adjacent property problem is likely and no permit condition calls for a financial guarantee. A builder running several grading projects on one development may be allowed a single blanket bond. A separate completion bond can be required for finish grading before occupancy and energizing utilities, and for temporary earthen stockpiles.

The bond stays in force from permit issuance until the work is completed and released by the City. The City form lets the principal request a reduction in 25% steps as each quarter of the grading is completed and approved.

Other forms of security

Code 5-10-129 also accepts a cash bond, or with City approval a letter of credit or certificate of deposit. Any bond format other than the City's standard form needs City Attorney approval.

Eligibility and Requirements for a California Grading Bond:

Surety must be a corporation authorized to transact surety business in California.
City of Irvine named as obligee.
Bond executed by the property owner as principal, per Municipal Code 5-10-129.
Bond amount matching the figure calculated by the Chief Building Official.
Underwriting review of the owner or developer's credit and financial statements, sized to the bond amount.

California Grading Bond FAQs:

How much is the Irvine grading bond?

It depends on your project. The Grading Manual sets it at 25% of the cost of the greater of cut or fill volume, plus 100% of drainage and erosion control costs and 100% of public right of way improvements. The Chief Building Official can adjust it up or down based on the risk.

Can the bond requirement be waived?

Yes, at the discretion of the Chief Building Official, when incomplete or improper grading would not create a hazard, harm adjacent property, cause drainage or erosion problems, or have geological or environmental impacts, and no permit condition warrants a financial guarantee.

Can I reduce the bond as the work progresses?

Yes. The City form allows a written request for a 25% reduction each time another 25% of the grading is completed and approved by Building and Safety. The reduced bond replaces the original.

Who signs the bond?

Municipal Code 5-10-129 calls for a bond executed by the owners and a corporate surety authorized to do business in California, on a form prescribed by the Chief Building Official and approved by the City Attorney.

What does the premium cost?

The surety sets the premium from the bond amount and the principal's credit, finances and experience. Because the amount is project specific, get your City calculated figure first and then request a quote.