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City or county building, engineering or development services department

California Grading Bond

A grading bond protects the city, not the person who buys it. If permitted earthwork stops halfway and leaves an open slope, missing drainage or a hazard the agency has to fix, the bond pays for that work. The property owner files it, and Los Angeles requires one before a permit issues on hillside cut or fill of 250 cubic yards or more.

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Key facts
Bond amount
Set by the agency from the engineer's estimate
Authority
City or county building, engineering or development services department
Statute
LAMC §91.7006.5 (Los Angeles)

The premium is a percentage of the bond amount, set by underwriting. The figures above are the bond amounts, not what you pay.

Illustration for the California Grading Bond

What it is

A grading permit bond is filed by the owner of the property with the permitting agency and runs for the benefit of that city or county. It guarantees the permitted earthwork is completed to the agency's standard, and the amount is set to cover what the agency would otherwise pay for itself: the construction of drainage and protective devices, and any corrective work needed to remove and eliminate engineering and geological hazards. That is the real exposure being bonded. Grading moves dirt and water, and a job abandoned mid-slope can put both onto public streets, storm drains and neighboring lots. If the surety pays a claim, the owner reimburses it in full.

Two different bonds are called a "grading bond"

This page is the permit bond: the property owner posts it, the city or county is the one protected, and it is a condition of the grading permit. The other one is a contract bond: a grading contractor posts a performance bond to the project owner or general contractor, guaranteeing the grading contract itself. Same two words, different principal, different obligee, different trigger. If a city is asking, you are in the right place. If a customer or a general contractor is asking, start with the contract bonds.

Who needs it

  • Property owners pulling a hillside grading permit (in the City of Los Angeles, 250 cubic yards or more of cut or fill)
  • Homeowners whose remodel, pool, driveway or retaining wall triggers a grading permit
  • Developers and builders bonding site work as a condition of the permit
  • Contractors posting on the owner's behalf where the agency allows it
  • Grading contractors bonding a grading contract: that is the contract bond, not this one

Bond amounts and requirements are general guidance and can change. Confirm the current requirement with the listed agency before you file. We will quote your exact bond.

Tough credit or a prior claim? It's welcome here. See how we place hard-to-place surety bonds, or get a quote and we'll place your exact bond.

Questions

Grading Bond FAQs

What is a grading bond?
A grading bond guarantees that permitted earthwork is finished to the agency's standard. It protects the city or county: if the job stops and leaves an unstable slope, missing drainage or a hazard the agency has to correct, the bond funds that work. It is not insurance for the owner. If the surety pays, the owner reimburses it in full.
Are there two different bonds called a grading bond?
Yes, and mixing them up sends you to the wrong product. A grading permit bond is posted by the property owner and protects the city as a condition of the permit. A grading performance bond is posted by the grading contractor and protects the project owner, guaranteeing a grading contract. Which one you need depends on whether a city or a customer is asking.
Who posts the grading permit bond, the owner or the contractor?
The property owner, in most jurisdictions. Los Angeles is explicit: LAMC §91.7006.5 requires the owner of the property to file the bond, executed by the owner and a corporate surety admitted in California. Contractors often arrange it, and some agencies accept a contractor as principal, but the permit holder is normally who the bond names.
What is a grading performance bond?
An ordinary contract performance bond written over grading scope. The grading contractor is the principal, the project owner or general contractor is the obligee, and it guarantees the grading contract gets performed. It is normally paired with a payment bond and often preceded by a bid bond. Nothing about it is special to grading except the work being bonded.
Is a rough grading bond different from a precision grading bond?
No. Rough grading, fine or precision grading, and retroactive grading describe the stage and scope of the earthwork, not different bond products. The same permit bond or contract bond covers all of them. What changes is the estimate the amount is calculated from, not the instrument.
When does a grading permit require a bond?
It depends on the volume of earth and where you are. In the City of Los Angeles the trigger is excavation or fill of 250 cubic yards or more in a hillside area. Other cities and counties set their own thresholds, and some bond every grading permit. Read the permit condition. It will say.
How much is a grading bond?
The amount is not a fixed figure. The agency sets it to cover the cost of the grading, including drainage and protective devices and any corrective work needed to eliminate engineering and geological hazards. What you pay is a premium, a percentage of that amount set by underwriting, not the bond amount itself.
Can I get a grading bond with bad credit?
Usually yes, and this is where the program matters. We write site and grading bonds up to $250,000 on credit alone: no financial statements, no work-in-progress schedule. Above that, up to $750,000, it becomes a full submission with financials. Credit moves the rate, not the eligibility.
How large a grading bond can you write?
Up to $750,000 with a full submission: CPA-prepared financials, work on hand, and personal indemnity. The first $250,000 of that is available on credit alone, which is the tier most permit-driven grading jobs actually need.
Does the surety company have to be rated?
Often, and it is worth checking before you buy. San Diego requires the issuing surety to hold an A category or better rating from a recognized rating agency, and reviews that rating at least annually. If the carrier slips below it, the property owner has to replace the bond. A cheap quote from an unrated market can be rejected at the counter.
Who requires a grading bond?
The permitting agency: a city or county building, engineering, or development services department. Los Angeles bonds grading permits through LADBS; unincorporated county areas go through LA County Public Works; San Diego bonds grading and right-of-way permits through Development Services. The requirement, amount and form all come from that agency, not the state.
How fast can a grading bond be issued?
Inside the credit-only tier, often the same or next business day once we have the permit details and the amount the agency set. Larger bonds need the financial package first, so the realistic timeline is days rather than hours. Tell us the permit deadline and we will tell you straight whether it is reachable.
What does the agency need from me?
The permit number or application, the engineer's cost estimate that sets the amount, the legal name of the property owner exactly as it will appear on the bond, and in most jurisdictions the agency's own bond form. Getting the owner's name right matters: a mismatch is the most common reason a bond gets handed back.
When is a grading bond released?
When the agency accepts the work, not when the dirt stops moving. The bond runs from the day it is filed until the work is complete to the department's satisfaction; San Diego holds it until the as-built and as-graded reports are approved and the permit is closed. Until then it renews, and you pay premium each year.
What happens to the grading bond if I sell the property?
It does not transfer with the deed. The bond names the owner who filed it, so a change of ownership means a new bond from the new owner before the old one comes off. If you are selling mid-project, raise it early: an open grading permit with a bond attached is a closing problem people find late.
Is a grading bond the same as a subdivision bond?
They are close cousins and often confused. A subdivision improvement bond covers the full set of improvements in a development: streets, sewers, drainage. A grading bond covers the specific permitted earthwork. A development can need both, issued separately, against different estimates.
Can I buy a grading bond online?
Not usefully. The amount comes off an engineer's estimate, many agencies require their own form, and some check the carrier's rating, so there is nothing for an instant-issue site to price. These are placed by a broker who reads the permit condition first, then matches it to a market that writes site work.
Permit & Site Improvement

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