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Grading Bond: Grading bond guarantees that the grading construction that the developer, builder or individual(s) plans to undertake will be successfully completed per the terms of the grading permit.
When requesting a grading bond on an account that has already been previously submitted to the surety, among the most important information that needs to be provided to the surety are the following information:
- The Bond Request form – this will provide the surety with a basic overview of the current bond being requested.
- A copy of the grading permit or application for a grading permit.
- A copy of the public entity's own engineer's estimate. Document provides a basic assessment of what the public entity's believe the work will cost. It is from this estimate that the bond amount is usually derived from. It is usually determined by multiplying the area of the grading work with a specified dollar amount per cubic feet
- Public entity will usually have their own grading bond forms so include a copy of the form with the submission.
- Provide a copy of the contractor's license for the company performing the grading work.
- On smaller grading bond requests (under $100,000), surety will most likely only ask for the most recent business and personal financial statements and most recent business and personal bank statements to verify access to cash.
If the grading bond is the first bond being requested on behalf of a new developer and/or the size of the grading bond exceeds $100,000, the following information might be requested by the surety.
- Developer's Questionnaire.
- Business financial statements (balance sheet, income statement, statement of cash flows and aging schedule for accounts receivable and accounts payable) for the company's last 3 fiscal year end.
- Interim Business Financial Statements.
- Personal Financial Statement for all owners of the company
- Articles of incorporation (if corporation), LLC agreement (if business is a LLC) or partnership agreement (if business is a partnership).
- Bank reference letter and last 3 months most recent business and personal bank statements.
- Copy of the trust if any of the owners of the business have their assets held in that trust.