Bond Information

Why Is A Bond Required?

A Bond is required for the following permit types: Demolition, Sediment Control, Grading, Stormdrain, Paving, and Driveway.  This is to insure completion of the work as specified in the Montgomery County Codes.

What Are The Different Types Of Bonds?

There are four types of bonds:  

1. Performance Bond - executed by the Insurance Company according to the forms provided by the County to include a Power-of-Attorney statement.
2. Letter of Credit - executed by the bank, in the form provided by the County.
3. Cash Bonds - may be posted in the form of cash, check, or money orders.
4. Certificate of Guarantee - obtainable by members of the Maryland Development of Guarantee Group (ONLY).

How Is The bond Amount Determined?

For Demolition permits the bond amount is based on the estimated cost of the demolition activities, the minimum being $400.00 in accordance with Montgomery County Code - Chapter 8.

For Right-of-Way permits (excluding Short Term Road Occupancy and Revocable Permits) the bond amount is determined based on Montgomery County Code - Chapter 49 by the Department of Permitting Services using the “ROW Bond Estimating Prices” list.  This is a list of specific construction activity costs which must be approved by DPS.  The prices are an average based on surveys periodically taken from the constructing community (1 to 3 years).

For Sediment Control permits the bond amount is determined by the Montgomery County Code, Chapter 19 using the following formula: .02 x total disturbed area (sq. ft.) $300.00 (minimum bond amount) = Total SC Bond ($10,000.00 Maximum) Estimated Stormwater Management Cost = Total Bond Amount. The stormwater management portion of the bond is based on actual costs of stormwater devices proposed

When Should A Bond Be Submitted?

Department of Permitting Services determines the bond amount and notifies the applicant.  When notification is received, the applicant submits bond prior to the issuance of the required permit.  Please note that the bond posted for the permit is returned to the Permittee (applicant). Refer to the DPS Policy on Bond Acceptance and Refunds.

How Long Is The Bond Needed?

Department of Permitting Services requires that the bond be valid for the duration or life of the permit.

What is Required For Submitting And Getting A Bond Approved?

In order to clarify procedures for completing application and bond forms the following list has been developed which will help expedite processing of bonds.

All Information shown on the bond may be typed or printed and must be legible.

1. The bond must note the full name of the person, persons, company, corporation or partnerships submitting an application for permit.
1. Application for a permit MUST be signed by the applicant.  Names on the permit application and the bond must correspond.
2. If the applicant is a corporation, the person signing MUST hold the office of the president or vice-president.  The signature is to be attested by the secretary or assistant secretary.  All signatures must have a printed or typewritten name beneath and indicate the title of the office held by the person signing the application.
3. The signature of an individual as permitee on a bond MUST have the word “SEAL” or “L.S.” immediately after the signature; this includes someone signing for a partnership, but not for a corporation.
4. Bonds from corporations MUST have a corporate seal.
2. The name of the insurance company preparing the bonding document must be fully noted.
3. The State of which the insurance company resides must be shown on the bond.
4. The bond amount must be written out.  For example:  Two-Thousand-Three-Hundred dollars ($2,300.00).
5. The date the bond was executed must match the certificate date on the Power-of-Attorney.

General wording on the bond shall correspond to wording approved by the County Attorney’s Office.  Sample forms for the Performance Bond and Letter of Credit are available in the below table.

Both the bonding company and the power of attorney signing for the bonding company must be registered with the MontgomeryCounty, Clerk of the Circuit Court.

What Happens If No Work Has Started And I Want To Cancel The Permit?

Notify the Department of Permitting Services that the work has not started and that there is no intention on beginning work in written form.  The Department of Permitting Services will inspect the site, confirm that no work has begun, review the permit requirements based on development approvals and if possible cancel the permit and return the bond.

What Happens If No Work Has Started But Not Completed?

If the Permitee is not willing or not able to complete the work, the Department of Permitting Services will seize the funds from the bond to complete the work.

When Will The Bond Be Returned?

The Permittee is required to call the Department of Permitting Services for final inspection.  The Department of Permitting Services will release the bond after a final inspection has been completed and all aspects of the completion of the project are approved. Posted bonds are returned to the permittee of record.

How Quickly Will The Bond Be Released?

Bonds are released on an average of six (6) weeks.  Processing time for release of bonds varies according to workload and complexity of the permit.