Mountain Brook Land-Disturbing Bond: A Comprehensive Guide

June 22, 2022

Mountain Brook Land Disturbing Bond

This guide provides information for insurance agents to help their customers obtain a Mountain Brook Land-Disturbing bond

At a Glance:

  • Average Cost: 
    • Limit of less than $25,000: $100
    • Limit of $25,000 or more: Between 0.5% to 5% of the bond amount based on the applicant’s credit
  • Bond Amount: Determined on a case-by-case basis (more on this later)
  • Who Needs it: All developers seeking to conduct land-disturbing activities in Mountain Brook, Alabama
  • Purpose: To ensure the city will receive compensation for financial harm if the developer abandons the job or does inadequate work
  • Who Regulates Land-Disturbing Activities in Mountain Brook: The Mountain Brook Building Inspections Department

Background

Mountain Brook Municipal Code Sec. 113-41. requires all developers seeking to conduct land-disturbing activities to obtain a permit from the Building Inspections Department. The Mountain Brook City Council enacted the permitting requirement to ensure that land-disturbing activities do not adversely affect the city. To provide financial security for the enforcement of the permitting law, developers must purchase and maintain a surety bond to be eligible for a permit.

What is the Purpose of the Mountain Brook Land-Disturbing Bond?

Mountain Brook requires developers to purchase a surety bond as part of the application process to obtain a land-disturbing permit. The bond ensures that the city will receive compensation for financial harm if the developer fails to comply with the regulations set forth in Mountain Brook Municipal Code Sec. 113-119. Specifically, the bond protects the public in the event the developer abandons the job or fails to restore land altered throughout the course of a project to a safe condition. In short, the bond is a type of insurance that protects the public if the developer violates the terms of their permit.

Mountain Brook Land Disturbing Bond Form

Mountain Brook Land Disturbing Bond Form

How Can an Insurance Agent Obtain a Mountain Brook Land-Disturbing Surety Bond?

BondExchange makes obtaining a Mountain Brook Land-Disturbing bond easy. Simply log in to your account and use our keyword search to find the “Mountain Brook” bond in our database. Don’t have a login? Enroll now and let us help you satisfy your customers’ needs. Our friendly underwriting staff is available by phone at (800) 438-1162, email, or chat from 7:30 AM to 7:00 PM EST to assist you.

At BondExchange, our 40 years of experience, leading technology, and access to markets ensures that we have the knowledge and resources to provide your clients with fast and friendly service whether obtaining quotes or issuing bonds.

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How is the Bond Amount Determined?

Mountain Brook Code of Ordinances 113-119 dictates that the bond amount must be:

  • $1,000 per acre for clearing operations only
  • $2,000 per acre for clearing work done in designated floodways, floodplains, or areas susceptible to landslides
  • $10,000 per acre for earthwork or clearing and earthwork operations
  • $20,000 per acre for earthwork or clearing and earthwork operations done in designated floodways, floodplains, or areas susceptible to landslides

Is a Credit Check Required for the Mountain Brook Land Disturbing Bond?

A credit check is not required for Mountain Brook Land-Disturbing bonds with limits of less than $25,000. Because these bonds are considered relatively low risk, the same low rate is offered to all developers in Mountain Brook, regardless of their credit history.

Surety companies will run a credit check on the developer to determine eligibility and pricing for land-disturbing bonds with limits of $25,000 or more. Developers with excellent credit and work experience can expect to receive the best rates. Developers with poor credit may be declined by some surety companies or pay higher rates. The credit check is a “soft hit”, meaning that the credit check will not affect the developer’s credit.

How Much Does the Mountain Brook Land Disturbing Bond Cost?

Mountain Brook Land-Disturbing bonds with limits of less than $25,000 cost just $100.

Bonds with limits of $25,000 or higher can cost anywhere between 0.5% to 5% of the bond amount. Insurance companies determine the rate based on several factors including your customer’s credit score and experience. The chart below offers a quick reference for the cost of a $25,000 bond requirement.

$25,000 Land Disturbing Bond Cost

Credit Score Bond Cost (1 year)
625+ $125
600 – 624 $375
550 – 599 $625
525 – 549 $750
500 – 524 $1,250

*The credit score ranges do not include other factors that may result in a change to the annual premium offered to your customers, including but not limited to, years of experience and underlying credit factors contained within the business owner’s credit report.

Who is Required to Purchase the Bond?

Mountain Brook requires developers to purchase a surety bond as a prerequisite to obtaining a land-disturbing permit. To paraphrase Mountain Brook Code of Ordinances 113-62, land-disturbing activity refers to any action that can lead to soil erosion or sedimentation into the MS4 (city owned stormwater system).

Exemptions to this definition include:

  • Activities conducted on land that does not drain to the MS4
  • Agriculture
  • Silviculture
  • Minor projects resulting in little soil erosion
  • The construction, repair, or rebuilding or railroad tracks
  • Minor subsurface exploratory excavations supervised by qualified engineers
  • The opening of individual burial sites
  • Digging of wells or environmental monitoring wells

How Do Developers Apply for a Land-Disturbing Permit in Mountain Brook?

Developers in Mountain Brook must navigate several steps to secure a land-disturbing permit. Below are the general guidelines, but applicants should refer to the permitting statutes for details on the process.

Step 1 – Create a Control Plan

Mountain Brook requires developers to create a control plan, also referred to as a best management practice (BMP) plan, detailing how they plan to ensure their land-disturbing activities do not cause harmful soil erosion and sedimentation. The control plan must specify the developer’s BMP and be prepared by a qualified and credentialed professional. Information on what must be included in the plan can be found in Mountain Brook Code of Ordinances 13-172.

Step 2 – Complete the Application

Developers must submit submit a completed permit application, including their control plan, to the following address:

56 Church Street
Mountain Brook, AL 35213

Developers must complete the application in its entirety, and pay a $1,000 fee. Developers working on projects that require post construction work must pay an additional $1,000 fee.

Step 3 – Purchase a Surety Bond

Developers are required to purchase a surety bond with the following limit:

    • $1,000 per acre for clearing operations only
    • $2,000 per acre for clearing work done in designated floodways, floodplains, or areas susceptible to landslides
    • $10,000 per acre for earthwork or clearing and earthwork operations
    • $20,000 per acre for earthwork or clearing and earthwork operations done in designated floodways, floodplains, or areas susceptible to landslides

Do Developers Need to Renew Their Land-Disturbing Permits?

No, as most land-disturbing permits will remain active for the duration of the project. However, developers must apply for a new permit for every land-disturbing activity then plan to undertake.

What are the Insurance Requirements for Land Disturbing Permits in Mountain Brook?

Mountain Brook does not require developers to purchase any form of liability insurance as a prerequisite to obtaining a land-disturbing permit. Developers must purchase and maintain a surety bond.

How Do Mountain Brook Developers File Their Land-Disturbing Bonds?

Developers should submit their completed bonds form, including the power of attorney, to the following address:

56 Church Street
Mountain Brook, AL 35213

The bond requires signatures from the surety company that issues the, the developer, and a commissioned notary. The surety company should include the following information on the bond form:

  • Legal name and phone number of entity/individual(s) buying the bond
  • Surety company’s name and phone number
  • Bond amount
  • Date the bond is signed

What Can Mountain Brook Developers Do to Avoid Claims Against Their Land-Disturbing Bonds?

To avoid claims on their bonds, developers in Mountain Brook must follow all permit regulations in the city, including some of the most critical issues below that tend to cause claims:

  • Do not abandon the job
  • Adhere to all BMPs
  • Ensure that excess soil erosion and sedimentation does not occur

What Other Insurance Products Can Agents Offer Developers in Mountain Brook?

Most reputable developers will purchase insurance. Bonds are our only business at BondExchange, so we do not issue liability insurance, but our agents often utilize brokers for this specific line of business. A list of brokers in this space can be found here.

How Can Insurance Agents Prospect for Alabama Land Disturbing Permittee Customers?

Mountain Brook unfortunately does not provide a public database of active developers. We suggest contacting the city directly to obtain this information.t Contact BondExchange for additional marketing resources. Agents can also leverage our print-mail relationships for discounted mailing services.

 

2022-12-02T17:00:07-05:00