City of Mobile, Alabama - Right of Way Permit Bond

What Is the Purpose of the Mobile Right of Way Permit Bond?

The City of Mobile Engineering Department requires contractors to acquire a custom Right of Way Permit Bond as a requisite of the city’s different right of way permit applications. The surety bond ensures that the contractor will follow the regulations of their permit, and acts as a fiscal guarantee in cases of the principal failing to uphold such obligations or causing damages. 

Under Mobile, Alabama Code of Ordinances Section 57-234, applicants for a landscape, major, minor, or small project right of way permits are required to obtain a custom Right of Way Permit Bond. The permit job may involve excavation work, digging, restoration, or maintenance on streets or sidewalks within a public right of way.

An unconditional letter of credit may be submitted as an alternative to the bond requirement. The City Engineer may also waive the requirement if the permittee has proved to have the financial ability to pay for the cost of repairs that have resulted from their permitted activity.  

What Do Surety Companies Need to Know About the Mobile Right of Way Permit Bond?

Suretypedia has confirmed with the City of Mobile’s Engineering Department that no claims have been made in the last 10 years on the Right of Way Permit Bond. This surety bond has been determined to be low risk for underwriters in Alabama to take on. The custom bond limit is determined by the City Engineer and is based on the estimated cost of the right of way restoration.

The City Engineer may file a claim on the bond if the contractor violates the terms of their right of way permit pursuant to Mobile, Alabama Code of Ordinances Section 57-233 through Section 57-239. However, claims will typically only be filed if the contractor fails to complete the construction job to the approved permit standards, fails to maintain the right of way area following the official acceptance of the completed permit work by the City Engineer, or if the job is simply not completed. 

If a claim is filed on the bond, the surety provider has 10 days to respond to the City Engineer with direct payment of the bond or authorization for the City Engineer to complete the permit work at the expense of the surety company. Failure to do so will result in the City of Mobile charging the principal and the surety provider to pay all costs for the completion of such permit work. 

How Much Does the Mobile Right of Way Permit Bond Cost?

The Mobile Right of Way Permit Bond cost is typically based at 1 to 5% of the custom bond limit. For example, a surety provider that is underwriting a $50,000 bond limit may offer a rate of $250 annually for preferred credit applicants. 

City of Mobile, Alabama Right of Way Permit Bond Details

The City of Engineering Department requires the original, signed and sealed Mobile Right of Way Permit Bond to be filed with their office. The bond must remain on file for two years following the start date of the excavation permit work. 

The signed and sealed bond form should be mailed to the following address:

City of Mobile
City Engineering Department
PO Box 1827
Mobile, AL 36633

All right-of-way permit applications can be found here and must be sent to the above address as well. 

The Mobile Right of Way Permit Bond is not up for cancellation by the principal or surety provider. The bond will be null and void once two years have passed following the acceptance of the permit work for competition status and all obligations have been fulfilled. Renewal of the bond is not available.