Chapter 18.40 — BONDING AND IMPROVEMENT SECURITY

Sections:

• 18.40.010 Improvement agreement.

• 18.40.020 Supplemental improvement reimbursement agreement.

• 18.40.030 Improvement security.

• 18.40.040 Amount of security.

• 18.40.050 Improvement security release.

• 18.40.060 Forfeiture.

Any act or obligation required as a condition of the approval of a subdivision final map, a parcel map waiver, lot merger, or lot line adjustment which has not been completed prior to a final approval shall be guaranteed by execution of a suitable agreement in a form prescribed herein and approved by the city attorney. The agreement shall include the following minimum terms and conditions: A. Construction of all improvements per the approved plans and specifications. B. The maximum period within which all improvements shall be completed to the satisfaction of the city engineer. C. In the case of a deferred improvement agreement for any final map, designated remainder parcel, parcel map waiver, lot line adjustment, or lot merger, said agreement shall provide for the commencement of the construction of all required improvements within ninety days of receipt of a notice to proceed from the city upon a finding by the city engineer that fulfillment of construction requirements is immediately necessary for the reasons of:

1. The public health and safety; or
2. The required construction is a necessary prerequisite to the orderly development of the surrounding area. D. Provisions for inspection of all improvement by the city engineer and payment of fees by the subdivider for the cost of such inspection and all other incidental costs incurred by the city in enforcing the agreement. E. A provision that, if the subdivider fails to complete the work within the specified period of time, or any extended period of time that may have lawfully been granted to the subdivider, the city may, at its option, complete the required improvement work and the subdivider and his surety shall be firmly bound, under a continuing obligation, for payment of the full cost and expense incurred or expended by the city in completing such work, including interest from the date of notice of said cost and expense until paid. F. That in event of litigation occasioned by any default of the owner or subdivider, his successors, or assigns, the owner or subdivider, his successors, or assigns agree to pay all costs involved, including reasonable attorney's fees, and that the same may be recovered as part of a lien against said real property. G. The agreement shall bind not only the present owner, subdivider, or developer, but also his heirs, successors, executors, administrators, and assigns so that the obligations run with said real property. H. All agreements shall be executed by the owner, developer, or the subdivider of the property or land being divided, with all signatures acknowledged before a notary public. Where required by the city attorney, said agreement shall be recorded in the office of the county recorder at the expense of the owner, subdivider, or developer. I. Additional terms or provisions, as may be necessary, pertaining to the forfeiture, collection, and disposition of improvement security upon the failure of the contracting party to comply with the terms and provisions thereof or with the terms and provisions of this title. (Ord. 82-3-889 § 1 (part))

Where the subdivider is required to install supplemental improvements pursuant to Section 18.32.100 of this title, the city shall enter into an agreement to reimburse the subdivider pursuant to Section 66486 of the Subdivision Map Act. (Ord. 82-3-889 § 1 (part))

Improvement securities shall be required to be posted as a guarantee of the performance of any act, improvement, or obligation required as a condition of approval of any final map, parcel map waiver, lot line adjustment, or lot merger. Unless otherwise provided herein, all such improvement securities shall be provided in one of the following forms at the option of and subject to the approval of the city engineer and/or city attorney: A. A bond or bonds by one or more duly authorized corporate sureties substantially in the form prescribed by the Subdivision Map Act and subject to the approval and acceptance of the city attorney and city council; B. A deposit with the city of cash or negotiable bonds;

C. A lien upon the property to be subdivided, created by contract between the owner of the property and the city when the city finds that it is not in the public interest to require installation of the required improvement sooner than two years after the recordation of the map; D. Any other form of security, including security interests in real property, which the city engineer and/or city attorney shall determine to be equivalent to the foregoing forms of security; E. Any written contract or document creating security interests established pursuant to Sections 18.40.030(C) and 18.40.030(D) above shall be recorded with the Los Angeles County recorder. From the time of recordation, a lien shall attach to the real property described therein, which lien shall have the priority of a judgment lien in the amounts specified. The city may at any time release all or any portion of the property subjected to any such lien or security interest or subordinate the lien or security interest to other liens or encumbrances provided the city council determines that security for performance is sufficiently secured by a lien on other property or that the release or subordination of the lien will not jeopardize the completion of agreed-upon improvements. (Ord. 82-3-889 § 1 (part))

Security to guarantee the performance of any act or agreement shall be in the following amounts: A. An amount determined by the city engineer equal to one hundred percent of the total estimated cost of the improvement or of the act to be performed, conditioned upon the faithful performance of the act or agreement. The total estimated cost of the improvement shall provide for increase for projected inflation computed to the estimated midpoint of construction. B. An additional amount determined by the city engineer equal to fifty percent of the total estimated cost of the improvement, or the performance of the required act, securing payment to the contractor, his subcontractors, and to persons furnishing labor, materials, or equipment to them for the improvement of the performance of the required act. C. An amount equal to ten percent of the estimated cost of the improvements for the guarantee and warranty of the work for a period of one year following the completion and acceptance thereof against any defective work or labor done, or defective materials furnished. (Ord. 82-3-889 § 1 (part))

Improvement security may be released upon the final completion and acceptance of the act or work; provided, however, such release shall not apply to the amount of security deemed necessary by the city engineer for the guarantee and warranty period, nor to costs and reasonable expense fees, including reasonable attorney's fees, incurred by the city in enforcing any improvement agreement. When appropriate, such release shall be recorded in the office of the county recorder. (Ord. 82-3-889 § 1 (part))

In addition to any other remedy provided by law, upon the failure of the subdivider to complete any improvement, acts, or obligations within the time specified in the improvement agreement, or upon failure of the subdivider to faithfully comply with the terms and provisions of this chapter or any improvement security given thereby, the city council may, upon notice in writing of not less than ten days served upon the person responsible for the performance thereof or upon notice in writing of not less than twenty days, served by registered mail addressed to the last-known address of such person, determine that the foregoing have not been complied with or said work has not been completed, and may cause to be forfeited to the city such portion of said improvement security given for the performance of the foregoing. (Ord. 82-3-889 § 1 (part))