In the Superior Courts of the state of California, various counties of those courts require undertakings for specific section codes pending appeal or pending a determination of a specific item pending appeal. In these courts, there are a lot of obscure and various undertakings for what’s commonly referred to as costs.

Under Section 529.2 in the California Court procedure rules, there is a proceeding where a petitioner can oppose a real estate development or a housing development for affordable housing. Pending the determination of whether their grounds for the opposition are, in fact, valid and legitimate, the party petitioning the court to oppose and stop development is required to post an undertaking for costs. This is, again, pursuant to section 529.2. The undertaking could be $500,000, the maximum amount provided by law, or can be set at a lesser amount by the Court. Whether it’s a minimum or higher amount, a Court Order must set it.

Depending on the size of the development in these situations, the bond itself can be considered risky because a lot of real estate developments incur significant costs due to delays in building. Costs such as:

  • financing of the property,
  • storage fees for the building materials,
  • contractor delays in starting their work, and
  • attorney fees etc., 

are easily proven in Court.

The cost examples I just listed are only examples provided by my office and are not the only possible costs that can be incurred by the party that is delayed in building their project. The list is to give you an idea of what the costs can be or what the opposing party is going to try to prove in court.

Ultimately, it’s for the delayed party to prove the costs they sustained and for a judge to decide whether costs and damages were sustained by the party that’s been restrained.

The surety will either require the entity applying for the bond to provide financial statements so that they can underwrite the matter or deposit collateral acceptable to the surety with the surety pending the final resolution of the case. 

Neil Pedersen
PEDERSEN & SONS SURETY BOND AGENCY, INC.
15 Maiden Lane Suite #800
New York, NY 10038
212-227-7277
800-720-7277
neil@courtbondnow.com

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