Running a business comes with risks and your customers can be affected by those risks. Luckily there are safeguards in place that can help protect you and your customers. If you operate a parking lot, then you may find a parking lot license bond is a necessity for your business.
A parking lot license bond is required for businesses that engage in the activity of operating parking lots. Essentially, what a parking lot bond guarantees is loss from theft, damage, or unlawful taking of a vehicle that is in the care, custody, or control of the parking lot owner.
This unique type of surety bond is also referred to as a valet bond. It is recommended that if you are required to obtain a parking lot bond you also buy a fidelity bond. Often, the city (like Los Angeles) is the party who requires this type of bond.
City of Los Angeles Parking Occupancy Tax Bond
The City of Los Angeles requires all parking lot owners to obtain a bond. The City requires the principal to report to the CITY on or before the 25th day of each calendar month the total fees charged and received during the preceding calendar month, and to remit to the CITY the full amount of Parking Occupancy Tax “POT” collected and POT not collected, but required to be collected. If the principal does fulfill their duties The City will file a claim on the Surety Bond. They also require a Parking Permit bond.
San Francisco Parking Tax Collection Bond
Anyone that operates in the City and County of San Francisco is required to obtain a Parking Tax Bond. All taxes and fees are due on or before the last day of the month. The city imposes an effective tax of 25%. If these taxes or fees are not paid the City/County will file a claim on your bond.
Keep reading to learn more about parking lot license bonds.
A parking lot license bond is a type of surety bond that helps ensure that businesses that operate parking lots don’t commit fraud or cause any losses to their customers. It also helps ensure that the business remains compliant with local rules and regulations.
How can a parking lot license bond protect consumers? For example, if a parked car is damaged or stolen, then the victim can file a claim against the parking lot license bond in order to receive financial compensation for their losses.
The way that a parking lot license bond works, is the surety bond acts as a financial guarantee that the owner of the bond will fulfill all obligations set by the obligee. Who is the obligee? There are three important parties to be aware of when talking about surety bonds and parking lot license bonds.
- A principal. The business that secures the parking lot license bond.
- An obligee. This is the party who requires the surety bond, which is often a city in the case of parking lot license bonds.
- A surety. The guarantor of the parking lot license bond.
If someone files a claim against the parking lot license bond then the surety has to pay out the claim if it is valid. For example, let’s say you park your car in a parking garage overnight and when you return in the morning your car has been stolen. You can file a claim against the parking lot license bond and the surety would have to investigate that claim. If they find the claim to be valid, then they would initially pay out the claim amount to the victim. The principal would then owe that claim amount to the surety and would possibly owe them additional fees and interest.
If you’re wondering how much a parking lot license bond costs, there’s no simple answer here. The cost of a surety bond depends on a few different factors.
The bonding capacity. This is the highest amount anyone can claim against the parking lot license bond and the required minimum amount is set by the obligee. The bonding capacity for a parking lot license bond can vary by city or state.
The rate you’re offered. Usually, surety bonds are priced as a small percentage of the bonding capacity. The rate you’re offered can vary.
Your credit score. The main factor that impacts the rate you'll be offered is your personal credit score. The higher your credit score is, the lower a percentage you’ll be offered.
Your business history. How long you have been in business, your industry experience, and what your business finances look like can all impact the rate you’re offered on a parking lot license bond. The more established and secure your business is, the less you’ll spend.
Let’s look at an example of how this pricing can work. If your parking lot license bond has a bonding capacity of $20,000 and you’re offered a rate of 1%, then you’ll spend $200 to secure a parking lot license bond.
Not sure where to start when it comes time to apply for a parking lot license bond? We’re happy to help! There’s no need to stress if you have been turned down by another company. We’re proud to offer hard to place bond programs that can help you meet your business goals.
Our application process is designed to be straightforward and speedy. You can get a free online quote by completing a simple application or by calling 888-518-8011. Our surety bond experts will be with you every step of the way and can walk you through the process.