Land Development Playbook

LAND DEVELOPMENT PLAYBOOK 2025 EDITION

CONFIDENTIAL- the information contained herein is proprietary to Century Communities and is not to be shared with anyone outside the organizations. This includes any reproduction of the entire document or portions, including making any physical or digital copies.

TABLE OF CONTENTS

Introduction

01

Century Proud

02 04 06 14

Overview

Land Development Professional Land Devolpment Schedule

Schedule Development Schedule Management

14 16 17

Key Takeaways

Land Development Budget

18 20 23 24 25 26 27

Budget Development Budget Management Budget Variance Memo

Change Orders Contingency Key Takeaways

Bidding and Contracting

30

Bidding

31 35

Key Takeaways

Finished Lot Delivery

38

Lot Standards

38 40 42

Construction Turnover

Key Takeaways

Project Management

44 44 46 47 52 54 57 57 57 57 58 57 59

Land Development Operations

Stormwater Pollution Prevention Plan (SWPPP)

Aerial Survey & Inspection Land Development Close Out

Key Takeaways

Community Opening & Presentation

Vertical Construction

Sales HOA

Marketing

Key Takeaways

Surety Exoneration

Tract Acceptance & Bond Release

59 59 60

Bond Management Key Takeaways

Land Development in Land Acquisition, Planning, and Entitlement

62

Land Development Responsibilities – Land Acquisition Land Development Responsibilities – Planning & Entitlement

62 64 65

Key Takeaways

Century Communities University

68

Takeaways

69

CENTURY PROUD

Externally, “A Home For Every Dream” is our tagline for future and existing Homeowners. Internally, our goal is to be “Century Proud” in everything we do, every day.

WHAT DOES IT MEAN TO BE “CENTURY PROUD”? As a Century Land Development Professional, there are three components of being “Century Proud”: A Represent yourself in the most professional way possible. How you carry yourself, how you speak, how often you smile, and your attire all influence how our Customers, Trade Partners, Suppliers and internal associates perceive you. A One of our company mottos is “Every Home. Every Room. Every Day.” As a Land Development Professional, this can be translated to: “Every Community. Every Lot. Every Day.” How our communities look and feel is a direct reflection on our company and the pride we take in our work. A Provide a first-class experience to every Customer, Trade Partner, Supplier and internal associate every day. Effective communication, scheduling, and jobsite management will lead to faster land development, build times, high-quality homes, and delighted Homeowners. As a valued member of the Century team, we challenge you to be “Century Proud” and give your personal best each and every day.

LAND DEVELOPMENT PLAYBOOK | Century Proud | 2

OVERVIEW

INTRODUCTION The Century Communities (Century) Land Development (LD) Playbook helps position each Century LD Professional for success by giving them a framework to meet Century’s high LD standards in terms of scheduling, budgeting, bidding, project management, and delivering completed lots to our homebuilding team. This Playbook includes many of Century’s LD Policies, Procedures, and Key Takeaways, although it does not include all project variables and LD best practices. This Playbook also provides background information on the necessity of Century’s LD standard operating procedures as well as the connections between various LD process steps. Whether your title is Land Development/Acquisition Manager, Area/Senior Land Development Manager, Director of Land Development/Acquisition, Vice President of Land/Land Development/Land Acquisition, Senior Vice President of Land/Land Development/ Land Acquisition, we will use the title of Land Development Professional for ease of explanation throughout this Playbook. This Playbook will serve as a resource for you in your role, understanding and putting this information into practice offers you the greatest chance for success at Century.

LAND DEVELOPMENT PLAYBOOK | Overview | 4

LAND DEVELOPMENT PROFESSIONAL

As a Land Development Professional, you play a crucial role in shaping the future of residential communities. You are responsible for overseeing the entire process of transforming raw, undeveloped land into viable, livable spaces. This duty includes managing LD schedules, budgets, bidding and contracting, delivering finished lots to our home building teams, and project management. Your expertise in navigating complex regulations and environmental considerations is essential to ensuring developments align with local laws and sustainability standards. By effectively coordinating the planning, design, and construction phases, Land Development Professionals contribute significantly to the creation of communities that are not only functional but also attractive and well-integrated into the surrounding environment. Land Development Professionals lay the foundation for new homes and communities that will house future generations. Their work is fundamental to shaping the way we live and ensuring our growing cities are developed in a way that is both sustainable and welcoming. LEADERSHIP Leadership is not confined to management roles. Reflect on the ways you can demonstrate leadership daily. Be mindful of your surroundings and recognize the influence you can have on those around you. Embrace the responsibility to make a positive impact. Take ownership of your role and the contributions you make. For instance, if another Century associate or Trade Partner has a question, ensure you respond promptly, ideally within 24 hours. It may surprise you how your actions, both positive and negative, can impact those around you.

5 | Overview | LAND DEVELOPMENT PLAYBOOK

LAND DEVELOPMENT PLAYBOOK | Land Development Professional | 6

DRESS CODE Looking the part plays a significant role in being a leader. Our appearance helps us maintain a level of professionalism. Professionalism in appearance helps our Trade Partners, Suppliers and internal associates easily identify any Century associate. A professional and consistent dress code consisting of Century branded clothing and/or clothing that is clean and free of stains, holes, and frays. Land Development Professionals are required to wear the following every day on active jobsites: A Company branded hard hat, free of any additional stickers (to be worn at all times in the field on active job sites) A Company branded shirt A Jeans or Khakis (no leggings) A Field boots (no flip flops or tennis shoes) A Pleated or flat front golf shorts (no jean or cargo type shorts) A Company branded high visibility safety vest (to be worn at all times in the field on active job sites) A Company branded name tag with company logo (to be worn when interacting with Customers)

7 | Land Development Professional | LAND DEVELOPMENT PLAYBOOK

LAND DEVELOPMENT PLAYBOOK | Land Development Professional | 8

YOUR PRIMARY RESPONSIBILITIES As a Land Development Professional, you are responsible for ensuring projects progress from the land acquisition phase to vertical construction. This includes the continuous process of updating and adjusting a wide range of Land Development tasks through the development cycle of a project. As a Land Development Professional, you are expected to manage: SCHEDULES, BUDGETS, BIDDING, AND CONTRACTING A Develop and manage schedules and budgets throughout the land development process. A Track and document any schedule and budget variance and communicate between disciplines/ departments. A Manage contingency and risk within all land development scopes of work based on the stage of project development. A Generate bid packages, competitively bid out all LD scopes, and oversee bidding and contracting processes. PRE-DEVELOPMENT PHASE A Support Land Acquisition in due diligence and throughout their Asset Management Committee (AMC) approval process. A Manage LD construction plan and specification document development and value engineering. A Oversee zoning, permitting, and entitlement submittals, reviews, and approvals. A Confirm and track all fees for the project budget, updating and confirming them at least quarterly. A Reference Century Lot Standards to develop a community lot fit plan that takes into account a given home product along with grading, drainage, and utility design for each lot to be delivered. LD CONSTRUCTION PHASE A Supervise initiation of construction activities through a formal process that reviews and aligns expectations based on scopes of work, budgets, and schedules. A Conduct regular meetings with trade partners and suppliers and document and discuss LD schedules, project budgets, and payments, along with all communication required to complete construction documents. A Ensure LD projects are completed on schedule and within budget. A Verify scheduled completion of contracted scopes of work and release payment to trade partners and suppliers. A Ensure compliance with environmental regulations. A Utilize technology platforms, including TraceAir, to monitor and manage all land development projects.

CLOSEOUT PHASE A Conduct a thorough substantial completion inspection and turnover process that includes using standardized checklists for subdivision and finished lot improvements. A Coordinate, manage, document, and ensure the timely completion of all land development warranty and surety obligations. A Coordinate with marketing, vertical construction, sales, and HOA teams on required operational and legal transition processes. TIME MANAGEMENT Land Development involves numerous, concurrent, and dynamic tasks/processes. Each project has several critical path tasks that require attention and contributions from internal team members and external partners. As a Land Development Professional, managing your time and communications effectively can mean the difference between a job completed on-time and on-budget and one that is not. Effective time management supports the upkeep of an efficient budget and schedule, enabling all Trade Partners and Century associates to make the best decisions possible based on up-to-date and accurate information. This allows for a smooth and organized transition from one task to another, which leads to better-quality communities, finished lots, and homes and on-time delivery to your internal and external partners and ultimately, Century’s Homeowners. Tools of the Trade are the physical tools or information required for successful completion of your job. When considering the tools necessary to do your job effectively, one might first think of a computer and phone along with access to project files and communications. Additional important tools relate to the project’s stage of development and your location of support (e.g., office, auto, field). Field items include a hard hat, boots, and other safety equipment. The following tools should always be on hand and easily accessible. Additional tools may be required depending on your region or division. REQUIRED TOOLS OF THE TRADE: A Company issued laptop loaded with all necessary programs along with access to all relative Century drives, files, and Land Development technology platforms and tools. A Phone: Always have your phone with you and where you can hear it and answer calls, texts, and emails immediately. Communicating in real time with your internal and external partners as you walk the jobsite will help keep you on schedule. A iPad: In addition to a regular laptop for daily administrative tasks, all field associates must have a company-issued mobile device such as an iPad to accommodate the Mobile Job Management Express (MJME) platform. This MJME is what allows access to and participation in Century’s Land Development Scheduling system (BuildPro). A Hard hat: It is a Century policy that every person on an active jobsite is required to wear a hard hat. This policy is non-negotiable. Safety is our number one priority! TOOLS OF THE TRADE WHAT ARE TOOLS OF THE TRADE?

9 | Land Development Professional | LAND DEVELOPMENT PLAYBOOK

LAND DEVELOPMENT PLAYBOOK | Land Development Professional | 10

Q & A

TRADE PARTNERS AND SUPPLIERS BUILDING A TRUE PARTNERSHIP

A What does it mean to you to be “Century Proud”?

What is a partner? According to Webster’s Dictionary, a partner is “…one that shares; one associated with another especially in an action.” We truly are associated with our Trade Partners and Suppliers in an action. That action is to develop finished lots and build homes. Without our Trade Partners, developing lots and building homes would not be possible. Our Trade Partners and Suppliers are a very important part of our business. A Trade “Partner” is a company that has entered into a contractual agreement with Century to provide services and perform essential work on our jobsites. Our Trade Partners and Suppliers play a crucial role in the success of building our homes by helping to develop land, construct parks and amenities, and maintain a clean and safe jobsite. They are also responsible for numerous other vital tasks that ensure the smooth progress of LD construction, and ultimately help us meet our commitment to delivering quality homes to our Homeowners. Their expertise, dedication, and reliable services are vital to maintaining our construction and safety standards and ensuring timely project completion. When we form a partnership, we also form a relationship. Think of the positive relationships you have in your life. You likely gravitate to the relationships that mean the most to you, including family and close friends. In those relationships, certain qualities exist such as trust, respect, consideration, and care. One could argue these qualities should form the foundation of any strong relationship. You may never have as deep a relationship with a Trade Partner and Supplier as you do with a family member or friend, but the same principles apply. As a Land Development Professional, it is up to you to create the culture on your jobsite. Strive for a culture filled with trust, respect, accountability, consideration and care. SETTING PROPER EXPECTATIONS Setting reasonable safety standards with our Trade Partners and Suppliers is the duty of a Land Development professional. Additionally, set the expectation that your Suppliers and Trade Partners will complete their work on schedule and budget, keep the jobsite clean every day, and complete their work in accordance with Century’s high-quality standards. MANAGE PARTNERS MORE EFFECTIVELY Management of Trade Partners and Suppliers has a lot to do with how you interact with them. From Trade supervisors to laborers, each deserves to be treated with respect and dignity. Speak to every person on your jobsite with kindness and in a professional manner, and always take “the high road” when in a conflict. Creating a culture on your jobsite of mutual respect, accountability, quality, and safety will help ensure your success.

A How can you be a great leader in your communities each day?

A What are the three development phases of the Land Development Professional’s primary responsibilities?

11 | Land Development Professional | LAND DEVELOPMENT PLAYBOOK

LAND DEVELOPMENT PLAYBOOK | Land Development Professional | 12

LAND DEVELOPMENT SCHEDULE

Land Development Schedules (“LD Schedules”) should encompass all activities from the start of the development process through being able to start and close homes. LD Schedule Management is a continuous process of updating and adjusting various LD tasks through the development cycle of a project from Land Acquisition, Planning and Entitlement, Land Development, Home Construction, and Community Completion (including surety release and HOA Turnover/Acceptance). LD Schedule creation requires all Land Development disciplines (Land Acquisition, Planning and Entitlements, and Land Development) involvement to create, complete, and manage an accurate schedule. SCHEDULE DEVELOPMENT A Use Century’s LD Schedule Template to create a project-specific schedule for any new or existing LD project. Include individual schedules for each phase of development and common infrastructure improvements (if applicable). If a project has multiple phases, it requires multiple schedules. If a template does not fit your LD project, please contact National Land Development (NLD) for assistance in creating a template for use. A The LD Schedule should be created during project due diligence and be updated regularly, but no less than monthly if it is in or past the pre-development portion of the project. Once Land Development has started, schedules should be updated weekly, as discussed in the schedule management section below. A LD schedules are unique to each community and are adjusted to fit the scope of the project. All project tasks within the schedule are required to drive and accurately roll up to the milestones, which are used for reporting. A LD Schedule start date task should be based on the Purchase and Sale Agreement (PSA) or Letter of Intent (LOI) execution date. Every task after the start date should be based on a duration tied to a critical path predecessor. When building a schedule for a project already underway, use the start date for the current date and skip over tasks already completed by using 1, -1 for duration and lead time. A Asset Management Committee (AMC) approval dates included in the LD Schedule must represent the latest schedule dates approved by AMC.

Best Practice: Once Land Development has started, schedules should be updated weekly.

13 | Land Development Professional | LAND DEVELOPMENT PLAYBOOK

LAND DEVELOPMENT PLAYBOOK | Land Development Schedule | 14

SCHEDULE MANAGEMENT A Manage and review the LD project schedules with internal and external associates and Trade Partners on a weekly basis, and adjust task and milestone durations as soon as they are known. A Note the critical milestone dates within the schedule template and incorporate those into Region/ Division LD Reports. o Track schedule performance over time and document schedule variances based on information gathered by communicating with internal associates, contractors, engineers, consultants, and municipalities. A Strategize with the division team and responsible external partners on how to manage and tighten individual task durations to maintain or accelerate critical path milestones when delays occur. If you need assistance in accelerating/optimizing your LD Schedule, please reach out to the NLD team for assistance. A Written notice will be given to division and regional leadership, Finance, and NLD whenever any task duration change substantially alters any milestone date by more than 14 days.

Best Practice: Update schedules with the best, most up-to-date information available and for realistic task timeframes.

15 | Land Development Schedule | LAND DEVELOPMENT PLAYBOOK

LAND DEVELOPMENT PLAYBOOK | Land Development Schedule | 16

KEY TAKEAWAYS

LAND DEVELOPMENT BUDGET

A Once Land Development has started, schedules should be updated weekly. A Update schedules with the best, most up-to-date information available and for realistic task timeframes no less than once per month. A Schedule development is a process that requires collaboration between internal and external team members. A Schedule management involves updating all current and future tasks always based on the best information available. A Schedule management should track critical path milestones and proactively manage critical task durations to stay on schedule. A Multiple phase communities are made up of individual phase schedules and can include a common phase schedule. To guarantee on-time individual phase delivery, land development professionals must make sure that all development phase and common phase schedules are managed

Budgeting is a continuous process of reviewing and updating scopes of work, quantities, and unit prices based on the most current and best information available. Land Development Budgets (or “LD Budgets”) are created by using the quantities of materials and labor required to deliver each development task and the associated unit costs charged to us by the vendor or contractor. LD, like vertical home construction, is segmented into multiple category scopes of work, each with its own unique section in our budgeting system. While every project is unique and subject to different scopes of work and sequencing costs, it is critically important to use Century’s standardized LD Budget template and tools. These tools allow different divisions, regions, and corporate teams to accurately track budget data over time and create standardized LD Budget reports that will allow LD Professionals to actively develop and manage budgets using category and cost codes.

17 | Land Development Schedule | LAND DEVELOPMENT PLAYBOOK

LAND DEVELOPMENT PLAYBOOK | Land Development Budget | 18

BUDGET DEVELOPMENT A Evaluate the project and associated scopes of work required to complete project due diligence, planning and entitlement, LD construction, and community closeout (including exonerating any sureties). A Segment the project into phased lot budgets as necessary: 9800, 9801, common, offsite, etc. A Segment every scope of work into Major Categories and Major Codes. A To ensure proper tracking of reimbursable expenses, separate reimbursable work from the standard scope for budgeting and contracting. A Ensure all scopes of work are budgeted to the appropriate cost codes and categories. For instance, the scope of the civil engineer’s work could encompass both planning and LD construction duties. To properly record the expenses in the relevant area, we need divide the budget and contract codes for various tasks. The planning scope would include engineering design, while the LD construction scope would include construction staking.

19 | Land Development Budget | LAND DEVELOPMENT PLAYBOOK

LAND DEVELOPMENT PLAYBOOK | Land Development Budget | 20

Land Development Budget

LAND PLAN

LD BUDGET

The quantities and statements of work (SOW) for each development task need to be combined with an appropriate unit cost to generate an estimated total budget for all line items in every Cost Category.

UNIT COSTS (CURRENT)

QUANTITIES (SOW’s)

CONTINGENCY

21 | Land Development Budget | LAND DEVELOPMENT PLAYBOOK

LAND DEVELOPMENT PLAYBOOK | Land Development Budget | 22

BUDGET MANAGEMENT A Review LD Budgets for all projects in feasibility, under development, and at closeout in LD2 budget meeting with division leadership, finance, NLD and Land Shared Services (LSS). o Budget Variance Memos (BVM’s) are required if current or future phases have greater than a net $100K increase from the last approved budget. See the next section for the BVM process. o Budget reallocations from development line items to Contingency do not require a memo. o Budget reallocations from Contingency up to development line items require NLD/LSS approval when greater than $100K and a Budget Variance Memo if greater than $250K. A Remaining funds in each cost code should be transferred to contingency after each scope of work has been fully contracted versus being kept in separate development cost codes. Surplus funds or contingency should be transferred to and from contingencies as needed. A NLD will schedule monthly LD2 budget meetings before the 10th of each month. NLD, LSS, and Finance are to be represented in each division’s LD2 budget meeting. o LD2 budget meetings are monthly budget meetings held to review LD budgets and make necessary budget revisions. o LD2 Sheet is a report pulled from the accounting system for the LD Budget review. This report contains all the project budgets within a division and the line-item budget codes that comprise these budgets. A LD2 meeting preparation requires the following tasks by the division. o At the first of every month, Finance will pull the LD2 report from the system and distribute it to the division land team. Best practice is to use a shared document, so all parties are updating a live document. o Update the LD2 Sheet with revisions and notes prior to the LD2 budget meeting for review as a group during meetings. o If there is an LD Budget variance requiring a memo, create a draft BVM in advance of the LD2 budget meeting utilizing the standard template found in the NLD SharePoint memo template folder. o Distribute the updated LD2 Sheet and draft BVM to the LD2 budget meeting group prior to the start of the meeting. A Finance is responsible for validating all LD Budget information and supporting financial tables for accuracy. A Within 5 days following the LD2 budget meetings, divisions are to route the attendance sheet and revisions for signature by Division President (DP), NLD, LSS, and Finance then submit LD2 sheet to LSS. A If the bond release major code is not funded during the initial AMC budget creation, the division needs to ensure that code is funded no later than once the project is paved. A Proactively adjust LD Budget before processing a PO, as you need an approved budget to process a PO.

A The division must continue to review LD Budgets on all closed-out communities until all bonds/ sureties have been returned to Century and HOA has signed off on all work. Until those requirements are satisfied, a budget must be kept up to date, and the cost of finishing the balance sheet accrual must equal the budget amount. A later entry will be made to increase the cost to complete, which will be taken to the income statement for that month if the division needs to increase the LD Budget. A Every month, the division needs to circulate an attendance list, which all attendees must sign. A The division is required to submit all the ECC reports, signed checklists, and signed attendance lists to LSS using ServiceNow. BUDGET VARIANCE MEMO PROCESS A Budget Variance Memo (BVM) is a brief write-up that explains significant LD Budget variances (positive or negative) to senior management and Asset Management Committee (AMC). A BVM should be concise, detailed, written in paragraph form, and at a minimum address the following questions within the narrative of the memo: A What steps have been taken to eliminate or partially mitigate a negative budget variance? A What changes have been made to ensure this type of negative budget variance does not occur again? Using the standard BVM template found in the NLD SharePoint memo template folder, division LD team will initiate a draft memo and collaborate with NLD on the proposed resolution to the issue. Disseminate a draft Microsoft Word version of the memo in advance of the LD2 meeting (as noted in the LD Budget section) concurrent with LD2 line-item proposed modifications and associated notes. Once a BVM has been drafted and reviewed by the division, national, and regional teams, the division LD team will utilize DocuSign to obtain approval in the following sequential path. Each signature is required prior to moving on to the next signee. The Division President is the responsible party for managing the DocuSign process and sending the fully signed-off BVM to the Region President for aggregation of any BVMs for the month and submittal to the AMC group, National President, and the CFO no later than the 15th of each month. A What was the primary/original cause of the budget variance? A When (month & year) was the budget variance identified?

1. Divisional Land Development 2.Finance (Division and/or Region) 3. Division President 4.National Land Development (CC: Land Shared Services) 5.Region President

23 | Land Development Budget | LAND DEVELOPMENT PLAYBOOK

LAND DEVELOPMENT PLAYBOOK | Land Development Budget | 24

CHANGE ORDERS Change orders are modifications to a contract arising from a change in scope. These are used in LD to either add or remove scope of work from a contract instead of creating a new contract with an existing vendor. A Obtain a rough order of magnitude estimate of cost or a detailed bid to propose a budget revision and follow up with a formal change order request to create a Purchase Order (PO). Request a budget revision in LD2 monthly budget meetings by providing a rough order of magnitude estimate or detailed bid to support a budget increase before the work is performed. When an Exception exceeds $100k, it is important to inform NLD about it. A Enforce contracted scopes of work and review the budget before proposing a budget increase due to a change order. All change orders require confirmation of a necessary change to the contracted scope of work, a quantity of material related to that scope change, and the associated unit price. A plan revision can require a change order but should be at the contracted unit pricing for that cost category. MULTIPLE PHASE COMMUNITIES A Multi-phase developments must have segregated schedules and budgets for each phase, and future phases must be updated regularly; at least semi-annually or when a current phase is bid. Current bid data is to be used in updating future phase unit prices with existing or updated quantities. Common budgets should be updated concurrently with each phase budget. A If actual or estimated costs exceed the budget in either current or future phases, the division must update the LD Budget in all phases..

CONTINGENCY There are contingencies in every LD project to compensate for risk and uncertainty inherent in Land Development. Every project will have a different amount of contingency depending on its risk profile and stage of development. When progressing through the LD process (from LOI through design and permitting and into bidding, contracting, and LD start), contingency levels should be evaluated and adjusted based on updated information and risk level. Contingency is based on the status of plans, bid status, and cost to complete, which is a combination of the remaining budget and open POs. Therefore, if a large scope of work such as an amenity is not complete, the remaining budget and/or open PO amounts will dictate the appropriate amount for Contingency. Managing risk during the development of an LD Budget can be done within individual development cost codes or in the contingency cost code. Century’s policy is to place any amount in excess of a contracted budget in contingency. All remaining funds inside cost codes will be moved to contingency during the management of an active LD Budget (after a contract is executed), leaving no contingency in the cost codes. Moving excess funds from individual line items could result in a contingency amount above required thresholds. It is the division’s duty to validate the level of contingency based on the stage of development. A Twenty percent (20%) – Projects or Cost Categories at the conceptual phase with preliminary designs and/or due diligence plans (any complete project plan set that has not received official municipal comments from the first full submittal review). A Fifteen percent (15%) – Projects or Cost Categories with plan sets that have received the first set of municipal comments and final permit plan set approval. A Ten percent (10%) – Projects or Cost Categories with approved plan sets that have been bid out and work awarded (contract signed by both parties with a Notice to Proceed issued). A Projects that are fully contracted and paved are allowed to have less than 10% contingency with approval from NLD and the Regional President and require discussion and approval as a part of the LD2 budget process. A Any remaining contingency level is typically held to address all Land Development close-out items and should be based on the project municipality, surety conditions, and other project-specific criteria. A Upon completing paving, transfer all remaining unused budget to contingency and update the bond release budget for completing any anticipated punch list work to achieve acceptance. A Although complete subdivision plan sets (including environmental, earthwork, wet utilities, and paving scopes) are usually finished before LD begins, other project plan sets (dry utilities, landscape, and amenity plans) that would be completed later may require a higher level of contingency. The following levels of contingency will be held at the associated project milestones:

Best Practice: Verify and update all reimbursement estimates no less than semi-annually.

25 | Land Development Budget | LAND DEVELOPMENT PLAYBOOK

LAND DEVELOPMENT PLAYBOOK | Land Development Budget | 26

KEY TAKEAWAYS

Q & A

A What are Budget Variance Memos (BVM’s) and why are they important?

A Budget Variance Memos (BVM’s) are required if current or future phases have greater than a net $100K increase from the last approved budget. A Budget reallocations from Contingency up to development line items require NLD/LSS approval when greater than $100K and a Budget Variance Memo if greater than $250K. A Remaining funds in each cost code should be transferred to contingency after each scope of work has been fully contracted. A If there is an LD Budget variance requiring a memo, create a draft BVM in advance of the LD2 budget meeting. A Distribute the updated LD2 Sheet and draft BVM to the LD2 budget meeting group prior to the start of the meeting. A Finance is responsible for validating all LD Budget information and supporting financial tables for accuracy. A The division must continue to review LD Budgets on all closed-out communities until all bonds/ sureties have been returned to Century and HOA has signed off on all work. A Enforce contracted scopes of work and review the budget before proposing a budget increase due to a change order. A All remaining funds inside cost codes will be moved to contingency during the management of an active LD Budget (after a contract is executed), leaving no contingency in the cost codes. A Other project plan sets (dry utilities, landscape, and amenity plans) would be completed later may require a higher level of contingency.

A Until all bonds/sureties have been returned to Century and the HOA has signed off on all work, the divisions must continue to carry out what task?

A Where must all remaining funds inside cost codes be moved to?

27 | Land Development Budget | LAND DEVELOPMENT PLAYBOOK

LAND DEVELOPMENT PLAYBOOK | Land Development Budget | 28

BIDDING AND CONTRACTING

Bidding and subsequent contracting moves the project from conceptual development (scheduling and budgeting) to active Land Development and enters us into a binding agreement with our selected Trade Partners.

LAND DEVELOPMENT PLAYBOOK | Bidding and Contracting | 30

BID PROCESS The competitive bid process is an essential component of all projects and is critical to ensuring Century is receiving a high-quality work product, delivered on time and for the lowest possible cost. The bid process traditionally focuses on construction and development scopes of work but also relates to consulting services. The scope codes and schedule tasks, both as previously defined, are communicated from the division project team to prospective bidders, and the information collected from the bidding process is utilized to update these same schedule and budget items. The bidding process is also an opportunity to continuously collect data on current market pricing and interact with existing and prospective vendors/contractors. The division must generate and include bid sheets within the bid documents. All bids must be returned and received in the same format for clear, accurate, and apples-to-apples bid comparisons. If divisions do not have a system for bidding, please reach out to NLD for their comprehensive cost management system and training. A complete electronic bid package is to be provided to all bidders, which includes the following: A Invitation to Bid (ITB) narrative describing the project and expectations for bidders. A Scopes of work that enable bidders to thoroughly understand the bid requirements and associated contractual obligations. Sample scopes are in the National Land Development Files in Share Point. A Preliminary schedule with a request for contractor task durations. A Soils Report. A Phase 1 Environmental Site Assessment. A Grading Plans/Improvement Plans/Landscape Plans/Construction Drawings specifically noting the date of plans and approval status. A Bid Doc file including all project docs and construction documents, not just the bid scope plan set. This ensures all Trade Partners have been provided with the opportunity to identify conflicts at bid and avoids future change order requests. A Applicable Pricing Agreement template so a new bidder sees the contract language at bid. A Invitation to Bid (ITB) will be sent to at least 3 different qualified bidders for every scope of work (5 preferred when available). o Multiple bidders are required to ensure competitive qualified bids in addition to providing secondary options if a winning bid cannot contract or perform the scope of work. Expanding the stable of vendors/contractors helps lower LD costs, decrease LD Schedule timelines and allows divisions to build relationships if continued division project growth and workload require additional support. INVITATION TO BID

A A complete list of qualified bidders should be maintained and documented by the division, which will allow for data aggregation over time for contractor/vendor engagement and performance. A Any exceptions to bidding policy must be approved by NLD and documented within the AMC closing/LD Start memo(s). A Engage all bidders in the MSA and Build Pro payment process prior to bidding. Any bidders not previously set up as an approved vendor should receive the MSA within their bid documents to identify contract issues prior to accepting the bid.

BID PACKAGE RECEIPT

Bid package receipt starts when receiving complete bid packages from solicited vendors/contractors by the requested date. The division team should acknowledge receipt from the vendor/contractor and save the submitted packages in the project folder. It is important to retain the integrity of the bid document files, both what was sent out and received for documentation and support in a potential future contract dispute or challenging change order requests.

Returned bids should include (as requested in the Invitation to Bid package) the following required items:

A Contractor task durations for each scope of work. A Completed bid sheet for each scope of work. A Bid document acknowledgment form.

BID SPREAD PROCESS

Bid spread is the evaluation and comparison of the quantities, unit prices, total costs, and duration for a scope of work. It is possible to evaluate bids in several ways. General Contractor, turnkey, and piecemeal (individual detailed bidding) are all acceptable, but work to get as much quantity and unit price data per cost code/category as possible. The NLD cost management system can provide a standardized process to award work through a comprehensive bid spread analysis when the division does not have a bid comparison process. An important and often overlooked aspect of the bid spread process is comparison to budget and challenging bidders on their quantities and unit prices.

IMPORTANT: We do not increase the budget because the low bid was higher than our budget without challenging the trade partner and/or supplier.

31 | Bidding and Contracting | LAND DEVELOPMENT PLAYBOOK

LAND DEVELOPMENT PLAYBOOK | Bidding and Contracting | 32

BID AWARD PROCESS

PAYMENTS AND INVOICES

The bid award process starts when all bid packages have been received, spread, and saved in appropriate project folders. This step is critical to the success of an LD project, and constant communication should be kept with vendors during the bid evaluation and award process. A Contracts are awarded to the most competitive bid considering unit costs, quantities, duration of tasks, and scope of work completeness. The division team should review these items and evaluate the variables and how collectively they impact project performance and the overall division business plan. Once all bids have been reviewed and evaluated, select a winning bidder, notify them of the award, and initiate the contracting process (subject to an approved AMC LD start memo or similar approval). A Contact the runner-up bidders and notify them of their non-award along with feedback on their respective bids. This is an essential component of the process that builds trust with vendors/ contractors and provides insight on where bids were deficient (unit costs/pricing, scope of services, task schedules, MSA term comments, or other variables) and how bidders can successfully win work in the future. Maintaining a large stable of contractors for every scope of work is critical to fostering a competitive bidding environment, which helps control and improve LD costs and schedules. The contract is the key document that governs our business relationship with our LD Trade Partners. History, relationships, statements, and conversations have no legal weight in the event there is a disagreement with one of our Trade Partners. Our rights, and those of our Trade Partners, are solely governed by the contract terms of our Master Service Agreement (MSA) and Master Consulting Agreement (MCA). Any proposed revisions/redlines by the vendor to our MSA, MCA, or pricing agreements are to be reviewed by our Century legal team. The contract process includes the following requirements: 1. General Conditions for each scope of work will be inserted in every contract. 2. A detailed scope of work specific to the project will be created by the division, not the contractor. In standard practice, these items originate in the invitation to bid process as discussed above. The scope of work within the Pricing Agreement governs in a contract dispute. 3. The use of contractors’ proposals and/or bid inclusions and exclusions is not considered a contract scope of work and shall not be placed within a contract. (This applies to scope of work items, qualifications, exclusions, and legal terms, it does not include the proposed schedule). 4. Contracts will include an exhibit of a preliminary schedule with bid task durations used to update project schedule upon award. Every division must manage all contracts, POs, change orders, cost management, data entry, and tracking.

All subcontractors and consultants are required to be managed through BuildPro to facilitate payment based on an LD managed schedule. POs should be created when services are contracted, not when the vendor submits for payment. NLD will review contracts over $15M to confirm the scope of work is complete and compare the contract to the original budget. NLD verification is managed through ServiceNow for PO approval.

A The following is a list of vendors who do not require a PO to facilitate payment: o Legal invoices to law firms o Governmental entities for permits, fees, property taxes, etc. o HOA and Metro Districts

o Utility providers o Title companies o Trace Air A For all check requests submitted to Accounts Payable, please attach a current ECC report so AP can verify the request is within budget.

IMPORTANT: POs over $25,000 must be submitted to LSS for budget review and approval. If a PO is over budget on any given line item, submit an interim budget revision to LSS correct any budget overages.

33 | Bidding and Contracting | LAND DEVELOPMENT PLAYBOOK

LAND DEVELOPMENT PLAYBOOK | Bidding and Contracting | 34

KEY TAKEAWAYS

Q & A

A What process is an essential component of all projects and is critical to ensuring Century is receiving a high-quality work product?

A The competitive bid process is an essential component of all projects and is critical to ensuring Century is receiving a high-quality work product, delivered on time and for the lowest possible cost. A The division must generate and include bid sheets within the bid documents. All bids must be returned and received in the same format for clear, accurate, and apples-to-apples bid comparisons. A Invitation to Bid (ITB) will be sent to at least 3 different qualified bidders for every scope of work (5 preferred when available). A Any exceptions to bidding policy must be approved by NLD and documented within the AMC closing/LD Start memo(s). A An important and often overlooked aspect of the bid spread process is comparison to budget and challenging bidders on their quantities and unit prices. A Contracts are awarded to the most competitive bid considering unit costs, quantities, duration of tasks, and scope of work completeness. A The use of contractors’ proposals and/or bid inclusions and exclusions is not considered a contract scope of work and shall not be placed within a contract.

A How many qualified bidders will receive an Invitation to Bid (ITB)?

A What process is an important and often overlooked aspect of the bid spread process?

35 | Bidding and Contracting | LAND DEVELOPMENT PLAYBOOK

LAND DEVELOPMENT PLAYBOOK | Bidding and Contracting | 36

FINISHED LOT DELIVERY

Each Century LD team goal is to deliver consistent, high-quality finished lots on time and at (or under) budget, whether they are self-developed, finished lots, or semi-finished lot purchases. Lot standards are an essential component of our home’s layout, drainage, and public utility services. Consistent and high-quality lot standards also mitigate the risk of drainage issues, utility conflicts, and warranty/back charge claims for both construction teams and homeowners. Century lot standards can be found in the NLD library.

LOT STANDARDS

Although some lot standards have been set and standardized for the entire company, other select standards may vary by region and be customized as necessary for specific project needs. Lot standards will vary based on product type (slab, crawlspace, or basement) as well as community layout, drainage, and grading. A The design engineer shall utilize lot standards to create a lot fit plan that includes site and pad grading. This plan will be included in construction documents and finished lot delivery requirements. o Each lot should have a pad and finished floor elevation (the delta between the two is based on a documented foundation design). A If there are any splits in elevation (garages, basements, porches, stairs, or patios), all segmented areas should be clearly called out. A Each lot should be designated to consider lot drainage requirements related to slopes from the building pad to each property line. A Driveway locations should be included for the intended product with the maximum allowed slope of 10%. A Include the lot fit plan in the construction document package. A Earthwork/dirt management design and construction of pad grading: o Building pads are to be designed and overbuilt by a minimum of 5’ and flat graded to accommodate for building spoils by use of one or more of the following: 1) Front yard undercut. 2) Rear yard undercut. 3) Basement undercut. 4) Last production lots should be left low to receive building spoils. o Dirt balance should be determined with input from construction during mass grading, not as an import/export activity during home construction. A During utility design, consolidate services and laterals to the lots for efficiency on shared Property Lines (PL).

37 | Bidding and Contracting | LAND DEVELOPMENT PLAYBOOK

LAND DEVELOPMENT PLAYBOOK | Finished Lot Delivery | 38

o Design and install dry utilities (power, gas, & communications) on the garage side of the lot. All homes are to be plotted garage-to-garage, when possible, to allow for utility stubs to be at every other property line rather than every PL, reducing the number of service stubs. This approach adds efficiencies in trenching and installation as well as consolidating equipment above ground. o Design and install water meters on the opposite PL from dry utility stubs to avoid conflicts and a single trench for two lots. This will allow for a single trench to home both water services (when allowable by the district) again minimizing the scope of work and adding efficiency. o Design and install sewer services 10’ from water or center of lot if driveways allow. Avoid planned drive locations, as some jurisdictions do not allow cleanouts in the driveway. Health and safety regulations vary from 5’ to 10’ separation between water and sewer. Standardizing at 10’ separation allows for consistency in the field when locating buried services. o Whenever possible, design and install sewer laterals with above-ground risers to identify the lateral and allow for the plumber to tie into that riser at the proper depth without digging to the depth of the lateral itself. Basements do not apply to this practice, but services are to be clearly marked to avoid damage during basement excavation. Base lot standards are to be included as an exhibit in every lot contract and should be initiated as an attachment starting with the LOI process. As the design progresses in project plan development, lot standards are referenced by the design team. Use NLD’s CAD Lot standards on plan sheets to allow for the insertion of typical lot details in every grading plan set to ensure conformance to standards at the time of design. The design and permitting process, along with unique site conditions, may create exceptions on certain lots, which should be reviewed and documented by a Land Development Professional on the project team (with inter-divisional coordination as needed). As home construction on finished lots occurs after mass grading has been completed, the volume of dirt needed on a lot-by-lot basis needs to be managed to minimize vertical coordination of earthwork site vendors, as this leads to higher dirt costs, additional roadway and curb damage, and an increase in erosion control risk.

CONSTRUCTION TURNOVER

A When delivering Finished Lots (as designed in the required lot-fit plan) to our homebuilding teams, LD and vertical construction teams are to walk the project site to confirm all improvements are completed and establish a written punch list for any incomplete items. A The LD team will complete the punch list, and vertical construction will confirm the punch list has been completed before accepting ownership of the site. This process establishes the transfer of responsibility for operating and maintaining the project site, including, but not limited to, site cleanliness, material storage, security, SWPPP, damage, and replacement of all existing improvements, etc. A If a Third-Party Developer is unable or unwilling to meet Century’s definition of a Finished Lot, then our internal LD teams need to address that work before the community is turned over to our vertical construction team.

IMPORTANT: Whether we are self-developing our own lots or purchasing “Finished Lots” from a Third-Party developer, our lot standards and/or the condition that we deliver lots to our vertical construction teams will be the same. The same can be said for public utilities that we turn over to the municipalities and the amenities that we turn over to the HOA.

39 | Finished Lot Delivery | LAND DEVELOPMENT PLAYBOOK

LAND DEVELOPMENT PLAYBOOK | Finished Lot Delivery | 40