Land Development Playbook

KEY TAKEAWAYS

SURETY EXONERATION Improvement bonds (sureties) are the financial instruments securing our agreements with municipalities and backstopping our financial commitment for required improvements. Upon completion of the underlying improvements, the LD team must diligently pursue the process of turnover and exoneration of these bonds. Bonds have a significant fiscal impact on Century in the form of premiums and capacity limits, and the ability to issue new bonds is necessary to support Century’s future growth.

A Sureties represent financial obligations to Century and carry budget obligations to maintain. A Proactively managing surety release and minimizing outstanding items frees up cash flow for other priority Century opportunities. A The more Century grows, the larger the surety requirements and outstanding risk. A Sureties are typically managed by municipalities and require constant proactive communication to track and release.

TRACT ACCEPTANCE & BOND RELEASE

A Project closeout is the period defined after homebuilding starts prior to last home closing. A Post-close is defined as after the final home closing. A Bond reduction is to be requested from the jurisdiction as soon as possible to reduce the carry cost of bonds. A Schedule final walks for the community before the last home closes A Complete any punch list within 8 weeks of receipt and be on the agenda for acceptance/release. A Divisions to submit a bond report demonstrating progress to NLD monthly. A Release warranty bond as soon as the municipality allows. This typically is at 1 year (and can be 2-3 years in some states) from issuance. A Actively manage the warranty bond during the warranty period and do not wait for the year to be up to walk. A Maintain the corporate bond tracker and update the Finance team monthly on the status of and anticipated release schedule of all sureties.

BOND MANAGEMENT

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