Warranty Reserve

6 Months Ended

Jun. 30, 2014

3. WARRANTY RESERVE

Warranty reserves for units settled are established to cover potential costs for materials and labor with regard to warranty-type claims expected to arise during the typical one-year warranty period provided by the Company or within the two-year statutorily mandated structural warranty period for condominiums. The warranty reserve is established at the time of closing, and is calculated based upon historical warranty cost experience and current business factors. This reserve is an estimate and actual warranty costs could vary from these estimates. Variables used in the calculation of the reserve, as well as the adequacy of the reserve based on the number of homes still under warranty, are reviewed on a periodic basis. Warranty claims are directly charged to the reserve as they arise.

The following table is a summary of warranty reserve activity which is included in accounts payable and accrued liabilities:


	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2014			2013			2014			2013
Balance at beginning of period	$	514		$	984		$	510		$	963
Additions		306			44			344			84
Releases and/or charges incurred		(98	)		(16	)		(132	)		(35	)

Balance at end of period	$	722		$	1,012		$	722		$	1,012