We are involved in various claims and litigation arising principally in the ordinary course of business. We believe that adequate provision for resolution of all current claims and pending litigation has been made and that the disposition of these matters will not have a material adverse effect on our results of operations and liquidity or on our financial condition.

In March 2018, the Pennsylvania Attorney General informed the Company that it was conducting a review of our construction of stucco homes in Pennsylvania after January 1, 2005 and requested that we voluntarily produce documents and information. The Company has produced documents and information in response to this request and, in addition, has produced requested information and documents in response to a subpoena issued in the second quarter of fiscal 2019. Management cannot at this time predict the eventual scope or outcome of this matter.

Generally, our agreements to acquire land parcels do not require us to purchase those land parcels, although we, in some cases, forfeit any deposit balance outstanding if and when we terminate an agreement. Information regarding our land purchase commitments, as of the dates indicated, is provided in the table below (amounts in thousands):


	July 31, 2020		October 31, 2019
Aggregate purchase commitments:
Unrelated parties	$	2,635,746	$	2,349,900
Unconsolidated entities that the Company has investments in	5,232		10,826
Total	$	2,640,978	$	2,360,726

Deposits against aggregate purchase commitments	$	185,050	$	168,778

Additional cash required to acquire land	2,455,928		2,191,948
Total	$	2,640,978	$	2,360,726
Amount of additional cash required to acquire land included in accrued expenses	$	16,044	$	14,620

In addition, we expect to purchase approximately 2,200 additional home sites over a number of years from several joint ventures in which we have interests; the purchase prices of these home sites will be determined at a future date.

At July 31, 2020, we also had similar purchase commitments to acquire land for apartment developments of approximately $109.4 million, of which we had outstanding deposits in the amount of $6.2 million. We intend to develop these projects in joint ventures with unrelated parties in the future.

We have additional land parcels under option that have been excluded from the aggregate purchase commitments since we do not believe that we will complete the purchase of these land parcels and no additional funds will be required from us to terminate these contracts.

At July 31, 2020, we had investments in a number of unconsolidated entities, were committed to invest or advance additional funds, and had guaranteed a portion of the indebtedness and/or loan commitments of these entities. See Note 4, “Investments in Unconsolidated Entities,” for more information regarding our commitments to these entities.

At July 31, 2020, we had outstanding surety bonds amounting to $795.0 million, primarily related to our obligations to governmental entities to construct improvements in our communities. We estimate that approximately $386.1 million of work remains on these improvements. We have an additional $178.9 million of surety bonds outstanding that guarantee other obligations. We do not believe that it is probable that any outstanding bonds will be drawn upon.

At July 31, 2020, we had outstanding letters of credit of $129.3 million under our Revolving Credit Facility. These letters of credit were issued to secure various financial obligations, including insurance policy deductibles and other claims, land deposits, and security to complete improvements in communities in which we are operating. We do not believe that it is probable that any outstanding letters of credit will be drawn upon.


	July 31, 2020		October 31, 2019
Aggregate mortgage loan commitments:
IRLCs	$	655,587	$	565,634
Non-IRLCs	1,728,639		1,364,972
Total	$	2,384,226	$	1,930,606
Investor commitments to purchase:
IRLCs	$	655,587	$	565,634
Mortgage loans held for sale	151,454		208,591
Total	$	807,041	$	774,225

We lease certain facilities, equipment, and properties held for rental apartment operation or development under non-cancelable operating leases which, in the case of certain rental properties, have an initial term of 99 years. We recognize lease expense for these leases on a straight-line basis over the lease term. ROU assets and lease liabilities are recorded on the balance sheet for all leases with an expected term over one year. A majority of our facility lease agreements include rental payments based on a pro-rata share of the lessor’s operating costs which are variable in nature. Our lease agreements do not contain any residual value guarantees or material restrictive covenants.

ROU assets are classified within “Receivables, prepaid expenses, and other assets” and the corresponding lease liability is included in “Accrued expenses” in our Condensed Consolidated Balance Sheet. Leases with an initial term of 12 months or less are not recorded on the balance sheet. At July 31, 2020, ROU assets and lease liabilities were $106.0 million and $125.2 million, respectively. Payments on lease liabilities during the nine months and three months ended July 31, 2020 totaled $12.3 million and $4.2 million, respectively.

Lease expense includes costs for leases with terms in excess of one year as well as short-term leases with terms of one year or less. For the nine months and three months ended July 31, 2020, our total lease expense was $18.9 million and $6.1 million, respectively, inclusive of variable lease costs of approximately $2.2 million and $0.7 million, respectively, and short-term lease costs of approximately $3.0 million and $1.0 million, respectively. Sublease income was de minimis.


Year ended July 31, 2020
2020 (a)	$	4,231
2021	19,306
2022	17,446
2023	15,027
2024	12,474
Thereafter	213,702
Total lease payments (b)	282,186
Less: Interest (c)	156,955
Present value of lease liabilities	$	125,231

(c) Our leases do not provide a readily determinable implicit rate. Therefore, we must estimate our discount rate for such leases to determine the present value of lease payments at the lease commencement date.

The majority of our facility leases give us the option to extend the lease term. The exercise of lease renewal options is at our discretion. For several of our facility leases we are reasonably certain the option will be exercised and thus the renewal term has been included in our calculation of the ROU asset and lease liability. The weighted average remaining lease term and weighted

average discount rate used in calculating these facility lease liabilities, excluding our land leases, were 9.0 years and 4.1%, respectively, at July 31, 2020.

We have a small number of land leases with initial terms of 99 years. We are not reasonably certain that, if given the option, we would extend these leases. We have therefore excluded the renewal terms from our ROU asset and lease liability for these leases. The weighted average remaining lease term and weighted average discount rate used in calculating these land lease liabilities were 94.1 years and 4.5%, respectively, at July 31, 2020.