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Variable Interest Entities ("VIEs") | 3 Months Ended
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Mar. 31, 2024
Variable Interest Entity, Reporting Entity Involvement, Maximum Loss Exposure [Abstract] |
Variable Interest Entities ("VIEs") | Variable Interest Entities ("VIEs") Fixed Price Finished Lot Purchase Agreements (“LPAs”) We generally do not engage in the land development business. Instead, we typically acquire finished building lots at market prices from various development entities under LPAs. The LPAs require deposits that may be forfeited if we fail to perform under the LPAs. The deposits required under the LPAs are in the form of cash or letters of credit in varying amounts, and typically range up to 10% of the aggregate purchase price of the finished lots. The deposit placed by us pursuant to the LPA is deemed to be a variable interest in the respective development entities. Those development entities are deemed to be VIEs. Therefore, the development entities with which we enter into LPAs, including the joint venture limited liability corporations discussed below, are evaluated for possible consolidation by us. We have concluded that we are not the primary beneficiary of the development entities with which we enter into LPAs, and therefore, we do not consolidate any of these VIEs. As of March 31, 2024, we controlled approximately 135,800 lots under LPAs with third parties through deposits in cash and letters of credit totaling approximately $641,300 and $10,000, respectively. Our sole legal obligation and economic loss for failure to perform under these LPAs is limited to the amount of the deposit pursuant to the liquidated damage provisions contained in the LPAs and, in very limited circumstances, specific performance obligations. For the three months ended March 31, 2024 and 2023, we recorded a net expense reversal of approximately $7,500 and $3,100, respectively, primarily related to previously impaired lot deposits based on market conditions. Our contract land deposit asset is shown net of a $45,932 and $53,397 impairment reserve as of March 31, 2024 and December 31, 2023, respectively. In addition, we have certain properties under contract with land owners that are expected to yield approximately 22,400 lots, which are not included in the number of total lots controlled. Some of these properties may require rezoning or other approvals to achieve the expected yield. These properties are controlled with cash deposits totaling approximately $14,100 as of March 31, 2024, of which approximately $3,300 is refundable if certain contractual conditions are not met. We generally expect to assign the raw land contracts to a land developer and simultaneously enter into an LPA with the assignee if the project is determined to be feasible. Our total risk of loss related to contract land deposits is limited to the amount of the deposits pursuant to the liquidated damages provision of the LPAs. As of March 31, 2024 and December 31, 2023, our total risk of loss was as follows:
|  | March 31, 2024 |  | December 31, 2023
Contract land deposits |  | $ | 655,339 |  |  | $ | 629,948 |
Loss reserve on contract land deposits |  | (45,932) |  |  | (53,397) |
Contract land deposits, net |  | 609,407 |  |  | 576,551 |
Contingent obligations in the form of letters of credit |  | 9,993 |  |  | 7,769 |
Total risk of loss |  | $ | 619,400 |  |  | $ | 584,320 |

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- Definition The entire disclosure for a variable interest entity (VIE), including but not limited to, judgments and assumptions in determining whether to consolidate and in identifying the primary beneficiary, gain (loss) recognized on the initial consolidation of the VIE, terms of arrangements, amounts and classification of the VIE's assets and liabilities, and the entity's maximum exposure to loss. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 810 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//810/tableOfContent + Details
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- References No definition available. + Details
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