Company: UHG
Filing Date: 2025-03-14
Form Type: 10-K
Source: 0001830188-25-000012
Chunk: 27

Company: United Homes Group, Inc.
Filing Date: 2025-03-14
Form: 10-K
Item: Item 1A
Chunk 27
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HG could lose some or all of any deposits, fees, or investments paid or made in respect of such arrangements, including any cost overruns, which could adversely impact UHG’s profitability, ability to service its debt obligations, and future cash flows. UHG does not typically receive a return of its deposit upon expiration or termination of the contract unless it is due to seller default or a force majeure event. The forfeiture of land contract deposits or inventory impairments may result in a loss that could have a material adverse effect on UHG’s profitability, ability to service its debt obligations, and future cash flows.

If the property meets UHG’s development requirements and successfully exits the initial inspection and due diligence period, the deposit becomes non-refundable (except for certain circumstances such as seller default and force majeure events), and UHG proceeds under the finished lot option contract with the lots available to it for purchase on a staggered takedown schedule, which is designed to mirror UHG’s expected home orders. UHG’s options to purchase lots typically expire at the end of each purchase date as set forth in the staggered takedown schedule of the applicable option contract. If, ultimately, UHG does not exercise its option to purchase, the seller then would have the option to terminate the agreement, which would then result in the loss of the option to purchase all remaining unpurchased lots and forfeiture of the remaining deposit for the unpurchased lots. UHG does not typically receive a return of its deposit upon expiration or termination of the contract unless it is due to seller default or a force majeure event. The forfeiture of land contract deposits or inventory impairments may result in a loss that could have a material adverse effect on UHG’s profitability, stock performance, ability to service its debt obligations, and future cash flows.

If UHG is unable to develop its communities successfully or within expected time frames, UHG’s results of operations could be adversely affected.

Although UHG’s preference is to acquire finished lots, from time to time, UHG may also acquire property that requires further development before it can begin building homes. When a community requires additional developments, UHG devotes substantial time and capital in order to obtain development approvals, acquire land and construct significant portions of project infrastructure and amenities before the community generates any revenue. In addition, UHG’s land bank option contracts often include provisions under which delays in land development and/or longer land takedown periods cause UHG to incur additional cost. It can take several years from the time UHG ac