New Home Warranty

Georgia

TABLE OF CONTENTS
I. II. A. B. C. D. III. A. B. C. D. IV. A. B. C. D. INTRODUCTION .................................................................................................. 1 ONE YEAR WARRANTY ..................................................................................... 1 COVERAGE ........................................................................................................... 1 REQUESTING WARRANTY SERVICE.............................................................. 1 LIMITATION OF LIABILITY .............................................................................. 1 DISPUTE SETTLEMENT PROCEDURES .......................................................... 2 TWO YEAR WARRANTY .................................................................................... 3 COVERAGE ........................................................................................................... 3 REQUESTING WARRANTY SERVICE.............................................................. 3 LIMITATION OF LIABILITY .............................................................................. 4 DISPUTE SETTLEMENT PROCEDURES .......................................................... 4 TEN YEAR EXPRESS LIMITED WARRANTY BY BONDED BUILDERS ...... 4 COVERAGE. .......................................................................................................... 4 REQUESTING WARRANTY SERVICE.............................................................. 5 LIMITATION OF LIABILITY .............................................................................. 5 DISPUTE SETTLEMENT PROCEDURES .......................................................... 5

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I.

INTRODUCTION

The Maronda Homes Limited Warranty Agreement ("THE WARRANTY") consists of the following provisions and documents which these provisions incorporate by reference. II. A. COVERAGE ONE YEAR WARRANTY

MARONDA HOMES, INC. OF GEORGIA ("MARONDA") warrants that the covered home will be free from defects in workmanship and materials for one year after the date of closing on the covered home pursuant to the terms and conditions of the WORKMANSHIP, MATERIALS AND SYSTEMS WARRANTY, BB-W1110WK ("BB-W1110WK"), issued by BONDED BUILDERS WARRANTY GROUP ("BONDED BUILDERS"), subject to the terms, provisions and exclusions of coverage outlined in the GENERAL WARRANTY PROVISIONS, ("BB-W1110GP"). A copy of BB-W1110WK and BB-W1110GP are attached hereto as Exhibit A and are hereby incorporated herein. For purposes of THE WARRANTY, a "defect" is defined as any failure to meet the applicable standards set forth in the current edition of the Residential Construction Performance Guidelines as published by the National Association of Home Builders ("GUIDELINES"), which GUIDELINES are incorporated herein. If MARONDA determines there is a defect on a covered item, MARONDA, subject to the terms and conditions of BB-W1110WK, will repair or replace the item, or will pay THE HOMEOWNER the reasonable cost of repair or replacement of any covered defect. Except with regard to the definition of "defect" as set forth above, in the event of any inconsistency between the terms of this paragraph and BB-W1110WK, the terms of BB-W1110WK, or any later versions thereof, shall control. B. REQUESTING WARRANTY SERVICE

In addition to procedures set forth in BB-W1110WK, MARONDA will provide THE HOMEOWNER with the proper procedure for requesting warranty service in the Homeowner's Guide. However, if THE HOMEOWNER believes that there is a defect in the workmanship or materials of the home, THE HOMEOWNER must first contact MARONDA in writing, Attention: Warranty Department before contacting BONDED BUILDERS. To preserve a claim under THE WARRANTY and BB-W1110WK, THE HOMEOWNER must submit written notice of the claim to MARONDA by certified mail, return receipt requested, at the addresses shown on the Certificate of Coverage within 30 days of discovery of the defect, but no later than 30 days after the applicable warranty period expires. Notwithstanding the foregoing, in the event of discovery of a defect which results in a dangerous or unsafe condition in the home or on the property, or which would result in further damage to the home or property, THE HOMEOWNER must contact the MARONDA Warranty Department immediately upon discovery of that defect. In the event of any inconsistency between the terms of this paragraph and BB-W1110WK, the terms of BB-W1110WK, or any later versions thereof, shall control. C. LIMITATION OF LIABILITY

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IT IS UNDERSTOOD AND AGREED THAT MARONDA'S LIABILITY, WHETHER BY CONTRACT, TORT, STATUTE, EQUITY, OR OTHERWISE, IS LIMITED TO THE REMEDY PROVIDED IN THE WARRANTY. MARONDA'S OBLIGATIONS UNDER THE WARRANTY ARE LIMITED TO REPAIR AND REPLACEMENT. UNDER NO CIRCUMSTANCES SHALL MARONDA BE LIABLE FOR ANY SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGES, INCLUDING WITHOUT LIMITATION ANY DAMAGES BASED ON A CLAIMED DECREASE IN THE VALUE OF THE HOME, EVEN IF MARONDA HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. THE WARRANTY IS THE ONLY WARRANTY APPLICABLE TO THIS PURCHASE. ALL OTHER WARRANTIES, EXPRESSED OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, ALL IMPLIED WARRANTIES OF FITNESS, MERCHANTABILITY OR HABITABILITY, ARE DISCLAIMED AND EXCLUDED. D. DISPUTE SETTLEMENT PROCEDURES 1. RIGHT TO CURE

THE HOMEOWNER must follow the requirements of Georgias Right to Repair Act, O.C.G.A. Section 8-2-35 et seq., before THE HOMEOWNER may seek arbitration of the dispute or, if permitted by applicable law, bring any legal action for an alleged construction defect in the covered home. Except as otherwise set forth in Georgias Right to Repair Act, ninety (90) days before THE HOMEOWNER brings any legal action (including arbitration), THE HOMEOWNER must deliver written notice to MARONDA, stating that said notice is a notice of claim served pursuant to O.C.G.A. 8-2-38, which notice must describe the alleged defects with sufficient detail to explain the nature of the defects and the results of the defects, and which notice must provide MARONDA any evidence that depicts the nature and cause of the construction defect, including expert reports, photographs, and videotapes. After service of such notice of claim, THE HOMEOWNER and MARONDA must comply with the terms and procedures set forth in Georgia's Right to Repair Act. 2. CONCILIATION PROCESS

If THE HOMEOWNER does not accept any offer which may be made by MARONDA in accordance with Georgias Right to Repair Act to repair or pay for alleged construction defects, or if MARONDA does not timely make such an offer, then THE HOMEOWNER, MARONDA, and BONDED BUILDERS agree that any dispute, controversy, claim or matter in question regarding the workmanship and materials warranty as provided in BB-W1110WK, shall be submitted to BONDED BUILDER'S Conciliation Process as outlined in Section G of BB-W1110WK. In the event the dispute cannot be resolved by BONDED BUILDER'S Conciliation Process, the dispute shall be submitted to BONDED BUILDER'S Claim Review Group as discussed in Section G of BB-W1110WK. 3. ARBITRATION

In the event the dispute cannot be resolved after the requirements of D1 and D2 have been satisfied, any and all disputes arising under THE WARRANTY and BB-W1110WK shall be submitted to binding arbitration and not a court for determination by a judge or jury.

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Arbitration shall commence after written notice is given from either party to the other, such arbitration shall be accomplished expeditiously in the county where the covered home is located and shall be conducted in accordance with the rules of the American Arbitration Association ("AAA"). The arbitration shall be conducted by a single arbitrator who is mutually agreed upon by the parties. In the event the parties are unable to agree on an arbitrator, each party shall select an arbitrator from the AAA list, and those two arbitrators shall mutually select an arbitrator to arbitrate the issues between the parties. The arbitrator shall be selected from a list of arbitrators submitted by the AAA and shall have expertise in the homebuilding and construction area of law. Judgment upon the award rendered by the arbitrator may be entered in any court having jurisdiction thereof. Each party shall be responsible for its own legal fees and costs and any other fees incurred in connection with an arbitration proceeding which arises out of or relates in any way to THE WARRANTY and BB-W1110WK. The arbitration panel shall award the arbitrator's fees and costs to the prevailing party in its arbitration judgment. TO THE EXTENT A COURT OF COMPETENT JURISDICTION FINDS THAT ANY CLAIM BETWEEN MARONDA AND THE HOMEOWNER IS NOT SUBJECT TO BINDING ARBITRATION PURSUANT TO THE PROVISIONS OF THIS LIMITED WARRANTY, THEN MARONDA AND THE HOMEOWNER KNOWINGLY WAIVE TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER OF THEM IN CONNECTION WITH THIS AGREEMENT REGARDLESS OF THE FORM OF THE CLAIM(S) MADE OR DAMAGES SOUGHT. THIS WAIVER OF JURY TRIAL WILL EXTEND TO ANY THIRD PARTY NAMED IN ANY PROCEEDINGS BY MARONDA OR THE HOMEOWNER. III. A. COVERAGE TWO YEAR WARRANTY

Pursuant to the terms and conditions of BB-W1110WK, MARONDA warrants that the covered home will be free from defects in the electrical, plumbing, and mechanical systems ("the systems"), subject to the terms, provisions and exclusions of coverage outlined in BB-W1110GP. Defects in the systems mean the failure to meet the applicable provisions of the GUIDELINES. If MARONDA determines there is a defect on a covered item, MARONDA, subject to the terms and conditions of BB-W1110WK, will repair or replace the item, or pay THE HOMEOWNER the reasonable cost of repair or replacement of any covered defect. Appliances, fixtures or pieces of equipment that are covered by a manufacturer's warranty ARE NOT covered by THE WARRANTY or BB-W1110WK. Further, any defects of the systems resulting from failures in an appliance, fixture or piece of equipment covered by a manufacturer's warranty ARE NOT covered by THE WARRANTY or BB-W1110WK. In the event of any inconsistency between the terms of this paragraph and BB-W1110WK, the terms of BB-W1110WK, or any later versions thereof, shall control. B. REQUESTING WARRANTY SERVICE

In addition to procedures set forth in BB-W1110WK, or any later modification thereof, MARONDA will provide THE HOMEOWNER with the proper procedure for requesting warranty service in the Homeowner's Guide. However, If THE HOMEOWNER believes that there is a defect in the workmanship or materials of the home, THE HOMEOWNER must first 3

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contact MARONDA in writing, Attention: Warranty Department before contacting BONDED BUILDERS. To preserve a claim under THE WARRANTY, THE HOMEOWNER must submit written notice of the claim to MARONDA by certified mail, return receipt requested, at the addresses shown on the Certificate of Coverage within 30 days of discovery the defect, but no later than 30 days after the applicable warranty period expires. Notwithstanding the foregoing, in the event of discovery of a defect which results in a dangerous or unsafe condition in the home or on the property, or which would result in further damage to the home or property, THE HOMEOWNER must contact the MARONDA Warranty Department immediately upon discovery of that defect. In the event of any inconsistency between the terms of this paragraph and BB-W1110WK, the terms of BB-W1110WK, or any later versions thereof, shall control. C. LIMITATION OF LIABILITY

IT IS UNDERSTOOD AND AGREED THAT MARONDA'S LIABILITY, WHETHER BY CONTRACT, TORT, STATUTE, EQUITY, OR OTHERWISE, IS LIMITED TO THE REMEDY PROVIDED IN THE WARRANTY. MARONDA'S OBLIGATIONS UNDER THE WARRANTY ARE LIMITED TO REPAIR AND REPLACEMENT. UNDER NO CIRCUMSTANCES SHALL MARONDA BE LIABLE FOR ANY SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGES, INCLUDING WITHOUT LIMITATION ANY DAMAGES BASED ON A CLAIMED DECREASE IN THE VALUE OF THE HOME, EVEN IF MARONDA HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. THE WARRANTY IS THE ONLY WARRANTY APPLICABLE TO THIS PURCHASE. ALL OTHER WARRANTIES, EXPRESSED OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, ALL IMPLIED WARRANTIES OF FITNESS, MERCHANTABILITY OR HABITABILITY, ARE DISCLAIMED AND EXCLUDED. D. DISPUTE SETTLEMENT PROCEDURES

Any dispute arising out of a defect in the electrical, plumbing, and mechanical systems pursuant to the terms and conditions of BB-W1110WK, or any later versions thereof, must be resolved under the same dispute Settlement Procedures as outlined under Section D of the One Year Warranty. IV. A. TEN YEAR EXPRESS LIMITED WARRANTY BY BONDED BUILDERS COVERAGE.

Pursuant to the terms and conditions of the EXPRESS LIMITED MAJOR STRUCTURAL DEFECT WARRANTY ("BB-W1110ST"), BONDED BUILDERS warrants that the covered home will be free from major structural defects for ten years after the date of closing, subject to the terms, provisions and exclusions of coverage outlined in BB-W1110GP. As discussed in BB-W1110ST, a "major structural defect" is actual physical damage to the designated load-bearing portions of the covered home caused by failure of such load-bearing portions that affects their load-bearing functions and to the extent that the covered home becomes unsafe, unsanitary, or otherwise uninhabitable. A copy of BB-W1110ST is attached hereto as Exhibit A and incorporated herein. If BONDED BUILDERS determines there is a defect on a covered item, BONDED BUILDERS, subject to the terms and conditions of 4

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BB-W1110ST, will repair or replace the item, or pay THE HOMEOWNER the reasonable cost of repair or replacement of any covered defect. In the event of any inconsistency between the terms of this paragraph and BB-W1110ST, the terms of BB-W1110ST, or any later versions thereof, shall control. Notwithstanding anything to the contrary set forth above in this paragraph, if a "major structural defect" is defined differently under the GUIDELINES than under BB-W1110ST, then the definition of "major structural defect" for purpose of this paragraph shall be as set forth or required under or by the GUIDELINES. B. REQUESTING WARRANTY SERVICE

If THE HOMEOWNER believes that there is a major structural defect in the home, THE HOMEOWNER must completely fill out and transmit to BONDED BUILDERS the BONDED BUILDERS Structural Claim Form and comply with all terms and conditions of Section E of BB-W1110ST. In addition, THE HOMEOWNER shall contact MARONDA in writing, Attention: Warranty Department. To preserve a claim under THE WARRANTY, THE HOMEOWNER must submit written notice of the claim to BONDED BUILDERS AND MARONDA as soon as detecting the major structural defect, but no later than 30 days after the applicable warranty period expires. Notwithstanding the foregoing, in the event of discovery of a defect which results in a dangerous or unsafe condition in the home or on the property, or which would result in further damage to the home or property, THE HOMEOWNER must contact the MARONDA Warranty Department immediately upon discovery of that defect. In the event of any inconsistency between the terms of this paragraph and BB-W1110ST, the terms of BB-W1110ST, or any later versions thereof, shall control. C. LIMITATION OF LIABILITY

NOTWITHSTANDING THE FOREGOING, MARONDA DOES NOT PROVIDE ANY WARRANTY FOR MAJOR STRUCTURAL DEFECTS AS DISCUSSED IN SECTION IV OF THE WARRANTY. ALL WARRANTIES PROVIDED IN SECTION IV OF THE WARRANTY, WHETHER EXPRESS OR IMPLIED, ARE THE OBLIGATION OF BONDED BUILDERS. IN THE EVENT OF ANY INCONSISTENCY BETWEEN THE TERMS OF THE WARRANTY AND BB-W1110ST, THE TERMS OF BB-W1110ST, OR ANY LATER VERSIONS THEREOF, SHALL CONTROL. D. DISPUTE SETTLEMENT PROCEDURES 1. MEDIATION

The HOMEOWNER and MARONDA shall attempt to resolve any dispute over an alleged major structural defect in BB-W1110ST in the manner provided for by Georgias Right to Repair Act. If such dispute is not so resolved, then as a condition precedent to the commencement of any legal proceeding or action relating to BB-W1110ST, THE HOMEOWNER, BONDED BUILDERS, and MARONDA will attempt to resolve any disputes by mediation, which shall be in accordance with Section F of BB-W1110ST.

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2.

ARBITRATION

In the event the dispute cannot be resolved after the requirement of D1 has been satisfied, any and all disputes arising under BB-W1110ST shall be submitted to binding arbitration and not a court for determination by a judge or jury. Arbitration shall commence after written notice is given from either party to the other, such arbitration shall be accomplished expeditiously in the county where the covered home is located and shall be conducted in accordance with the rules of the AAA. The arbitration shall be conducted by a single arbitrator who is mutually agreed upon by the parties. In the event the parties are unable to agree on an arbitrator, each party shall select an arbitrator from the AAA list, and those two arbitrators shall mutually select an arbitrator to arbitrator the issues between the parties. The arbitrator shall be selected from a list of arbitrators submitted by the AAA and shall have expertise in the homebuilding and construction area of law. Judgment upon the award rendered by the arbitrator may be entered in any court having jurisdiction thereof. Each party shall be responsible for its own legal fees and costs and any other fees incurred in connection with an arbitration proceeding which arises out of or relates in any way to BB-W1110ST, provided. The arbitration panel shall award the arbitrator's fees and costs to the prevailing party in its arbitration judgment.

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