9. Warranties

Homes are generally warranted against manufacturing defects for a period of one year commencing at the time of sale to the retail customer. Estimated costs relating to home warranties are provided at the date of sale. The Company has recorded a liability for estimated future warranty costs relating to homes sold based upon management’s assessment of historical experience factors, an estimate of the amount of homes in the distribution channel and current industry trends. Activity in the liability for estimated warranties was as follows (in thousands):


	Three Months Ended
	June 30,
	2011			2010

Balance at beginning of period	$	9,371		$	13,891
Liability assumed with Palm Harbor		1,932			—
Charged to costs and expenses		3,006			1,213
Payments and deductions		(2,826	)		(2,113	)


Balance at end of period	$	11,483		$	12,991