ACPT American Community Properties Trust

Planned Communities | Commercial Development | Investment Properties

Corporate Governance

ACPT Audit Committee Charter

Organization
Purpose
Meetings
Duties and Responsibilities

ACPT Nominating and Corporate Governance Committee Charter

Organization
Purpose
Meetings
Duties and Responsibilities
Trusteee Candidates Recommended by Shareholders
Disclosure of Charter
Members

ACPT Audit Committee Charter
AMERICAN COMMUNITY PROPERTIES TRUST
AUDIT COMMITTEE OF THE BOARD OF TRUSTEES
CHARTER

Organization
This Charter governs the operations of the Audit Committee (the "Committee") of American Community Properties Trust ("ACPT" or the "Company"). The Committee shall review and reassess the Charter at least annually and obtain the approval of the Board of Trustees (the "Board"). The Committee members shall be members of, and appointed by, the Board and shall comprise at least three trustees, each of whom are independent of management and the Company. Members of the committee shall be considered independent as long as they do not accept any consulting, advisory, or other compensatory fee from the Company and are not an affiliated person of the Company or its subsidiaries, and meet the independence requirements of the stock exchange listing standards. All Committee members shall be financially literate, and at least one member shall be a "financial expert," as defined by SEC regulations. (back to top)

Purpose
The Committee shall provide assistance to the Board in fulfilling their oversight responsibility to the shareholders, potential shareholders, the investment community, and others relating to: the integrity of the Company's financial statements; the financial reporting process; the systems of internal accounting and financial controls; the performance of the Company's independent auditors; the independent auditor's qualifications and independence; and the Company's compliance with ethics policies and legal and regulatory requirements. In so doing, it is the responsibility of the Committee to maintain free and open communication between the Committee, independent auditors, and management of the Company. (back to top)

In discharging its oversight role, the Committee is empowered to investigate any matter brought to its attention with full access to all books, records, facilities, and personnel of the Company and the authority to engage independent counsel and other advisers as it determines necessary to carry out its duties. The Company shall provide to the Committee appropriate funding as determined by the Committee for payment of compensation to the independent auditors, any advisors engaged by the Committee and ordinary administrative expenses of the Committee as is necessary or appropriate in carrying out its duties.

Meetings
The Committee shall meet at least quarterly, or more frequently as circumstances dictate. The Company's independent public auditors shall attend at least one of the Committee's meetings each year. The Committee may request members of management or others to attend meetings and to provide pertinent information as necessary. The Committee shall provide management, and the independent public accountants with appropriate opportunities to meet privately with the Committee. (back to top)

Duties and Responsibilities
The primary responsibility of the Committee is to oversee the Company's financial reporting process and the audits of the financial statements on behalf of the Board and report the results of their activities to the Board. Management is responsible for the preparation, presentation, and integrity of the Company's financial statements and for the appropriateness of the accounting principles and reporting policies that are used by the Company. The independent auditors are responsible for auditing the Company's financial statements and for reviewing the Company's unaudited interim financial statements.

The Committee, in carrying out its responsibilities, believes its policies and procedures should remain flexible, in order to best react to changing conditions and circumstances. The Committee should take appropriate actions to set the overall corporate "tone" for quality financial reporting, sound business risk practices, and ethical behavior. The following shall be the principal duties and responsibilities of the Committee. These are set forth as a guide with the understanding that the Committee may supplement them as appropriate.

The Committee shall be directly responsible for the appointment and termination (subject, if applicable, to shareholder ratification), compensation, and oversight of the work of the independent auditors, including resolution of disagreements between management and the auditor regarding financial reporting. The Committee shall pre-approve all audit and non-audit services provided by the independent auditors and shall not engage the independent auditors to perform the specific non-audit services proscribed by law or regulation. The Committee may delegate pre-approval authority to a member of the Committee. The decisions of any Committee member to whom pre-approval authority is delegated must be presented to the full Committee at its next scheduled meeting.

At least annually, the Committee shall obtain and review a formal written report by the independent auditors describing:
• The firm's internal quality control procedures.
• Any material issues raised by the most recent internal quality control review, or peer review, of the firm, or by any inquiry or investigation by governmental or professional authorities, within the preceding five years, respecting one or more independent audits carried out by the firm, and any steps taken to deal with any such issues.
• All relationships between the independent auditor and the Company (to assess the auditor's independence) consistent with Independence Standards Board Standard No. 1.

The Committee shall actively engage in dialogue with the independent auditor with respect to any disclosed relationships or services that impact the objectivity and independence of the independent auditor and will take or recommend that the Board take appropriate action to oversee the independence of the independent auditor.

In addition, the Committee shall set clear hiring policies for employees or former employees of the independent auditors that meet the SEC regulations and stock exchange listing standards.

The Committee shall discuss with the independent auditors the overall scope and plans for their respective audits, including the adequacy of staffing and compensation. Also, the Committee shall discuss with management and the independent auditors the adequacy and effectiveness of the accounting and financial controls, including the Company's policies and procedures to assess, monitor, and manage business risk, and legal and ethical compliance programs (e.g., Company's Code of Conduct).

The Committee shall meet separately periodically with management, and the independent auditors to discuss issues and concerns warranting Committee attention. The Committee shall provide sufficient opportunity for the independent auditors to meet privately with the members of the Committee. The Committee shall review with the independent auditor any audit problems or difficulties and management's response.

The Committee shall receive regular reports from the independent auditor on the critical policies and practices of the Company, and all alternative treatments of financial information within generally accepted accounting principles that have been discussed with management.

The Committee shall review management's assertion on its assessment of the effectiveness of internal controls as of the end of the most recent fiscal year and the independent auditors' report on management's assertion.

The Committee shall review and discuss earnings press releases, as well as financial information and earnings guidance provided to analysts and rating agencies.

The Committee shall review the interim financial statements and disclosures under Management's Discussion and Analysis of Financial Condition and Results of Operations with management and the independent auditors prior to the filing of the Company's Quarterly Reports on Form 10-Q. Also, the Committee shall discuss the results of the quarterly review and any other matters required to be communicated to the Committee by the independent auditors under generally accepted auditing standards. The chair of the Committee may represent the entire Committee for the purposes of this review.

The Committee shall review with management and the independent auditors the financial statements and disclosures under Management's Discussion and Analysis of Financial Condition and Results of Operations to be included in the Company's Annual Report on Form 10-K (or the annual report to shareholders if distributed prior to the filing of Form 10-K), including their judgment about the quality, not just the acceptability, of accounting principles, the reasonableness of significant judgments, and the clarity of the disclosures in the financial statements. Also, the Committee shall discuss the results of the annual audit and any other matters required to be communicated to the Committee by the independent auditors under generally accepted auditing standards.

The foregoing is to include the reports required by Section 204 of the Sarbanes-Oxley Act of 2002 and, as appropriate,
(a) a review of major issues regarding:
(i) accounting principles and financial statement presentations, including any significant changes in the Company's selection or application of accounting principles, and
(ii) the adequacy of the Company's internal controls and any special audit steps adopted in light of material control deficiencies,
(b) a review of analyses prepared by management and/or the independent auditors setting forth significant financial reporting issues and judgments made in connection with the preparation of the financial statements, including analyses of the effects of alternative GAAP methods on the financial statements, and
(c) a review of the effect of regulatory and accounting initiatives, as well as off-balance sheet structures, on the financial statements of the Company.

The Committee shall establish procedures for the receipt, retention, and treatment of complaints received by the issuer regarding accounting, internal accounting controls, or auditing matters, and the confidential, anonymous submission by employees of the issuer of concerns regarding questionable accounting or auditing matters.

The Committee is to obtain assurance from the independent auditors that in the course of conducting the audit, there have been no acts detected or that have otherwise come to the attention of the audit firm that require disclosure to the Committee under the "Whistle-Blowing Provision" of Section 10A(b) of the Exchange Act.

The Committee shall receive corporate attorneys' reports of evidence of a material violation of securities laws or breaches of fiduciary duty.

The Committee is to report its activities regularly to the Board in such manner and at such times as the Committee and the Board deem appropriate, but in no event less than once a year. This report is to include the Committee's conclusions with respect to its evaluation of the independent auditors.

The Committee shall also prepare its report to be included in the Company's annual proxy statement, as required by SEC regulations. The Committee shall perform an evaluation of its performance at least annually to determine whether it is functioning effectively. (back to top)

AMERICAN COMMUNITY PROPERTIES TRUST
NOMINATING AND CORPORATE GOVERNANCE
COMMITTEE CHARTER

Organization
This charter governs the operations of the Nominating and Corporate Governance Committee (the "Committee") of American Community Properties Trust ("ACPT" or the "Company"). The Committee shall be composed of three or more trustees as determined by the Board of Trustees (the "Board"), each of whom (a) satisfies the independence requirements of the AMEX listing standards and (b) has, in the business judgment of the Board, experience that would be helpful in addressing the matters delegated to the Committee. Members shall be appointed and removed by the Board.

The Board will designate a member of the Committee to be the Chairman of the Committee. The Chairman shall be responsible for the leadership of the Committee, including preparing the agenda, presiding over meetings, making committee assignments and reporting for the Committee to the Board. (back to top)

Purpose
The Nominating Committee shall assist our Board with: identifying qualified individuals to become members of our Board in the event of any vacancy on the Board, recommending to the Board from time to time the member who should serve as Chairman of the Board, determining the composition of the committees of the Board, recommending to the Board, on an annual basis, trustee nominees for the Board to be presented in the Annual Shareholders Meeting, monitoring a process to assess Board effectiveness and developing and implementing our corporate governance guidelines. (back to top)

Meetings
The Committee shall meet at least once (1 time) per year and at such other times as determined by the Chairman of the Committee to be necessary or appropriate for the Committee to carry out its duties and responsibilities. Meetings of the Committee shall be called by the Secretary of the Company upon the request of the Chairman of the Committee, the CEO or a majority of the members of the Committee. Except for the regular annual meeting of the Committee, notice of any meeting of the Committee shall be given in the manner provided for in the Bylaws of the Company for meetings of the Board and its committees.

The provisions set forth in the Bylaws of the Company for meetings of the Board and its committees shall govern the quorum and voting requirements for all meetings of the Committee.

The Committee shall be required to keep a record of its actions and proceedings and shall report to the Board at the next meeting of the Board following the Committee meeting with such report to include recommendations for Board actions when appropriate. (back to top)

Duties and Responsibilities
In order to carry out the purposes described above, the Committee shall:

1. Perform the core function of recommending nominees to the Board. Any time the Committee is informed that the Board is considering adding a member to fill a vacancy or a newly created position, and any other time the Committee thinks the Board should consider adding a member, the Committee shall conduct a search for a person or persons to be added to the Board, and make recommendations to the Board as a result of the search.

2. Have the sole authority to retain and terminate any search firm to be used in the identification of director candidates and shall have sole authority to approve the search firm's fees and other retention terms.

3. Apply the criteria approved by the Board to its selection of new members of the Board.

4. Recommend to the Board prior to each Annual Meeting of Shareholders a slate of nominees for election or reelection to the Board seats which are up for election at such annual meeting.

5. Evaluate the performance of the Board and each member of the Board on an annual basis.

6. Develop and recommend to the Board for its approval a set of Corporate Governance Guidelines, and any proposed changes to those Corporate Governance Guidelines.

7. After adoption thereof, annually review our Corporate Governance Guidelines, and in connection therewith consult as necessary with the Company's outside legal counsel and any other experts the Committee deems appropriate about relevant legal requirements and any other matters the Committee deems appropriate.

8. Review at least annually the extent to which the Company and its Board members are complying with the Corporate Governance Guidelines, and, if necessary, recommend to the Board steps to improve compliance with the Corporate Governance Guidelines.

9. Conduct an annual evaluation of its own performance.

10. Conduct an annual review of this Charter and recommend to the Board any changes the Committee deems appropriate.

11. Perform such other duties and responsibilities as may be delegated to the Committee by the Board from time to time. (back to top)

Trustee Candidates Recommended by Shareholders
The Committee shall consider any Trustee candidate recommended by a shareholder using the same standards applied to potential nominees suggested by members of the Committee or other trustees, provided that the shareholder mails a recommendation to the Company that contains the following:

1. The recommending shareholder's name and contact information;

2. The candidate's name and contact information;

3. A brief description of the candidate's background and qualifications;

4. The reasons why the recommending shareholder believes the candidate would be well suited for the Board;

5. A statement by the candidate that the candidate is willing and able to serve on the Board;

6. A statement by the recommending shareholder that the candidate meets the criteria established by the Board; and

7. A brief description of the recommending shareholder's ownership of common stock of the Company and the term during which such shares have been held.

In making its determination whether to recommend that the Board nominate a candidate who had been recommended by a shareholder, the Committee shall consider, among other things, (a) the appropriateness of adding another member to the Board and (b) the candidate's background and qualifications.

The Committee may conduct an independent investigation of the background and qualifications of a candidate recommended by a shareholder, and may request an interview with the candidate. Only upon the completion of what the Committee believes to be a reasonable investigation shall the Committee determine whether to recommend that the Board nominate a candidate. In some instances, the completion of a reasonable investigation may delay the Committee's decision as to whether to make a recommendation until after it is too late for the candidate to be nominated with regard to a particular meeting of stockholders.

Once a decision has been made regarding the nomination of a candidate, the Committee will notify the recommending shareholder and the candidate of the determination. (back to top)

Disclosure of the Charter
The Company shall make available a copy of this Committee Charter on its website at http://www.acptrust.com/corp_gov.html (back to top)

Members
Antonio Ginorio
Thomas Shafer

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