8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

_____________________

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): September 27, 2019

Preferred Apartment Communities, Inc.

(Exact Name of Registrant as Specified in its Charter)

Maryland	001-34995	27-1712193
(State or other Jurisdiction of Incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

3284 Northside Parkway NW, Suite 150	30327
(Address of Principal Executive Offices)	(Zip Code)

Registrant's telephone number, including area code:  (770) 818-4100

_____________________

(Former name or former address, if changed since last report)

___________________

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[ ]	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ]	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ]	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ]	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, par value $.01 per share	APTS	NYSE

Securities registered pursuant to Section 12(g) of the Act:

Title of each class

Series A Redeemable Preferred Stock, par value $0.01 per share

Warrant to Purchase Common Stock, par value $0.01 per share

Series M Redeemable Preferred Stock, par value $0.01 per share

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Item 8.01    Other Events.

Preferred Apartment Communities, Inc. (the "Company") today announced that on September 27, 2019 its Registration Statement on Form S-3 (Reg. Statement No. 333-233576), offering a maximum of 1,000,000 shares of its Series A1 Redeemable Preferred Stock, par value $0.01 per share, or its Series M1 Redeemable Preferred Stock, par value $0.01 per share, was declared effective (the "Effectiveness"). In connection with the Effectiveness, the Company is hereby filing as exhibits hereto, (i) a form of Subscription Agreement, and (ii) a form of Escrow Agreement, by and between Preferred Capital Securities, LLC, the Company, and UMB Bank, National Association, a national banking association, as escrow agent, copies of which are filed as Exhibit 4.5 and Exhibit 10.1, respectively, to this Current Report on Form 8-K and incorporated by reference herein.

Item 9.01    Financial Statements and Exhibits.

(d)    Exhibits.

Exhibit Number	Description
4.5	Form of Subscription Agreement
10.1	Form of Escrow Agreement

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

PREFERRED APARTMENT COMMUNITIES, INC.

(Registrant)

Date: October 2, 2019	By:	/s/ Jeffrey R. Sprain
		Jeffrey R. Sprain
		Executive Vice President, General Counsel and Corporate Secretary

EX-4.5

Subscription A PUBLICLY TRADED COMPANY (NYSE: APTS) Agreement Payment Instructions: Make all ch ecks payable to “UMB BANK Escrow Agent for PAC A.1 or SECTION 1 : INVESTMENT M.1 To wire funds, see instruction on Page 5 Preferred Apartment Communities, Inc., is selling up to a maximum of 1,000,000 shares in connection with this offering (the ‘‘Offering’’). Each Preferred Share will be sold at a public offering price of $1,000 per Share and will not be certificated. This agreement is to be completed by the individual at the broker-dealer who will be signing the subscription agreement. ALL sections MUST be completed and legible. Write/Type “N/A” in the sections that are not applicable. Share Selection (Choose One) A.1 M.1 Number of shares purchased: Check here if additional purchase and complete Purchase price per unit: $ the investor information in section 3 : Aggregate purchase price: $ Account #: Minimum initial investment of at least $5,000. No fractional (if applicable) shares will be issued. SECTION 2 : ACCOUNT TYPE Check one Box Only ACCOUNT TYPE ADDITIONAL REQUIRED DOCUMENTATION Individual TOD If TOD, Transfer on Death form Joint Tenants WROS Tenants in Common TOD If TOD, Transfer on Death form Community Property Trust Trustee Certification form or trust documents Documents evidencing individuals authorized to act Estate on behalf of estate Custodial UGMA: State of UTMA: State of None. Corporation C Corp S Corp Articles of Incorporation or Corporate Resolution LLC LLC Operating Agreement or LLC Resolution Partnership Certification of Powers or Certificare of Partnership Limited Partnership Formation document or other document Non-Profit Organization evidencing authorized signers Profit Sharing Plan Defined Benefit Plan Pages of plan document that list plan name, date, trustee KEOGH Plan name(s) and signatures For Inherited IRA indicate Decedent’s name: Traditional IRA SEP IRA ROTH IRA * Complete Custodial Ownership below Simple IRA Inherited/Beneficial IRA Other (Specify) CUSTODIAL OWNERSHIP: For All Qualified Accounts THIRD PARTY ADMINISTERED CUSTODIAL PLAN - (New IRA accounts will require an additional application) CUSTODIAN INFORMATION (To be completed by Custodian above) Custodian Tax ID#: Name of Custodian: Custodian Account#: Mailing Address: Custodian Phone#: City, State, ZIP: For help completing this form, please call Investor Services at 855.320.1414 1/5 PREFERRED APARTMENT COMMUNITIES | A.1 and M.1 SUBSCRIPTION AGREEMENT

SECTION 3 : INVESTOR INFORMATION Please print name(s) in which Shares are to be registered. A. INVESTOR/TRUSTEE B. CO-INVESTOR/CO-TRUSTEE First Name: First Name: Middle Name: Middle Name: Last Name: Last Name: Tax ID or SS#: Tax ID or SS#: Street Address: Street Address: City: City: State: State: ZIP: ZIP: Daytime Phone# Daytime Phone# Email address: Email address: Date of Birth: Date of Birth: Employer: Employer: Retired: Retired: If Non-U.S. Citizen, If Non-U.S. Citizen, specify Country specify Country of Citizenship: of Citizenship: C. TRUST/CORPORATION/PARTNERSHIP/OTHER Trustee’s information must be provided in Sections 3A and 3B Entity Name/ Title of Trust Date of Trust: Tax ID #: D. GOVERNMENT ID (FOREIGN CITIZENS ONLY) Identification documents must have a reference number and photo. Please attach photocopy. PLACE OF BIRTH City: State/Province: Country: IMMIGRATION STATUS U.S Driver’s INS Permanent Foreign National Employee Passport Passport License Resident Alien Identity Documents Authorization without U.S. with U.S. Card Document Visa Visa Bank Name: Account#: Bank Address: Number for the document Bank Phone#: Country of Issuance: checked above: For help completing this form, please call Investor Services at 855.320.1414 2/5 PREFERRED APARTMENT COMMUNITIES | A.1 and M.1 SUBSCRIPTION AGREEMENT

Select only one; if nothing is marked the distributions will default to Mail Check SECTION 4 : DISTRIBUTIONS (to the Address of Record) Complete this section to elect how to receive your dividend distributions. IRA accounts may not direct distributions without the custodian’s approval. I hereby subscribe for Shares of Preferred Apartment Communities, Inc. and elect the distribution option indicated below: For Custodial Accounts Qualified (IRA) all distributions will be sent via check directly to the Custodian as listed in Section 2 For Non-Custodial Or Non-qualified Firm/Platform Accounts. Please choose one option: Mail Check (to the Address of Record) Direct via ACH Deposit Please attach a Mail Check to clearing firm/ pre-printed voided check (Non-Custodian financial institution listed Investors only) & sign authorization below & sign authorization I authorize Preferred Apartment Communities, Inc. or its agent to deposit my distribution/dividend to my brokerage checking or savings account. This authority will remain in force until I notify Preferred Apartment Communities, Inc. in writing to cancel. If Preferred Apartment Communities, Inc. deposits funds erroneously into my account, they are authorized to debit my account for an amount not to exceed the amount of the erroneous deposit. Name/Entity Name/ Financial Mailing Address: Institution: City: State: ZIP: Phone #: Checking Savings Your Account#: ABA/Routing#: Account Account Brokerage Account Owner Signature Co-Owner Signature (if applicable) Date: Date: Please Attach Copy Of Voided Check To This Form If Funds Are To Be Sent To A Bank * The above services cannot be established without a pre-printed voided check. For electronic funds transfers, signatures of bank account owners are required exactly as they appear on the bank records. If the registration at the bank differs from that on this Subscription Agreement, all parties must sign below. Bobby Bankrate 1111 123 Bankrate Boulevard New York, NY 10001 555-555-5555 Date: Attach Check Pay to the order of: $ Contains Security Features. Details Here DOLLARS on Back Generic Bank and Trust Memo: |:123456789 |:10987654321 |:1111 Routing Account Check Number Number Number For help completing this form, please call Investor Services at 855.320.1414 3/5 PREFERRED APARTMENT COMMUNITIES | A.1 and M.1 SUBSCRIPTION AGREEMENT

SECTION 5 : SUBSCRIBER ACKNOWLEDGMENTS AND SIGNATURES The undersigned hereby confirms this agreement to purchase the shares on the terms and conditions set forth herein and acknowledges and/or r epresents (or in the case of fiduciary accounts, the person authorized to sign on such subscriber’s behalf) the f ollowing: (you must initial each o f the representations below) I have received, read and understand the Registration Statement (Registration No. XXXXXXXXX), as (a) Owner Co-Owner modified or amended, including the related Prospectus and annual and periodic reports filed with the SEC (incorporated by reference into the registration statement and prospectus) wherein the terms, conditions and risks of the offering are described and agree to be bound by the terms and conditions. I am purchasing Shares for my/our own account. (b) I am in compliance with the USA PATRIOT Act and not on any governmental authority watch list. (c) Form W-9: I HEREBY CERTIFY under penalty of perjury, I certify that: (i) that the taxpayer identification number shown on the Subscription is correct (ii) that I am not subject to backup withholding because (a) I am exempt from backup withholding, or (b) I have not been notified by the Internal Revenue Service that I am subject to backup withholding as a result of a failure to report all interest or dividends, or (c) the IRS has notified me that I am no longer subject to backup withholding, and (iii) I am a U.S. citizen or other U.S. person (including a U.S. resident alien). (iv) The FATCA code(s) entered on this for (if any) indicating that I am exempt from FATCA reporting is correct. Certification Instructions: You must cross out item (ii) above if you have been notified by the IRS that you are currently subject to backup withholding because you have failed to report all interest and dividends on your tax return. The Internal Revenue Service does not require your consent to any provision of this document other than the certifications required to avoid backup withholding. Owner Signature Co-Owner Signature (if applicable) Date: Date: Signature of Custodian(s) or Trustee(s) (if applicable). Current Custodian must sign if investment is for an IRA Account Authorized Signature Date: (Custodian or Trustee) Once your account is established go to www.computershare.com/investor and sign up for electronic communication and you’ll help us save trees by reducing paper. WE INTEND TO ASSERT THE FOREGOING REPRESENTATIONS AS A DEFENSE IN ANY SUBSEQUENT LITIGATION WHERE SUCH ASSERTION WOULD BE RELEVANT. WE HAVE THE RIGHT TO ACCEPT OR REJECT THIS SUBSCRIPTION IN WHOLE OR IN PART, SO LONG AS SUCH PARTIAL ACCEPTANCE OR REJECTION DOES NOT RESULT IN AN INVESTMENT OF LESS THAN THE MINIMUM AMOUNT SPECIFIED IN THE PROSPECTUS. AS USED ABOVE, THE SINGULAR INCLUDES THE PLURAL IN ALL RESPECTS IF SHARES ARE BEING AC QUIRED BY MORE THAN ONE PERS ON. THIS SUBSCRIPTION AGREEMENT AND ALL RIGHTS HEREUNDER SHALL BE GOVERNED BY, AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE PRINCIPLES OF CONFLICT OF LAWS. By executing this Subscription Agreement, the subscriber is not waiving any rights under federal or state law. For help completing this form, please call Investor Services at 855.320.1414 4/5 PREFERRED APARTMENT COMMUNITIES | A.1 and M.1 SUBSCRIPTION AGREEMENT

SECTION 6 : FINANCIAL ADVISOR INFORMATION All fields must be completed The Financial Advisor must sign below to complet e order. The Fi nancial Advisor hereby represents and warrants that he/she is dul y licensed and may lawfully sel l shares of Preferred Ap artment Communities, Inc. Broker Dealer/RIA: Financial Advisor Name: Mailing Address: City: State: Zip: Email Address: Business Phone# Fax#: Financial Advisor Broker-Dealer CRD#: Advisor#: CRD: M.1 Only - RIA Submission Check this box to indicate whether submission is made through the Registered Investment Avdisor (RIA) in its capacity as the RIA and not in its capacity as a Registered Representative of a Broker-Dealer. If applicable, whose agreement with the subscriber includes a fixed or "wrap" fee feature for advisory and related brokerage services. I understand that by checking the above box, I will not receive a selling commission. The undersigned further represents and certifies that in connection with the subscription for M.1, he/see has compiled with and has followed all applicable policies and procedures under his firm's exisiting Anti-Money Laundering Program and Customer Identification Program. Financial Advisor Branch Manager and /or Signature: RIA Signature: Date: Date: SECTION 7 : PAYMENT INSTRUCTIONS SUBMISSION: Mail the ORIGINAL documents, along with your check payable to ‘‘UMB Bank Escrow Agent for PAC A.1 and M.1 to the address below. To wire funds, see instructions below. CHECKS & DOCUMENTS INSTRUCTIONS Make Checks Payable to: UMB Bank Escrow Agent for PAC A.1 UMB Bank Escrow Agent for PAC M.1 Note: Cash, Cashier’s checks/official bank che cks in bearer form, foreign checks, money orders, third party checks or traveler’s checks will not be accepted. Mail to: UMB Bank, N.A. Corporate Trust & Escrow Services Attention: Lara Stevens/Mail Stop 1011201 928 Grand, 12th Floor, Kansas City, MO 64106 Phone: (816) 860-3017: Fax (816) 860-3029 WIRE INSTRUCTIONS UMB Bank, N.A. ABA No: 101000695 Acct No: 980000XXXX Acct Name: Trust Clearance Reference: 145709 - PAC A.1 - [Investor Name] - Attn: Lara Stevens Reference: 145709 - PAC M.1 - [Investor Name] - Attn: Lara Stevens For help completing this form, please call Investor Services at 855.320.1414 PREFERRED APARTMENT COMMUNITIES | A.1 and M.1 SUBSCRIPTION AGREEMENT 5/5

EX-10.1

FORM OF SUBSCRIPTION ESCROW AGREEMENT

THIS FORM OF SUBSCRIPTION ESCROW AGREEMENT dated as of September __, 2019 (this “Agreement”), is entered into among Preferred Capital Securities, LLC (the “Dealer Manager”), Preferred Apartment Communities, Inc. (the “Company”) and UMB Bank, National Association, a national banking association, as escrow agent (the “Escrow Agent”).

WHEREAS, the Company intends to raise cash funds from Investors (as defined below) pursuant to a public offering (the “Offering”) of up to 1,000,000 shares of preferred stock, having a purchase price of $1,000 per share of preferred stock (for an aggregate offering amount of $1,000,000,000), consisting of (i) shares of Series A1 Redeemable Preferred Stock, par value $0.01 per share, and (ii) shares of Series M1 Redeemable Preferred Stock, par value $0.01 per share, of the Company (collectively, the “Securities”), pursuant to the registration statement on Form S-3 of the Company (No. 333-233576) (as amended, the “Offering Document”).

WHEREAS, the Escrow Agent is willing to accept appointment as escrow agent only for the express duties set forth herein.

NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants and agreements contained herein, the parties hereto, intending to be legally bound, hereby agree as follows:

1.     Proceeds to be Escrowed. On or before the date the Offering Document is declared effective by the Securities and Exchange Commission, the Company shall establish an escrow account with the Escrow Agent to be invested in accordance with Section 7 entitled “ESCROW ACCOUNT FOR THE BENEFIT OF INVESTORS OF A1M1PREFERRED STOCK OF PREFERRED APARTMENT COMMUNITIES, INC.” (including such abbreviations as are required for the Escrow Agent’s systems) (the “Escrow Account”) with two separate subaccounts (a “A1 Subaccount” and a “M1 Subaccount”). All checks, wire transfers and other funds received from subscribers of Securities via “Direct Registration Settlement” (as described in the Offering Document) (“Investors”) in payment for the Securities (“Investor Funds”) will be delivered to the Escrow Agent within one business day following the day upon which such Investor Funds are received by the Company or its agents, and shall, upon receipt by the Escrow Agent, be retained in escrow by the Escrow Agent. Upon receipt of any such Investor Funds, the Company shall direct the Escrow Agent in writing whether such funds shall be deposited into the A1 Subaccount or the M1 Subaccount. In the absence of the receipt of such written direction, the Escrow Agent shall have no obligation to determine whether such investor funds shall be deposited into the A1 Subaccount or the M1 Subaccount. During the term of this Agreement, the Company or its agents shall cause all checks received by and made payable to it for payment for the Securities to be endorsed in favor of the Escrow Agent and delivered to the Escrow Agent for deposit in the Escrow Account.

The initial escrow period shall commence upon the effectiveness of this Agreement and shall continue until the Termination Date (as defined herein) The Escrow Account shall not be an interest-bearing account.

PAC:19638.2

The Escrow Agent shall have no duty to make any disbursement, investment or other use of Investor Funds until and unless it has good and collected funds. If any checks deposited in the Escrow Account are returned or prove uncollectible after the funds represented thereby have been released by the Escrow Agent, then the Company shall promptly reimburse the Escrow Agent for any and all costs incurred for such. The Escrow Agent shall be under no duty or responsibility to enforce collection of any check delivered to it hereunder.

2.     Investors. Investors will be instructed by the Dealer Manager or any soliciting dealers retained by the Dealer Manager (the “Soliciting Dealers”) to remit the purchase price in the form of checks ( “instruments of payment”) payable to the order of, or funds wired in favor of, “UMB BANK, N.A., ESCROW AGENT FOR PREFERRED APARTMENT COMMUNITIES, INC.” Any checks made payable to a party other than the Escrow Agent shall be returned to the Dealer Manager or Soliciting Dealer that submitted the check.

If any subscription agreement for the purchase of Securities solicited by a Soliciting Dealer is rejected by the Company, then the subscription agreement, to the extent so received, and check for the purchase of Securities will be returned to the rejected subscriber within ten business days from the date of rejection. The Company and Dealer Manager shall provide any necessary documentation to the Escrow Agent, upon which it may rely, to enable the Escrow Agent to return amounts to rejected subscribers.

All Investor Funds deposited in the Escrow Account shall not be subject to any liens or charges by the Company or the Escrow Agent, or judgments or creditors’ claims against the Company, until and unless released to the Company as hereinafter provided. The Company understands and agrees that the Company shall not be entitled to any Investor Funds on deposit in the Escrow Account and no such funds shall become the property of the Company, or any other entity except as released to the Company pursuant to Section 3. The Escrow Agent will not use the information provided to it by the Company for any purpose other than to fulfill its obligations as Escrow Agent hereunder. The Escrow Agent will treat all Investor information as confidential; provided if the Escrow Agent is compelled-in the absence of a protective order or other remedy-to disclose the Investor information, the Escrow Agent may without liability disclose the Investor information that is required but must exercise commercially reasonable efforts (at the sole expense of the Company) to preserve the confidential treatment of the Investor Information. Despite the foregoing, however, nothing in this Agreement prohibits, prevents, or limits the Escrow Agent from disclosing any Investor information, without notice to or consent of the Company, if the disclosure is made to a supervisory or governmental authority or a self-regulatory organization in the course of any examination, inquiry, or audit of the Escrow Agent or Company or any of the Escrow Agent’s representatives or businesses.

3.     Disbursement of Funds. The Escrow Agent, upon receipt of Escrow Release Notice, attached hereto as Exhibit C, shall periodically transfer any portion of the Investor Funds in the A1 Subaccount and/or the M1 Subaccount to the Company or such other parties as set forth in the applicable Escrow Release Notice. The Escrow Agent shall effect such transfer by the close of business on the date the Escrow Agent receives the applicable Escrow Release Notice; provided, however, if the Escrow Agent receives the applicable Escrow Release Notice after 2pm Central Time, then the Escrow Agent shall effect such transfer by the close of business on the next succeeding business day. Notwithstanding the foregoing, if requested by the Escrow Agent,

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PAC:19638.2

the Escrow Agent shall have no obligation totransfer Investor Funds to any party until after it has received an executed and valid IRS Form W-9, or valid substitute thereto, from such party.

Upon the Escrow Agent’s receipt of written notice that (i) the Company is abandoning the sale of the Securities; or (ii) the Securities and Exchange Commission or any other federal or state regulatory authority that a stop or similar order has been issued with respect to the Offering Document and has remained in effect for at least 20 days, the Escrow Agent shall return Investor Funds to Investors. The Company and Dealer Manager shall provide any necessary documentation to the Escrow Agent, upon which it may rely, to enable the Escrow Agent to return amounts to Investors.

4.    Term of Escrow. Unless otherwise extended, the “Termination Date” shall be the earliest of: (a) the close of business on [___________], 2021, or [______________], 2022 if the Offering is extended to such date by the Company, and the Company shall give notice to the Escrow Agent of such; (b) the date the Escrow Agent receives written notice from the Company that all the Securities offered pursuant to the Offering Document are sold, (c) the date all funds held in the Escrow Account are distributed to the Company or to Investors pursuant to Section 3 and the Company has informed the Escrow Agent in writing to close the Escrow Account; (d) the date the Escrow Agent receives written notice from the Company that it is abandoning the sale of the Securities; and (e) the date the Escrow Agent receives notice from the Securities and Exchange Commission or any other federal or state regulatory authority that a stop or similar order has been issued with respect to the Offering Document and has remained in effect for at least 20 days. After the Termination Date, the Company and its agents shall not deposit, and the Escrow Agent shall not accept, any additional amounts representing payments by prospective Investors.

5.     Duty and Liability of the Escrow Agent. The sole duty of the Escrow Agent shall be to receive Investor Funds and subscription agreements and hold them subject to release, in accordance herewith, and the Escrow Agent shall be under no duty to determine whether the Company, the Dealer Manager or any Soliciting Dealer is complying with requirements of this Agreement, the Offering or applicable securities or other laws in tendering the Investor Funds to the Escrow Agent. No other agreement entered into between the parties, or any of them, shall be considered as adopted or binding, in whole or in part, upon the Escrow Agent notwithstanding that any such other agreement may be referred to herein or deposited with the Escrow Agent or the Escrow Agent may have knowledge thereof, including specifically but without limitation the Offering Document or any other document related to the Offering (including the subscription agreement and exhibits thereto), and the Escrow Agent’s rights and responsibilities shall be governed solely by this Agreement. The Escrow Agent shall not be responsible for or be required to enforce any of the terms or conditions of the Offering Document or any other document related to the Offering (including the subscription agreement and exhibits thereto) or other agreement between the Company and any other party. The Escrow Agent may conclusively rely upon and shall be protected in acting upon any statement, certificate, notice, request, consent, order or other document believed by it to be genuine and to have been signed or presented by the proper party or parties. The Escrow Agent shall have no duty or liability to verify any such statement, certificate, notice, request, consent, order or other document, and its sole responsibility shall be to act only as expressly set forth in this Agreement. Concurrent with the execution of this Agreement, the Company and the Dealer Manager shall each deliver to the

3

PAC:19638.2

Escrow Agent an authorized signers form in the form of Exhibit Aor Exhibit A-1 to this Agreement, as applicable. The Escrow Agent shall be under no obligation to institute or defend any action, suit or proceeding in connection with this Agreement unless first indemnified to its satisfaction. The Escrow Agent may consult counsel of its own choice with respect to any question arising under this Agreement and the Escrow Agent shall not be liable for any action taken or omitted in good faith upon advice of such counsel. The Escrow Agent shall not be liable for any action taken or omitted by it in good faith except to the extent that a court of competent jurisdiction determines that the Escrow Agent’s gross negligence or willful misconduct was the primary cause of loss. The Escrow Agent is acting solely as escrow agent hereunder and owes no duties, covenants or obligations, fiduciary or otherwise, to any other person by reason of this Agreement, except as otherwise stated herein, and no implied duties, covenants or obligations, fiduciary or otherwise, shall be read into this Agreement against the Escrow Agent.  If any disagreement between any of the parties to this Agreement, or between any of them and any other person, including any Investor, resulting in adverse claims or demands being made in connection with the matters covered by this Agreement, or if the Escrow Agent is in doubt as to what action it should take hereunder, the Escrow Agent may, at its option, refuse to comply with any claims or demands on it, or refuse to take any other action hereunder, so long as such disagreement continues or such doubt exists, and in any such event, the Escrow Agent shall not be or become liable in any way or to any person for its failure or refusal to act, and the Escrow Agent shall be entitled to continue so to refrain from acting until (a) the rights of all interested parties shall have been fully and finally adjudicated by a court of competent jurisdiction, or (b) all differences shall have been adjudged and all doubt resolved by agreement among all of the interested persons, and the Escrow Agent shall have been notified thereof in writing signed by all such persons. Notwithstanding the foregoing, the Escrow Agent may in its discretion obey the order, judgment, decree or levy of any court, whether with or without jurisdiction and the Escrow Agent is hereby authorized in its sole discretion to comply with and obey any such orders, judgments, decrees or levies. If any controversy should arise with respect to this Agreement the Escrow Agent shall have the right, at its option, to institute an interpleader action in any court of competent jurisdiction to determine the rights of the parties. IN NO EVENT SHALL THE ESCROW AGENT BE LIABLE, DIRECTLY OR INDIRECTLY, FOR ANY SPECIAL, INDIRECT OR CONSEQUENTIAL LOSSES OR DAMAGES OF ANY KIND WHATSOEVER (INCLUDING WITHOUT LIMITATION LOST PROFITS), EVEN IF THE ESCROW AGENT HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH LOSSES OR DAMAGES AND REGARDLESS OF THE FORM OF ACTION. The parties hereto agree that the Escrow Agent has no role in the preparation of the Offering Document (including the subscription agreement and other exhibits thereto) and makes no representations or warranties with respect to the information contained therein or omitted therefrom. The Escrow Agent shall have no obligation, duty or liability with respect to compliance with any federal or state securities, disclosure or tax laws concerning the Offering Document or any other document related to the Offering (including the subscription agreement and other exhibits thereto) or the issuance, offering or sale of the Securities. The Escrow Agent shall have no duty or obligation to monitor the application and use of the Investor Funds once transferred to the Company, that being the sole obligation and responsibility of the Company.

6.     Escrow Agent’s Fee. The Escrow Agent shall be entitled to compensation for its services as stated in the fee schedule attached hereto as Exhibit B, which compensation shall be paid by the Company. The fee agreed upon for the services rendered hereunder is intended as full

4

PAC:19638.2

compensation for the Escrow Agent’s services as contemplated by this Agreement; provided, however, that if (a) the conditions for the disbursement of funds under this Agreement are not fulfilled, (b) the Escrow Agent renders any material service not contemplated in this Agreement, (c) there is any assignment of interest in the subject matter of this Agreement, (d) there is any material modification hereof, (e) any material controversy arises hereunder, or (f) the Escrow Agent is made a party to any litigation pertaining to this Agreement or the subject matter hereof, then the Escrow Agent shall be reasonably compensated for such extraordinary services and reimbursed for all costs and expenses, including reasonable attorney’s fees, occasioned by any delay, controversy, litigation or event, and the same shall be recoverable from the Company. The Company’s obligations under this Section 6 shall survive the resignation or removal of the Escrow Agent and the assignment or termination of this Agreement.

7.    Investment of Investor Funds. Investor Funds shall be deposited in the Escrow Account in accordance with Section 1 and held un-invested in the Escrow Account, which shall be non-interest bearing.

8.     Notices. All notices, requests, demands, and other communications under this Agreement shall be in writing and shall be deemed to have been duly given (a) on the date of service if served personally on the party to whom notice is to be given, (b) on the day of transmission if sent by facsimile/email transmission bearing an authorized signature to the facsimile number/email address given below, and written confirmation of receipt is obtained promptly after completion of transmission, (c) on the day after delivery to Federal Express or similar overnight courier or the Express Mail service maintained by the United States Postal Service, or (d) on the fifth day after mailing, if mailed to the party to whom notice is to be given, by first class mail, registered or certified, postage prepaid, and properly addressed, return receipt requested, to the party as follows:

If to the Company:

Preferred Apartment Communities, Inc.

3284 Northside Parkway, NW, Suite 150

Atlanta, Georgia 30327

Fax: (770) 818-4105

Attention: Daniel M. DuPree, Chief Executive Officer

Attention: Jeffrey Sprain, General Counsel and Secretary

with a copy to:

Proskauer Rose LLP

Eleven Times Square

New York, New York 10036

Fax: (212) 969-2900

Attention: Peter M. Fass, Esq.

James P. Gerkis, Esq.

If to the Dealer Manager:

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PAC:19638.2

Preferred Capital Securities, LLC

3284 Northside Parkway, NW, Suite 150

Atlanta, Georgia 30327

Email: bcho@prefcapitalsecurities.com

Attention: Brian Cho, Chief Compliance Officer

with a copy to:

Kunzman & Bollinger, Inc.

5100 N. Brookline, Suite 600

Oklahoma City, OK 73112

Fax: (405) 942-3527

Email: wkunzman@kunzboll.net

Attention: Wallace W. Kunzman, Jr.

If to Escrow Agent:

UMB Bank, National Association

1010 Grand Blvd. 4^th Floor

Mail Stop: 1020409

Kansas City, Missouri 64106

Attention: Lara Stevens, Corporate Trust & Escrow Services Dept.

Telephone: (816) 860-3017

Fax: (816) 860-3029

Email: lara.stevens@umb.com

Any party may change its address for purposes of this Section by giving the other party written notice of the new address in the manner set forth above.

9.     Indemnification of Escrow Agent. The Company and the Dealer Manager hereby agree to, jointly and severally, indemnify, defend and hold harmless the Escrow Agent from and against, any and all losses, liabilities, costs, damages and expenses, including, without limitation, reasonable counsel fees and expenses, which the Escrow Agent may suffer or incur by reason of any action, claim or proceeding brought against the Escrow Agent arising out of or relating in any way to this Agreement or any transaction to which this Agreement relates unless such loss, liability, cost, damage or expense is finally determined by a court of competent jurisdiction to have been primarily caused by the gross negligence or willful misconduct of the Escrow Agent. The terms of this Section shall survive the termination of this Agreement and the resignation or removal of the Escrow Agent.

10.     Successors and Assigns. Except as otherwise provided in this Agreement, no party hereto shall assign this Agreement or any rights or obligations hereunder without the prior written consent of the other parties hereto and any such attempted assignment without such prior written consent shall be void and of no force and effect. This Agreement shall inure to the benefit of and shall be binding upon the successors and permitted assigns of the parties hereto. Any

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PAC:19638.2

corporation or association into which the Escrow Agent may be converted or merged, or with which it may be consolidated, or to which it may sell or transfer all or substantially all of its corporate trust business and assets as a whole or substantially as a whole, or any corporation or association resulting from any such conversion, sale, merger, consolidation or transfer to which the Escrow Agent is a party, shall be and become the successor Escrow Agent under this Agreement and shall have and succeed to the rights, powers, duties, immunities and privileges as its predecessor, without the execution or filing of any instrument or paper or the performance of any further act.

11.     Governing Law; Jurisdiction. This Agreement shall be construed, performed, and enforced in accordance with, and governed by, the internal laws of the State of New York, without giving effect to the principles of conflicts of laws thereof.

12.     Severability. If any provision of this Agreement is declared by any court or other judicial or administrative body to be null, void, or unenforceable, said provision shall survive to the extent it is not so declared, and all of the other provisions of this Agreement shall remain in full force and effect.

13.     Amendments; Waivers. This Agreement may be amended or modified, and any of the terms, covenants, representations, warranties, or conditions hereof may be waived, only by a written instrument executed by the parties hereto, or in the case of a waiver, by the party waiving compliance. Any waiver by any party of any condition, or of the breach of any provision, term, covenant, representation, or warranty contained in this Agreement, in any one or more instances, shall not be deemed to be nor construed as further or continuing waiver of any such condition, or of the breach of any other provision, term, covenant, representation, or warranty of this Agreement. The Company and the Dealer Manager agree that any requested waiver, modification or amendment of this Agreement shall be consistent with the terms of the Offering.

14.     Entire Agreement. This Agreement contains the entire agreement and understanding among the parties hereto with respect to the escrow contemplated hereby and supersedes and replaces all prior and contemporaneous agreements and understandings, oral or written, with regard to such escrow.

15.     Section Headings. The section headings in this Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Agreement.

16.     Counterparts. This Agreement may be executed (including by facsimile transmission) with counterpart signature pages or in counterparts, each of which shall be deemed an original, but all of which shall constitute the same instrument. Copies, telecopies, facsimiles, electronic files and other reproductions of original executed documents shall be deemed to be authentic and valid counterparts of such original documents for all purposes, including the filing of any claim, action or suit in the appropriate court of law. The parties hereto agree that the transactions described herein may be conducted and related documents may be stored by electronic means.

17.     Resignation. The Escrow Agent may resign upon 30 days’ advance written notice to the parties hereto. If a successor escrow agent is not appointed by the Company within the 30-day period following such notice, the Escrow Agent may petition any court of competent jurisdiction

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PAC:19638.2

to name a successor escrow agent, or may interplead the Investor Funds with such court, whereupon the Escrow Agent’s duties hereunder shall terminate.

18.    References to Escrow Agent. Other than the Offering Document, any of the other documents related to the Offering (including the subscription agreement and exhibits thereto) and any amendments thereof or supplements thereto, no printed or other matter in any language (including, without limitation, notices, reports and promotional material) which mentions the Escrow Agent’s name or the rights, powers, or duties of the Escrow Agent shall be issued by the Company or the Dealer Manager, or on the Company’s or the Dealer Manager’s behalf, unless the Escrow Agent shall first have given its specific written consent thereto. Notwithstanding the foregoing, any amendment or supplement to the Offering Document or any other document related to the Offering (including the subscription agreement and exhibits thereto) that revises, alters, modifies, changes or adds to the description of the Escrow Agent or its rights, powers or duties hereunder shall not be issued by the Company or the Dealer Manager, or on the Company’s or the Dealer Manager’s behalf, unless the Escrow Agent has first given specific written consent thereto.

19.    Regulatory Compliance. The Company and the Dealer Manager shall provide to the Escrow Agent upon the execution of this Agreement any documentation requested and any information reasonably requested by the Escrow Agent to comply with the USA Patriot Act of 2001, as amended from time to time and the Bank Secrecy Act, as amended from time to time.

[Signature page follows.]

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PAC:19638.2

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed the date and year first set forth above.

PREFERRED APARTMENT COMMUNITIES, INC.

By:
	Name:	Jeffrey R. Sprain
	Title:	Executive Vice President- Legal, General Counsel & Corporate Secretary

PREFERRED CAPITAL SECURITIES, LLC

By:
	Name:	Brian Cho
	Title:	Chief Compliance Officer

UMB BANK, NATIONAL

ASSOCIATION, as Escrow Agent

By:
	Name:	Lara L. Stevens
	Title:	Vice President

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PAC:19638.2

Exhibit A

CERTIFICATE AS TO AUTHORIZED SIGNATURES

The specimen signatures shown below are the specimen signatures of the individuals who have been designated as Authorized Representatives of Preferred Apartment Communities, Inc. and are authorized to initiate and approve transactions of all types for the above-mentioned account on behalf of Preferred Apartment Communities, Inc.

Name/Title	Specimen Signature
Daniel M. DuPree Chief Executive Officer	_______________________________ Signature
Leonard A. Silverstein President and Chief Operating Officer	_______________________________ Signature
Michael J. Cronin Executive Vice President, Chief Accounting Officer and Treasurer	_______________________________ Signature
Jeffrey R. Sprain Executive Vice President – Legal, General Counsel and Secretary	_______________________________ Signature

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PAC:19638.2

Exhibit A-1

CERTIFICATE AS TO AUTHORIZED SIGNATURES

The specimen signatures shown below are the specimen signatures of the individuals who have been designated as Authorized Representatives of Preferred Capital Securities, LLC and are authorized to initiate and approve transactions of all types for the above-mentioned account on behalf of Preferred Capital Securities, LLC.

Name/Title	Specimen Signature
Jeff Smith Chief Executive Officer	_______________________________ Signature
Brian Cho Chief Compliance Officer	_______________________________ Signature
Greg Mausz Executive Vice President – Operations & Due Diligence	_______________________________ Signature

Alex Evans Vice President of Operations _______________________________ Signature

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PAC:19638.2

Exhibit B

ESCROW FEES AND EXPENSES

Annual Fee

Annual Escrow Agent                        $[______]

Annual Fee will be payable upon the effectiveness of this agreement and will be billed annually in advance thereafter. Other fees and expenses will be billed as incurred.

Fees specified are for the regular, routine services contemplated by this Agreement, and any additional or extraordinary services, including, but not limited to disbursements involving a dispute or arbitration, or administration while a dispute, controversy or adverse claim is in existence, will be charged based upon time required at the then standard hourly rate.

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PAC:19638.2

Exhibit C

FORM OF ESCROW RELEASE NOTICE

Date:                 

UMB Bank, National Association

928 Grand Blvd. 12^th Floor

Mail Stop: 1011201

Kansas City, Missouri 64106

Ladies and Gentlemen:

In accordance with the terms of Section 3 of the Subscription Escrow Agreement dated as of February 14, 2017 (as the same may be amended from time to time, the “Escrow Agreement”), among Preferred Apartment Communities, Inc. (the “Company”), Preferred Capital Securities, LLC (the “Dealer Manager”) and UMB Bank, National Association (the “Escrow Agent”), the Company and the Dealer Manager hereby notify the Escrow Agent that the ________ closing will be held on ___________ for gross proceeds of $_________.

PLEASE DISTRIBUTE FUNDS BY WIRE TRANSFER (or as indicated) AS FOLLOWS

(wire instructions attached) from the A1 Subaccount:

$

$

PLEASE DISTRIBUTE FUNDS BY WIRE TRANSFER (or as indicated) AS FOLLOWS

(wire instructions attached) from the M1 Subaccount:

$

$

Very truly yours,

PREFERRED APARTMENT COMMUNITIES, INC.,
as the Company

By:        Name:    Title:

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PAC:19638.2

PREFERRED CAPITAL SECURITIES, LLC,
as the Dealer Manager

By:        Name:

Title:

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PAC:19638.2