Related Party Disclosures

9 Months Ended

Sep. 30, 2011

Related Party Disclosures

Related Party Transactions Disclosure [Text Block]

Note B - Transactions with Affiliated Parties

The Partnership has no employees and depends on the General Partner and its affiliates for the management and administration of all Partnership activities.  The Partnership Agreement provides for certain payments to affiliates for services and for reimbursements of certain expenses incurred by affiliates on behalf of the Partnership.

Affiliates of the General Partner receive 5% of gross receipts from all of the Partnership's properties as compensation for providing property management services. The Partnership paid to such affiliates approximately $313,000 and $307,000 for the nine months ended September 30, 2011 and 2010, respectively, which is included in operating expenses.

Affiliates of the General Partner charged the Partnership for reimbursement of accountable administrative expenses amounting to approximately $167,000 and $175,000 for the nine months ended September 30, 2011 and 2010, respectively, which is included in general and administrative expenses and investment properties. The portion of these reimbursements included in investment properties at September 30, 2011 and 2010 are construction management services provided by an affiliate of the General Partner of approximately $66,000 and $63,000, respectively.

In accordance with the Partnership Agreement, AIMCO Properties, L.P., an affiliate of the General Partner advanced the Partnership approximately $140,000 and $1,189,000 during the nine months ended September 30, 2011 and 2010, respectively. The advances received during the nine months ended September 30, 2011 were made to assist with the operations for Post Ridge Apartments. The advances received during the nine months ended September 30, 2010 were made to assist with the payment of real estate taxes and operations for all of the Partnership’s investment properties and capital expenditures at two of its investment properties. Interest on advances was charged at a variable rate based on the market rate for similar type loans. Affiliates of the General Partner review the market rate quarterly. The interest rate on outstanding advances at September 30, 2011 was 11.25% and interest expense was approximately $1,000 and $80,000 for the nine months ended September 30, 2011 and 2010, respectively. During the nine months ended September 30, 2010, the Partnership repaid AIMCO Properties, L.P. approximately $276,000, which included approximately $15,000 of accrued interest. There were no such repayments during the nine months ended September 30, 2011. At September 30, 2011 the amount of outstanding loans and associated accrued interest owed to AIMCO Properties, LP was approximately $141,000 and is included in due to affiliates. There were no outstanding loans or accrued interest owed at December 31, 2010. Subsequent to September 30, 2011, the Partnership received an advance of approximately $310,000 to assist with capital expenditures at 865 Bellevue Apartments. The Partnership may receive additional advances of funds from AIMCO Properties, L.P., although AIMCO Properties, L.P. is not obligated to provide such advances.  For more information on AIMCO Properties, L.P., including copies of its audited balance sheets, please see its reports filed with the Securities and Exchange Commission.

The Partnership Agreement provides for a special management fee equal to 9% of the total distributions made to the limited partners from cash flow provided by operations to be paid to the General Partner for executive and administrative management services. There were no such special management fees paid or earned during the nine months ended September 30, 2011 and 2010 as there were no operating distributions during this time.

For acting as real estate broker in connection with the sale of South Port Apartments in 2003, the General Partner was paid a real estate commission of approximately $295,000.  When the Partnership terminates, the General Partner will have to return this commission if the limited partners do not receive their original invested capital plus a 6% per annum cumulative return. In connection with the Merger Agreement, the return of this amount was included in the calculation of the Cash Consideration.

Prior to 2010, the Partnership distributed various amounts from the proceeds of property sales and refinancings. At both September 30, 2011 and December 31, 2010, approximately $3,892,000 of these distributions from proceeds are payable to the General Partner and Special Limited Partners as the distributions are subordinated and deferred per the Partnership Agreement until the limited partners receive 100% of their original capital contributions from surplus cash. As of September 30, 2011, the limited partners have not received the 100% return of their original capital contributions. Therefore, the General Partner and Special Limited Partners are not entitled to receive these distributions. In connection with the Merger Agreement, the Cash Consideration was determined without deducting these distributions.

The Partnership insures its properties up to certain limits through coverage provided by Aimco which is generally self-insured for a portion of losses and liabilities related to workers’ compensation, property casualty, general liability and vehicle liability. The Partnership insures its properties above the Aimco limits through insurance policies obtained by Aimco from insurers unaffiliated with the General Partner. During the nine months ended September 30, 2011, the Partnership was charged by Aimco and its affiliates approximately $135,000 for hazard insurance coverage and fees associated with policy claims administration. Additional charges will be incurred by the Partnership during 2011 as other insurance policies renew later in the year. The Partnership was charged by Aimco and its affiliates approximately $229,000 for insurance coverage and fees associated with policy claims administration during the year ended December 31, 2010.