10QSB 1 cpf19.txt CPF19 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-QSB (Mark One) [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2004 [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT For the transition period from _________to _________ Commission file number 0-11935 CENTURY PROPERTIES FUND XIX (Exact name of small business issuer as specified in its charter) California 94-2887133 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 55 Beattie Place, PO Box 1089 Greenville, South Carolina 29602 (Address of principal executive offices) Check whether the issuer (i) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes X No ___ PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS CENTURY PROPERTIES FUND XIX CONSOLIDATED BALANCE SHEET (Unaudited) (in thousands, except unit data) September 30, 2004
Assets Cash and cash equivalents $ 292 Receivables and deposits 348 Restricted escrows 880 Other assets 1,338 Assets held for sale (Note A) 3,318 Investment properties: Land $ 8,774 Buildings and related personal property 73,294 82,068 Less accumulated depreciation (48,599) 33,469 $ 39,645 Liabilities and Partners' (Deficiency) Capital Liabilities Accounts payable $ 170 Tenant security deposits payable 246 Accrued property taxes 303 Other liabilities 486 Due to affiliates (Note B) 662 Mortgage notes payable 41,028 Liabilities related to assets held for sale 5,026 Partners' (Deficiency) Capital General partner $ (9,977) Limited partners (89,292 units issued and outstanding) 1,701 (8,276) $ 39,645 See Accompanying Notes to Consolidated Financial Statements
CENTURY PROPERTIES FUND XIX CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (in thousands, except per unit data)
Three Months Nine Months Ended September 30, Ended September 30, 2004 2003 2004 2003 (Restated) (Restated) Revenues: Rental income $ 2,583 $ 2,590 $ 7,537 $ 7,778 Other income 366 366 1,094 904 Casualty gain (Note E) -- -- -- 171 Total revenues 2,949 2,956 8,631 8,853 Expenses: Operating 1,490 1,323 4,089 3,846 General and administrative 94 114 332 352 Depreciation 734 694 2,188 2,110 Interest 678 709 2,034 2,299 Property tax 225 245 714 736 Total expenses 3,221 3,085 9,357 9,343 Loss from continuing operations (272) (129) (726) (490) (Loss) income from discontinued operations (Note A) (51) 607 (149) 334 Gain on sale of discontinued operations (Note D) -- 5,912 -- 5,912 Net (loss) income $ (323) $ 6,390 $ (875) $ 5,756 Net (loss) income allocated to general partner $ (39) $ 173 $ (104) $ 99 Net (loss) income allocated to limited partners (284) 6,217 (771) 5,657 $ (323) $ 6,390 $ (875) $ 5,756 Per limited partnership unit: Loss from continuing operations $ (2.68) $ (1.27) $ (7.16) $ (4.84) (Loss) income from discontinued operations (0.50) 6.00 (1.47) 3.30 Gain on sale of discontinued operations -- 64.89 -- 64.89 $ (3.18) $ 69.62 $ (8.63) $ 63.35 Distributions per limited partnership unit $ -- $ 25.51 $ 5.92 $ 25.51 See Accompanying Notes to Consolidated Financial Statements
CENTURY PROPERTIES FUND XIX CONSOLIDATED STATEMENT OF PARTNERS' (DEFICIENCY) CAPITAL (Unaudited) (in thousands, except unit data)
Limited Partnership General Limited Units Partner Partners Total Original capital contributions 89,292 $ -- $89,292 $ 89,292 Partners' (deficiency) capital at December 31, 2003 89,292 $(9,802) $ 3,001 $ (6,801) Distributions paid to partners -- (71) (529) (600) Net loss for the nine months ended September 30, 2004 -- (104) (771) (875) Partners' (deficiency) capital at September 30, 2004 89,292 $(9,977) $ 1,701 $ (8,276) See Accompanying Notes to Consolidated Financial Statements
CENTURY PROPERTIES FUND XIX CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (in thousands)
Nine Months Ended September 30, 2004 2003 Cash flows from operating activities: Net (loss) income $ (875) $ 5,756 Adjustments to reconcile net (loss) income to net cash provided by operating activities: Depreciation 2,453 2,703 Amortization of loan costs 81 122 Gain on sale of investment property -- (5,912) Loss on early extinguishment of debt -- 5 Casualty gain -- (171) Change in accounts: Receivables and deposits (122) 725 Other assets (183) (366) Accounts payable (202) 28 Tenant security deposits payable (19) 17 Accrued property taxes 203 (377) Due to affiliates 6 -- Due to former affiliate (376) 5 Other liabilities (16) (720) Net cash provided by operating activities 950 1,815 Cash flows from investing activities: Property improvements and replacements (1,029) (882) Net proceeds from sale of discontinued operations -- 13,249 Net insurance proceeds received -- 171 Net deposits to restricted escrows (58) (772) Net cash (used in) provided by investing activities (1,087) 11,766 Cash flows from financing activities: Payment on mortgage notes payable (877) (1,498) Repayment of mortgage notes payable -- (30,258) Proceeds from mortgage notes payable -- 20,450 Distributions to partners (600) (2,324) Advances received from affiliate 656 2,101 Repayment of advances from affiliate -- (2,101) Loan costs paid -- (653) Net cash used in financing activities (821) (14,283) Net decrease in cash and cash equivalents (958) (702) Cash and cash equivalents at beginning of period 1,250 2,025 Cash and cash equivalents at end of period $ 292 $ 1,323 Supplemental disclosure of cash flow information: Cash paid for interest $ 2,278 $ 3,049 Supplemental disclosure of non-cash flow information: Property improvements and replacements in accounts payable $ 69 $ -- See Accompanying Notes to Consolidated Financial Statements
CENTURY PROPERTIES FUND XIX NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Note A - Basis of Presentation The accompanying unaudited consolidated financial statements of Century Properties Fund XIX (the "Partnership" or "Registrant") have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-QSB and Item 310(b) of Regulation S-B. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. The general partner of the Partnership is Fox Partners II, a California general partnership. The general partners of Fox Partners II are Fox Capital Management Corporation ("FCMC" or the "Managing General Partner"), a California corporation, Fox Realty Investors ("FRI"), a California general partnership, and Fox Partners 83, a California general partnership. The Managing General Partner is a subsidiary of Apartment Investment and Management Company ("AIMCO"), a publicly traded real estate investment trust. In the opinion of the Managing General Partner, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and nine months ended September 30, 2004 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2004. For further information, refer to the consolidated financial statements and footnotes thereto included in the Partnership's Annual Report on Form 10-KSB for the fiscal year ended December 31, 2003. In accordance with Statement of Financial Accounting Standards ("SFAS") No. 144, the consolidated statements of operations for the three and nine months ended September 30, 2003 reflect the operations of McMillan Place Apartments as (loss) income from discontinued operations due to its sale in August 2003. In addition, the accompanying consolidated statements of operations have been restated as of January 1, 2003 to reflect the operations of Misty Woods Apartments as (loss) income from discontinued operations due to the intention of the Managing General Partner to sell the property within one year. Included in (loss) income from discontinued operations for the nine months ended September 30, 2004 and 2003, is approximately $959,000 and $995,000, respectively of revenue generated by the property. The assets and liabilities of Misty Woods Apartments are shown as held for sale on the accompanying consolidated balance sheet. Note B - Transactions with Affiliated Parties The Partnership has no employees and depends on the Managing General Partner and its affiliates for the management and administration of all Partnership activities. The Partnership Agreement provides for (i) certain payments to affiliates for services and (ii) reimbursement of certain expenses incurred by affiliates on behalf of the Partnership. Affiliates of the Managing General Partner are entitled to 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 $471,000 and $556,000 for the nine months ended September 30, 2004 and 2003, respectively, which is included in operating expenses and (loss) income from discontinued operations. An affiliate of the Managing General Partner received reimbursement of accountable administrative expenses amounting to approximately $135,000 and $144,000 for the nine months ended September 30, 2004 and 2003, respectively, which is included in general and administrative expenses. Pursuant to the Partnership Agreement, for managing the affairs of the Partnership, the Managing General Partner is entitled to receive a Partnership management fee equal to 10% of the Partnership's adjusted cash from operations as distributed. During the nine months ended September 30, 2004, approximately $60,000 was paid to the Managing General Partner and is included in distributions to the Managing General Partner. No fee was earned during the nine months ended September 30, 2003 because there were no distributions from operations. An affiliate of the Managing General Partner has made available to the Partnership a credit line of up to $150,000 per property owned by the Partnership. During the nine months ended September 30, 2004, an affiliate of the Managing General Partner advanced the Partnership approximately $656,000. This advance was used to pay property taxes at five of the Partnership's properties. During the nine months ended September 30, 2003, the Managing General Partner exceeded this credit limit and advanced the Partnership approximately $2,101,000. This advance was used to repay the second mortgage encumbering McMillan Place Apartments, which was part of the loan extension agreement. This advance and related accrued interest were paid in full during the nine months ended September 30, 2003 from the proceeds of the sale of McMillan Place Apartments. Interest on the credit line is charged at the prime rate plus 2% and was approximately $6,000 and $66,000 for the nine months ended September 30, 2004 and 2003, respectively. No payments were made on the advance during the nine months ended September 30, 2004. At September 30, 2004, the Partnership owed approximately $662,000 of principal and interest which is shown as due to affiliates on the accompanying consolidated balance sheet. In connection with the refinancings of Vinings Peak, Wood Lake, and Plantation Crossing Apartments on June 25, 2003, the Partnership paid the Managing General Partner a fee of approximately $205,000 pursuant to the Partnership Agreement. This fee was capitalized and included in other assets on the accompanying consolidated balance sheet and is being amortized over the life of the loans. 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 and vehicle liability. The Partnership insures its properties above the AIMCO limits through insurance policies obtained by AIMCO from insurers unaffiliated with the Managing General Partner. During the nine months ended September 30, 2004 and 2003, the Partnership was charged by AIMCO and its affiliates approximately $198,000 and $217,000, respectively, for insurance coverage and fees associated with claims administration. Note C - Extension of Mortgage Note Payable The first and second mortgage loans for McMillan Place Apartments matured in October 2002 and were in default at December 31, 2002. On March 25, 2003, the Managing General Partner and the lender agreed to an eleven month extension of the terms of the mortgage. As part of the agreement, an affiliate of the Managing General Partner advanced approximately $2,101,000 to the Partnership to repay the second mortgage loan. Pursuant to the agreement, the stated interest rate was 6.5% from the previous maturity date. This mortgage indebtedness was paid off during the nine months ended September 30, 2003 with the net sales proceeds of McMillan Place Apartments (see "Note D" below). The mortgage encumbering McMillan Place Apartments required an annual cash flow payment based on a calculation of excess cash generated by the property. During the nine months ended September 30, 2003, the Partnership paid excess cash flow of approximately $839,000 to the mortgage lender. This amount was applied against the outstanding principal balance of the mortgage. Note D - Sale of Investment Property In August 2003, the Partnership sold McMillan Place Apartments to a third party for net proceeds of approximately $13,249,000 after payment of closing costs. The Partnership used approximately $9,128,000 of the net proceeds to repay the mortgage encumbering the property and to pay approximately $210,000 in contingent interest due to the lender. Contingent interest was required to be paid upon the sale of the property equal to 50% of the increase in the appreciated fair market value of the property above the stipulated amount of $12,860,000. The Partnership had previously accrued approximately $920,000 for this contingent interest. The unused reserve was reversed against interest expense during the three months ended September 30, 2003 and is included in (loss) income from discontinued operations. The Partnership realized a gain of approximately $5,912,000 as a result of the sale. The property's operations are shown as (loss) income from discontinued operations and include revenues of approximately $384,000 and $1,594,000 for the three and nine months ended September 30, 2003, respectively. In addition, the Partnership recorded a loss on early extinguishment of debt of approximately $5,000 as a result of unamortized loan costs being written off. This amount is included in (loss) income from discontinued operations. Note E - Casualties In May 2001, one of the Partnership's investment properties, Vinings Peak Apartments, incurred damages to ten units as a result of a fire. As a result of the damage, approximately $369,000 of fixed assets and approximately $222,000 of accumulated depreciation were written off resulting in a net write off of approximately $147,000. The property received approximately $461,000 in proceeds from the insurance company to repair the damaged units during 2002 and recognized a casualty gain of approximately $314,000 as a result of the difference between the proceeds received and the net book value of the buildings which were damaged. During the nine months ended September 30, 2003, the Partnership received additional proceeds of approximately $171,000 which were recognized as a casualty gain because the damaged assets had been written off in 2002. In September 2004, the Partnership's investment property located in Florida, Sunrunner Apartments, sustained damage from Hurricane Frances. At September 30, 2004, the damage is estimated to be approximately $40,000, which will not be covered by insurance proceeds. The Partnership recognized a loss of approximately $7,000 related to the write off of the damaged assets from this casualty, which is included in operating expenses. In addition, during the nine months ended September 30, 2004, the Partnership accrued approximately $17,000 for clean up costs related to the storm, which is also included in operating expenses. Note F - Refinancing of Mortgage Notes Payable On June 25, 2003 the Partnership refinanced the mortgage encumbering Vinings Peak Apartments. The refinancing replaced the previous mortgage indebtedness of approximately $7,785,000 with a new mortgage of $8,470,000. The mortgage was refinanced at a rate of 4.41% compared to the prior rate of 7.50%. Payments of approximately $53,000 are due on the first day of each month. A balloon payment of approximately $5,186,000 is due in July 2013. At the closing, a repair escrow of $334,000 was established and is being held by the mortgage lender. After payment of closing costs of approximately $249,000, which were capitalized and included in other assets, and interest, the Partnership received net proceeds of approximately $96,000. On June 25, 2003 the Partnership refinanced the mortgage encumbering Wood Lake Apartments. The refinancing replaced the previous mortgage indebtedness of approximately $6,703,000 with a new mortgage of $7,500,000. The mortgage was refinanced at a rate of 4.41% compared to the prior rate of 7.50%. Payments of approximately $47,000 are due on the first day of each month. A balloon payment of approximately $4,592,000 is due in July 2013. At the closing, a repair escrow of $295,000 was established and is being held by the mortgage lender. After payment of closing costs of approximately $231,000, which were capitalized and included in other assets, and interest, the Partnership received net proceeds of approximately $377,000. On June 25, 2003 the Partnership refinanced the mortgage encumbering Plantation Crossing Apartments. The refinancing replaced the previous mortgage indebtedness of approximately $4,541,000 with a new mortgage of $4,480,000. The mortgage was refinanced at a rate of 4.41% compared to the prior rate of 7.50%. Payments of approximately $28,000 are due on the first day of each month. A balloon payment of approximately $2,743,000 is due in July 2013. At the closing, a repair escrow of $145,000 was established and is being held by the mortgage lender. After payment of closing costs of approximately $173,000, which were capitalized and included in other assets, and interest, the Partnership had a shortfall of approximately $330,000 which was covered by the net proceeds received from the Wood Lake refinancing discussed above. Note G - Contingencies In March 1998, several putative unit holders of limited partnership units of the Partnership commenced an action entitled Rosalie Nuanes, et al. v. Insignia Financial Group, Inc., et al. (the "Nuanes action") in the Superior Court of the State of California for the County of San Mateo. The plaintiffs named as defendants, among others, the Partnership, its Managing General Partner and several of their affiliated partnerships and corporate entities. The action purported to assert claims on behalf of a class of limited partners and derivatively on behalf of a number of limited partnerships (including the Partnership) that are named as nominal defendants, challenging, among other things, the acquisition of interests in certain Managing General Partner entities by Insignia Financial Group, Inc. ("Insignia") and entities that were, at one time, affiliates of Insignia; past tender offers by the Insignia affiliates to acquire limited partnership units; management of the partnerships by the Insignia affiliates; and the series of transactions which closed on October 1, 1998 and February 26, 1999 whereby Insignia and Insignia Properties Trust, respectively, were merged into AIMCO. The plaintiffs sought monetary damages and equitable relief, including judicial dissolution of the Partnership. In addition, during the third quarter of 2001 a complaint, captioned Heller v. Insignia Financial Group (the "Heller action") was filed against the same defendants that are named in the Nuanes action. On or about August 6, 2001, plaintiffs filed a first amended complaint. The Heller action was brought as a purported derivative action, and asserted claims for, among other things, breach of fiduciary duty, unfair competition, conversion, unjust enrichment, and judicial dissolution. On January 8, 2003, the parties filed a Stipulation of Settlement in proposed settlement of the Nuanes action and the Heller action. In general terms, the proposed settlement provides for certification for settlement purposes of a settlement class consisting of all limited partners in this Partnership and others (the "Partnerships") as of December 20, 2002, the dismissal with prejudice and release of claims in the Nuanes and Heller litigation, payment by AIMCO of $9.9 million (which shall be distributed to settlement class members after deduction of attorney fees and costs of class counsel and certain costs of settlement) and up to $1 million toward the cost of independent appraisals of the Partnerships' properties by a court appointed appraiser. An affiliate of the Managing General Partner has also agreed to make at least one round of tender offers to purchase all of the partnership interests in the Partnerships within one year of final approval, if it is granted, and to provide partners with the independent appraisals at the time of these tenders. The proposed settlement also provided for the limitation of the allowable costs which the Managing General Partner or its affiliates will charge the Partnerships in connection with this litigation and imposes limits on the class counsel fees and costs in this litigation. On April 11, 2003, notice was distributed to limited partners providing the details of the proposed settlement. On June 13, 2003, the court granted final approval of the settlement and entered judgment in both the Nuanes and Heller actions. On August 12, 2003, an objector ("Objector") filed an appeal (the "Appeal") seeking to vacate and/or reverse the order approving the settlement and entering judgment thereto. On November 24, 2003, the Objector filed an application requesting the court order AIMCO to withdraw settlement tender offers it had commenced, refrain from making further offers pending the appeal and auction any units tendered to third parties, contending that the offers did not conform with the terms of the Settlement. Counsel for the Objector (on behalf of another investor) had alternatively requested the court take certain action purportedly to enforce the terms of the settlement agreement. On December 18, 2003, the court heard oral argument on the motions and denied them both in their entirety. The Objector filed a second appeal challenging the court's use of a referee and its order requiring Objector to pay those fees. On January 28, 2004, the Objector filed his opening brief in the Appeal. On April 23, 2004, the Managing General Partner and its affiliates filed a response brief in support of the settlement and the judgment thereto. The plaintiffs have also filed a brief in support of the settlement. On June 4, 2004, Objector filed a reply to the briefs submitted by the Managing General Partner and Plaintiffs. In addition both the Objector and plaintiffs filed briefs in connection with the second appeal. The Court of Appeals heard oral argument on both appeals on September 22, 2004 and took the matters under submission. The Managing General Partner does not anticipate that any costs to the Partnership, whether legal or settlement costs, associated with these cases will be material to the Partnership's overall operations. On August 8, 2003 AIMCO Properties L.P., an affiliate of the Managing General Partner, was served with a complaint in the United States District Court, District of Columbia alleging that AIMCO Properties L.P. willfully violated the Fair Labor Standards Act ("FLSA") by failing to pay maintenance workers overtime for all hours worked in excess of forty per week. On March 5, 2004 the plaintiffs filed an amended complaint also naming NHP Management Company, which is also an affiliate of the Managing General Partner. The complaint is styled as a Collective Action under the FLSA and seeks to certify state subclasses in California, Maryland, and the District of Columbia. Specifically, the plaintiffs contend that AIMCO Properties L.P. failed to compensate maintenance workers for time that they were required to be "on-call". Additionally, the complaint alleges AIMCO Properties L.P. failed to comply with the FLSA in compensating maintenance workers for time that they worked in responding to a call while "on-call". The defendants have filed an answer to the amended complaint denying the substantive allegations. Some discovery has taken place and settlement negotiations continue. Although the outcome of any litigation is uncertain, AIMCO Properties, L.P. does not believe that the ultimate outcome will have a material adverse effect on its financial condition or results of operations. Similarly, the Managing General Partner does not believe that the ultimate outcome will have a material adverse effect on the Partnership's consolidated financial condition or results of operations. The Partnership is unaware of any other pending or outstanding litigation matters involving it or its investment properties that are not of a routine nature arising in the ordinary course of business. As previously disclosed, the Central Regional Office of the United States Securities and Exchange Commission (the "SEC") is conducting a formal investigation relating to certain matters. Although the staff of the SEC is not limited in the areas that it may investigate, AIMCO believes the areas of investigation include AIMCO's miscalculated monthly net rental income figures in third quarter 2003, forecasted guidance, accounts payable, rent concessions, vendor rebates, capitalization of payroll and certain other costs, and tax credit transactions. AIMCO is cooperating fully. AIMCO is not able to predict when the matter will be resolved. AIMCO does not believe that the ultimate outcome will have a material adverse effect on its consolidated financial condition or results of operations. Similarly, the Managing General Partner does not believe that the ultimate outcome will have a material adverse effect on the Partnership's consolidated financial condition or results of operations. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION The matters discussed in this report contain certain forward-looking statements, including, without limitation, statements regarding future financial performance and the effect of government regulations. Actual results may differ materially from those described in the forward-looking statements and will be affected by a variety of risks and factors including, without limitation: national and local economic conditions; the terms of governmental regulations that affect the Registrant and interpretations of those regulations; the competitive environment in which the Registrant operates; financing risks, including the risk that cash flows from operations may be insufficient to meet required payments of principal and interest; real estate risks, including variations of real estate values and the general economic climate in local markets and competition for tenants in such markets; litigation, including costs associated with prosecuting and defending claims and any adverse outcomes, and possible environmental liabilities. Readers should carefully review the Registrant's financial statements and the notes thereto, as well as the risk factors described in the documents the Registrant files from time to time with the Securities and Exchange Commission. The Partnership's investment properties, excluding one property held for sale, consist of six apartment complexes. The following table sets forth the average occupancy of the properties for the nine months ended September 30, 2004 and 2003: Average Occupancy Property 2004 2003 Sunrunner Apartments 93% 93% St. Petersburg, Florida Vinings Peak Apartments 91% 91% Atlanta, Georgia Plantation Crossing (1) 91% 94% Atlanta, Georgia Wood Lake Apartments 93% 91% Atlanta, Georgia Greenspoint Apartments (1) 83% 86% Phoenix, Arizona Sandspoint Apartments (2) 88% 79% Phoenix, Arizona (1) The Managing General Partner attributes the decrease in occupancy at Plantation Crossing and Greenspoint Apartments to increased credit standards for prospective tenants. (2) The Managing General Partner attributes the increase in occupancy at Sandspoint Apartments to increased marketing efforts by local management. The Partnership's financial results depend upon a number of factors including the ability to attract and maintain tenants at the investment properties, interest rates on mortgage loans, costs incurred to operate the investment properties, general economic conditions and weather. As part of the ongoing business plan of the Partnership, the Managing General Partner monitors the rental market environment of its investment properties to assess the feasibility of increasing rents, maintaining or increasing occupancy levels and protecting the Partnership from increases in expenses. As part of this plan, the Managing General Partner attempts to protect the Partnership from the burden of inflation-related increases in expenses by increasing rents and maintaining a high overall occupancy level. However, the Managing General Partner may use rental concessions and rental rate reductions to offset softening market conditions, accordingly, there is no guarantee that the Managing General Partner will be able to sustain such a plan. Further, a number of factors that are outside the control of the Partnership such as the local economic climate and weather can adversely or positively affect the Partnership's financial results. Results of Operations The Partnership's net loss for the three and nine months ended September 30, 2004 was approximately $323,000 and $875,000, respectively, compared to net income of approximately $6,390,000 and $5,756,000 for the corresponding periods in 2003. The decrease in net income for the three and nine months ended September 30, 2004 is due to a gain on the sale of one of the Partnership's properties in 2003 and due to a decrease in income from discontinued operations. In accordance with Statement of Financial Accounting Standards No. 144, the accompanying consolidated statements of operations for the three and nine months ended September 30, 2003 reflect the operations of McMillan Place Apartments as (loss) income from discontinued operations due to its sale in August 2003. In addition, the accompanying consolidated statements of operations have been restated as of January 1, 2003 to reflect the operations of Misty Woods Apartments as (loss) income from discontinued operations due to the intention of the Managing General Partner to sell the property. The operations of Misty Woods Apartments, a loss of approximately $149,000 and $121,000 for the nine months ended September 30, 2004 and 2003, respectively, includes revenues of approximately $959,000 and $995,000, respectively. In August 2003, the Partnership sold McMillan Place Apartments to a third party for net proceeds of approximately $13,249,000 after payment of closing costs. The Partnership used approximately $9,128,000 of the net proceeds to repay the mortgage encumbering the property and to pay approximately $210,000 in contingent interest due to the lender. Contingent interest was required to be paid upon the sale of the property equal to 50% of the increase in the appreciated fair market value of the property above the stipulated amount of $12,860,000. The Partnership had previously accrued approximately $920,000 for this contingent interest. The unused reserve was reversed against interest expense during the three months ended September 30, 2003 and is included in (loss) income from discontinued operations. The Partnership realized a gain of approximately $5,912,000 as a result of the sale. The property's operations are shown as (loss) income from discontinued operations and include revenues of approximately $384,000 and $1,594,000 for the three and nine months ended September 30, 2003, respectively. In addition, the Partnership recorded a loss on early extinguishment of debt of approximately $5,000 as a result of unamortized loan costs being written off. This amount is included in (loss) income from discontinued operations. Excluding the impact of the gain on sale and the (loss) income from discontinued operations, the Partnership's loss from continuing operations for the three and nine months ended September 30, 2004 was approximately $272,000 and $726,000, respectively, compared to loss from continuing operations of approximately $129,000 and $490,000 for the corresponding periods in 2003. The increase in loss from continuing operations for the three month period is due to an increase in total expenses. The increase in loss from continuing operations for the nine month period is due to a decrease in total revenues. The decrease in total revenues for the nine months ended September 30, 2004 is due to a decrease in rental income and due to the recognition of a casualty gain in 2003 partially offset by an increase in other income. Rental income decreased due to decreases in occupancy at two of the investment properties, decreases in the average rental rate at all of the Partnership's investment properties and increases in bad debt expense at Vinings Peak, Wood Lake and Sandspoint Apartments partially offset by an increase in occupancy at Wood Lake and Sandspoint Apartments and decreases in bad debt expense at Plantation Crossing and Greenspoint Apartments. Other income increased due to an increase in lease cancellation fees at three of the investment properties and an increase in utilities reimbursements at Sandspoint, Greenspoint, and Vinings Peak Apartments partially offset by a decrease in late charges at Plantation Crossing Apartments. In May 2001, one of the Partnership's investment properties, Vinings Peak Apartments, incurred damages to ten units as a result of a fire. As a result of the damage, approximately $369,000 of fixed assets and approximately $222,000 of accumulated depreciation were written off resulting in a net write off of approximately $147,000. The property received approximately $461,000 in proceeds from the insurance company to repair the damaged units during 2002 and recognized a casualty gain of approximately $314,000 as a result of the difference between the proceeds received and the net book value of the buildings which were damaged. During the nine months ended September 30, 2003, the Partnership received additional proceeds of approximately $171,000 which were recognized as a casualty gain because the damaged assets had been written off in 2002. In September 2004, the Partnership's investment property located in Florida, Sunrunner Apartments, sustained damage from Hurricane Frances. At September 30, 2004, the damage is estimated to be approximately $40,000, which will not be covered by insurance proceeds. The Partnership recognized a loss of approximately $7,000 related to the write off of the damaged assets from this casualty, which is included in operating expenses. In addition, during the nine months ended September 30, 2004, the Partnership accrued approximately $17,000 for clean up costs related to the storm, which is also included in operating expenses. Total expenses for the three months ended September 30, 2004 increased due to increases in operating and depreciation expenses partially offset by a decrease in interest expense. Total expenses for the nine months ended September 30, 2004 remained relatively constant due to increases in operating and depreciation expenses which were offset by a decrease in interest expense. Operating expense increased due to increases in advertising and property expenses partially offset by a decrease in maintenance expense. Advertising expense increased due to increases in referral fees and leasing promotions at Greenspoint Apartments. Property expense increased due to increases in payroll and related expenses at most of the Partnership's investment properties and an increase in employee unit expense at Sandspoint Apartments. Maintenance expense decreased due to a decrease in contract labor at most of the investment properties. Depreciation expense increased due to assets placed in service, primarily at Plantation Crossing and Sandspoint Apartments. Interest expense decreased for the three and nine month periods due to the refinancing of three of the Partnership's properties during 2003. Included in general and administrative expense at both September 30, 2004 and 2003 are management reimbursements to the Managing General Partner as allowed under the Partnership Agreement. In addition, costs associated with the quarterly and annual communications with investors and regulatory agencies and the annual audit required by the Partnership Agreement are also included. Liquidity and Capital Resources At September 30, 2004, the Partnership had cash and cash equivalents of approximately $292,000 compared to approximately $1,323,000 at September 30, 2003. For the nine months ended September 30, 2004, cash and cash equivalents decreased approximately $958,000 due to approximately $1,087,000 of cash used in investing activities and approximately $821,000 of cash used in financing activities partially offset by approximately $950,000 of cash provided by operating activities. Net cash used in investing activities consisted of property improvements and replacements and net deposits to restricted escrows. Net cash used in financing activities consisted of principal payments on the mortgages encumbering the Partnership's properties and distributions to partners, partially offset by advances from an affiliate of the Managing General Partner. The Partnership invests its working capital reserves in interest bearing accounts. The sufficiency of existing liquid assets to meet future liquidity and capital expenditure requirements is directly related to the level of capital expenditures required at the properties to adequately maintain the physical assets and other operating needs of the Partnership and to comply with Federal, state, and local legal and regulatory requirements. The Managing General Partner monitors developments in the area of legal and regulatory compliance. For example, the Sarbanes-Oxley Act of 2002 mandates or suggests additional compliance measures with regard to governance, disclosure, audit and other areas. In light of these changes, the Partnership expects that it will incur higher expenses related to compliance. Capital improvements planned for each of the Partnership's properties are detailed below. Sunrunner Apartments During the nine months ended September 30, 2004, the Partnership completed approximately $79,000 of capital improvements at Sunrunner Apartments, consisting primarily of major landscaping, furniture, parking lot resurfacing, structural improvements and floor covering and appliance replacements. These improvements were funded from operating cash flow. The Partnership evaluates the capital improvement needs of the property during the year and currently expects to complete an additional $49,000 in capital improvements during the remainder of 2004. Additional capital improvements may be considered and will depend on the physical condition of the property as well as the anticipated cash flow generated by the property. Misty Woods Apartments During the nine months ended September 30, 2004, the Partnership completed approximately $96,000 of capital improvements at Misty Woods Apartments, consisting primarily of floor covering and cabinet replacements, fencing, retaining walls and an irrigation system. These improvements were funded from operating cash flow. The Managing General Partner intends to sell the property. Vinings Peak Apartments During the nine months ended September 30, 2004, the Partnership completed approximately $102,000 of capital improvements at Vinings Peak Apartments, consisting primarily of structural improvements and floor covering and appliance replacements. These improvements were funded from operating cash flow. The Partnership evaluates the capital improvement needs of the property during the year and currently expects to complete an additional $58,000 in capital improvements during the remainder of 2004. Additional capital improvements may be considered and will depend on the physical condition of the property as well as replacement reserves and the anticipated cash flow generated by the property. Plantation Crossing Apartments During the nine months ended September 30, 2004, the Partnership completed approximately $180,000 of capital improvements at Plantation Crossing Apartments, consisting primarily of exterior painting, swimming pool enhancements, fitness equipment, and floor covering and appliance replacements. These improvements were funded from operating cash flow. The Partnership evaluates the capital improvement needs of the property during the year and currently expects to complete an additional $11,000 in capital improvements during the remainder of 2004. Additional capital improvements may be considered and will depend on the physical condition of the property as well as replacement reserves and the anticipated cash flow generated by the property. Wood Lake Apartments During the nine months ended September 30, 2004, the Partnership completed approximately $81,000 of capital improvements at Wood Lake Apartments, consisting primarily of floor and wall covering replacements, structural improvements and roof repairs. These improvements were funded from operating cash flow. The Partnership evaluates the capital improvement needs of the property during the year and currently expects to complete an additional $46,000 in capital improvements during the remainder of 2004. Additional capital improvements may be considered and will depend on the physical condition of the property as well as replacement reserves and the anticipated cash flow generated by the property. Greenspoint Apartments During the nine months ended September 30, 2004, the Partnership completed approximately $107,000 of capital improvements at Greenspoint Apartments, consisting primarily of floor covering, plumbing fixture and appliance replacements. These improvements were funded from operating cash flow. The Partnership evaluates the capital improvement needs of the property during the year and currently expects to complete an additional $83,000 in capital improvements during the remainder of 2004. Additional capital improvements may be considered and will depend on the physical condition of the property as well as the anticipated cash flow generated by the property. Sandspoint Apartments During the nine months ended September 30, 2004, the Partnership completed approximately $453,000 of capital improvements at Sandspoint Apartments, consisting primarily of exterior painting and floor covering, appliance and roof replacements. The Partnership evaluates the capital improvement needs of the property during the year and currently expects to complete an additional $52,000 in capital improvements during the remainder of 2004. Additional capital improvements may be considered and will depend on the physical condition of the property as well as the anticipated cash flow generated by the property. The additional capital expenditures will be incurred only if cash is available from operations or from Partnership reserves. To the extent that such budgeted capital improvements are completed, the Partnership's distributable cash flow, if any, may be adversely affected at least in the short term. The first and second mortgage loans for McMillan Place Apartments matured in October 2002 and were in default at December 31, 2002. On March 25, 2003, the Managing General Partner and the lender agreed to an eleven month extension of the terms of the mortgage. As part of the agreement, an affiliate of the Managing General Partner advanced approximately $2,101,000 to the Partnership to repay the second mortgage loan. Pursuant to the agreement, the stated interest rate was 6.5% from the previous maturity date. As previously discussed, McMillan Place Apartments was sold in August 2003 and the first mortgage was repaid at that time. On June 25, 2003 the Partnership refinanced the mortgage encumbering Vinings Peak Apartments. The refinancing replaced the previous mortgage indebtedness of approximately $7,785,000 with a new mortgage of $8,470,000. The mortgage was refinanced at a rate of 4.41% compared to the prior rate of 7.50%. Payments of approximately $53,000 are due on the first day of each month. A balloon payment of approximately $5,186,000 is due in July 2013. At the closing, a repair escrow of $334,000 was established and is being held by the mortgage lender. After payment of closing costs of approximately $249,000, which were capitalized and included in other assets, and interest, the Partnership received net proceeds of approximately $96,000. On June 25, 2003 the Partnership refinanced the mortgage encumbering Wood Lake Apartments. The refinancing replaced the previous mortgage indebtedness of approximately $6,703,000 with a new mortgage of $7,500,000. The mortgage was refinanced at a rate of 4.41% compared to the prior rate of 7.50%. Payments of approximately $47,000 are due on the first day of each month. A balloon payment of approximately $4,592,000 is due in July 2013. At the closing, a repair escrow of $295,000 was established and is being held by the mortgage lender. After payment of closing costs of approximately $231,000, which were capitalized and included in other assets, and interest, the Partnership received net proceeds of approximately $377,000. On June 25, 2003 the Partnership refinanced the mortgage encumbering Plantation Crossing Apartments. The refinancing replaced the previous mortgage indebtedness of approximately $4,541,000 with a new mortgage of $4,480,000. The mortgage was refinanced at a rate of 4.41% compared to the prior rate of 7.50%. Payments of approximately $28,000 are due on the first day of each month. A balloon payment of approximately $2,743,000 is due in July 2013. At the closing, a repair escrow of $145,000 was established and is being held by the mortgage lender. After payment of closing costs of approximately $173,000, which were capitalized and included in other assets on the consolidated balance sheet, and interest, the Partnership had a shortfall of approximately $330,000 which was covered by the net proceeds received from the Wood Lake refinancing discussed above. The Partnership's assets are thought to be sufficient for any near-term needs (exclusive of capital improvements) of the Partnership. The mortgage indebtedness encumbering Sunrunner Apartments of approximately $4,296,000 matures in September 2021, at which time the loan is scheduled to be fully amortized. The mortgage indebtedness encumbering Greenspoint and Sandspoint Apartments of approximately $17,045,000 matures in May 2005 at which time balloon payments of approximately $16,862,000 are required. The mortgage indebtedness encumbering Vinings Peak, Plantation Crossing and Woods Lake Apartments of approximately $19,687,000 matures in July 2013 at which time balloon payments of approximately $12,521,000 are required. The Managing General Partner will attempt to refinance such indebtedness and/or sell the properties prior to such maturity dates. If any property cannot be refinanced or sold for a sufficient amount, the Partnership will risk losing such property through foreclosure. The following table sets forth the distributions made by the Partnership for the nine months ended September 30, 2004 and 2003 (in thousands, except per unit data):
Per Limited Per Limited Nine Months Ended Partnership Nine Months Ended Partnership September 30, 2004 Unit September 30, 2003 Unit Operations $ 600 $ 5.92 $ -- $ -- Sales (1) -- -- 2,324 25.51 $ 600 $ 5.92 $2,324 $25.51
(1) Proceeds from the sale of McMillan Place Apartments. Future cash distributions will depend on the levels of net cash generated from operations, the availability of cash reserves and the timing of debt maturities, refinancings, and/or property sales. The Partnership's cash available for distribution is reviewed on a monthly basis. There can be no assurance, however, that the Partnership will generate sufficient funds from operations after required capital expenditures to permit additional distributions to its partners in 2004 or subsequent periods. Other In addition to its indirect ownership of the general partner interest in the Partnership, AIMCO and its affiliates owned 53,726.66 limited partnership units (the "Units") in the Partnership representing 60.17% of the outstanding Units at September 30, 2004. A number of these Units were acquired pursuant to tender offers made by AIMCO or its affiliates. It is possible that AIMCO or its affiliates will acquire additional Units in exchange for cash or a combination of cash and units in AIMCO Properties, L.P., the operating partnership of AIMCO, either through private purchases or tender offers. Pursuant to the Partnership Agreement, unitholders holding a majority of the Units are entitled to take action with respect to a variety of matters that include, but are not limited to, voting on certain amendments to the Partnership Agreement and voting to remove the Managing General Partner. As a result of its ownership of 60.17% of the outstanding Units, AIMCO and its affiliates are in a position to influence all such voting decisions with respect to the Partnership. However, with respect to the 25,228.66 Units acquired on January 19, 1996, AIMCO IPLP, L.P. (formerly known as Insignia Properties, LP ("IPLP"), an affiliate of the Managing General Partner and of AIMCO, agreed to vote such Units: (i) against any increase in compensation payable to the Managing General Partner or to its affiliates; and (ii) on all other matters submitted by it or its affiliates, in proportion to the vote cast by third party unitholders. Except for the foregoing, no other limitations are imposed on IPLP's, AIMCO's or any other affiliates' right to vote each Unit held. Although the Managing General Partner owes fiduciary duties to the limited partners of the Partnership, the Managing General Partner also owes fiduciary duties to AIMCO as its sole stockholder. As a result, the duties of the Managing General Partner, as managing general partner, to the Partnership and its limited partners may come into conflict with the duties of the Managing General Partner to AIMCO as its sole stockholder. Critical Accounting Policies and Estimates The consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States, which require the Partnership to make estimates and assumptions. The Partnership believes that of its significant accounting policies, the following may involve a higher degree of judgment and complexity. Impairment of Long-Lived Assets The investment properties are recorded at cost, less accumulated depreciation, unless considered impaired. If events or circumstances indicate that the carrying amount of the property may be impaired, the Partnership will make an assessment of its recoverability by estimating the undiscounted future cash flows, excluding interest charges, of the property. If the carrying amount exceeds the aggregate future cash flows, the Partnership would recognize an impairment loss to the extent the carrying amount exceeds the fair value of the property. Real property investments are subject to varying degrees of risk. Several factors may adversely affect the economic performance and value of the Partnership's investment properties. These factors include, but are not limited to, changes in the national, regional and local economic climate; local conditions, such as an oversupply of multifamily properties; competition from other available multifamily property owners and changes in market rental rates. Any adverse changes in these factors could cause impairment of the Partnership's assets. Revenue Recognition The Partnership generally leases apartment units for twelve-month terms or less. Rental income attributable to leases is recognized monthly as it is earned. The Partnership evaluates all accounts receivable from residents and establishes an allowance, after the application of security deposits, for accounts greater than 30 days past due on current tenants and all receivables due from former tenants. The Partnership will offer rental concessions during particularly slow months or in response to heavy competition from other similar complexes in the area. Any concessions given at the inception of the lease are amortized over the life of the lease. ITEM 3. CONTROLS AND PROCEDURES (a) Disclosure Controls and Procedures. The Partnership's management, with the participation of the principal executive officer and principal financial officer of the Managing General Partner, who are the equivalent of the Partnership's principal executive officer and principal financial officer, respectively, has evaluated the effectiveness of the Partnership's disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) as of the end of the period covered by this report. Based on such evaluation, the principal executive officer and principal financial officer of the Managing General Partner, who are the equivalent of the Partnership's principal executive officer and principal financial officer, respectively, have concluded that, as of the end of such period, the Partnership's disclosure controls and procedures are effective. (b) Internal Control Over Financial Reporting. There have not been any changes in the Partnership's internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, the Partnership's internal control over financial reporting. PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS In March 1998, several putative unit holders of limited partnership units of the Partnership commenced an action entitled Rosalie Nuanes, et al. v. Insignia Financial Group, Inc., et al. (the "Nuanes action") in the Superior Court of the State of California for the County of San Mateo. The plaintiffs named as defendants, among others, the Partnership, its Managing General Partner and several of their affiliated partnerships and corporate entities. The action purported to assert claims on behalf of a class of limited partners and derivatively on behalf of a number of limited partnerships (including the Partnership) that are named as nominal defendants, challenging, among other things, the acquisition of interests in certain Managing General Partner entities by Insignia Financial Group, Inc. ("Insignia") and entities that were, at one time, affiliates of Insignia; past tender offers by the Insignia affiliates to acquire limited partnership units; management of the partnerships by the Insignia affiliates; and the series of transactions which closed on October 1, 1998 and February 26, 1999 whereby Insignia and Insignia Properties Trust, respectively, were merged into AIMCO. The plaintiffs sought monetary damages and equitable relief, including judicial dissolution of the Partnership. In addition, during the third quarter of 2001 a complaint captioned Heller v. Insignia Financial Group (the "Heller action") was filed against the same defendants that are named in the Nuanes action. On or about August 6, 2001, plaintiffs filed a first amended complaint. The Heller action was brought as a purported derivative action, and asserted claims for, among other things, breach of fiduciary duty, unfair competition, conversion, unjust enrichment, and judicial dissolution. On January 8, 2003, the parties filed a Stipulation of Settlement in proposed settlement of the Nuanes action and the Heller action. In general terms, the proposed settlement provides for certification for settlement purposes of a settlement class consisting of all limited partners in this Partnership and others (the "Partnerships") as of December 20, 2002, the dismissal with prejudice and release of claims in the Nuanes and Heller litigation, payment by AIMCO of $9.9 million (which shall be distributed to settlement class members after deduction of attorney fees and costs of class counsel and certain costs of settlement) and up to $1 million toward the cost of independent appraisals of the Partnerships' properties by a court appointed appraiser. An affiliate of the Managing General Partner has also agreed to make at least one round of tender offers to purchase all of the partnership interests in the Partnerships within one year of final approval, if it is granted, and to provide partners with the independent appraisals at the time of these tenders. The proposed settlement also provided for the limitation of the allowable costs which the Managing General Partner or its affiliates will charge the Partnerships in connection with this litigation and imposes limits on the class counsel fees and costs in this litigation. On April 11, 2003, notice was distributed to limited partners providing the details of the proposed settlement. On June 13, 2003, the court granted final approval of the settlement and entered judgment in both the Nuanes and Heller actions. On August 12, 2003, an objector ("Objector") filed an appeal (the "Appeal") seeking to vacate and/or reverse the order approving the settlement and entering judgment thereto. On November 24, 2003, the Objector filed an application requesting the court order AIMCO to withdraw settlement tender offers it had commenced, refrain from making further offers pending the appeal and auction any units tendered to third parties, contending that the offers did not conform with the terms of the settlement. Counsel for the Objector (on behalf of another investor) had alternatively requested the court take certain action purportedly to enforce the terms of the settlement agreement. On December 18, 2003, the court heard oral argument on the motions and denied them both in their entirety. The Objector filed a second appeal challenging the court's use of a referee and its order requiring Objector to pay those fees. On January 28, 2004, the Objector filed his opening brief in the Appeal. On April 23, 2004, the Managing General Partner and its affiliates filed a response brief in support of the settlement and the judgment thereto. The plaintiffs have also filed a brief in support of the settlement. On June 4, 2004, Objector filed a reply to the briefs submitted by the Managing General Partner and Plaintiffs. In addition both the Objector and plaintiffs filed briefs in connection with the second appeal. The Court of Appeals heard oral argument on both appeals on September 22, 2004 and took the matters under submission. The Managing General Partner does not anticipate that any costs to the Partnership, whether legal or settlement costs, associated with these cases will be material to the Partnership's overall operations. On August 8, 2003 AIMCO Properties L.P., an affiliate of the Managing General Partner, was served with a complaint in the United States District court, District of Columbia alleging that AIMCO Properties L.P. willfully violated the Fair Labor Standards Act ("FLSA") by failing to pay maintenance workers overtime for all hours worked in excess of forty per week. On March 5, 2004 the plaintiffs filed an amended complaint also naming NHP Management Company, which is also an affiliate of the Managing General Partner. The complaint is styled as a Collective Action under the FLSA and seeks to certify state subclasses in California, Maryland, and the District of Columbia. Specifically, the plaintiffs contend that AIMCO Properties L.P. failed to compensate maintenance workers for time that they were required to be "on-call". Additionally, the complaint alleges AIMCO Properties L.P. failed to comply with the FLSA in compensating maintenance workers for time that they worked in responding to a call while "on-call". The defendants have filed an answer to the amended complaint denying the substantive allegations. Some discovery has taken place and settlement negotiations continue. Although the outcome of any litigation is uncertain, AIMCO Properties, L.P. does not believe that the ultimate outcome will have a material adverse effect on its financial condition or results of operations. Similarly, the Managing General Partner does not believe that the ultimate outcome will have a material adverse effect on the Partnership's consolidated financial condition or results of operations. ITEM 6. EXHIBITS See Exhibit Index attached. SIGNATURES In accordance with the requirements of the Exchange Act, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. CENTURY PROPERTIES FUND XIX By: FOX PARTNERS II Its General Partner By: FOX CAPITAL MANAGEMENT CORPORATION Its Managing General Partner By: /s/Martha L. Long Martha L. Long Senior Vice President By: /s/Stephen B. Waters Stephen B. Waters Vice President Date: November 12, 2004 CENTURY PROPERTIES INCOME FUND XIX EXHIBIT INDEX Exhibit Number Description of Exhibit 2.1 NPI, Inc. Stock Purchase Agreement, dated as of August 7, 1995, incorporated by reference to the Registrant's Current Report on Form 8-K dated August 7, 1995. 2.2 Partnership Units Purchase Agreement dated as of August 17, 1995, incorporated by reference to Exhibit 2.1 to Form 8-K filed by Insignia Financial Group, Inc. ("Insignia") with the Securities and Exchange Commission on September 1, 1995. 2.3 Management Purchase Agreement dated as of August 17, 1995, incorporated by reference to Exhibit 2.2 to Form 8-K filed by Insignia with the Securities and Exchange Commission on September 1, 1995. 2.4 Agreement and Plan of Merger, dated as of October 1, 1998, by and between AIMCO and IPT (incorporated by reference to Exhibit 2.1 of Registrant's Current Report on Form 8-K dated October 1, 1998). 3.4 Agreement of Limited Partnership, incorporated by reference to Exhibit A to the Prospectus of the Partnership dated September 20, 1983, as amended on June 13, 1989, and as thereafter supplemented contained in the Registrant's Registration Statement on Form S-11 (Reg. No. 2-79007). 3.5 Amendment to the Amended and Restated Limited Partnership Agreement, dated September 29, 2003, incorporated by reference to Exhibit 3.5 on Form 8-K dated September 29, 2003. 10.7 First Mortgage Note from the Registrant to Secore Financial Corporation ("Secore") relating to the refinancing of Misty Woods Apartments incorporated by reference to Exhibit 10.7 to the Partnership's Annual Report on Form 10-K for the year ended December 31, 1995. 10.8 First Mortgage and Security Agreement dated as of December 29, 1995, from the Registrant to Secore relating to the refinancing of Misty Woods Apartments incorporated by reference to Exhibit 10.8 to the Partnership Annual Report on Form 10-K for the year ended December 31, 1995. 10.12 Multifamily Note dated August 30, 2001 between GMAC Commercial Mortgage Corporation and Century Properties Fund XIX for the refinance of Sunrunner Apartments, incorporated by reference to Exhibit 10.12 on Form 8-K dated August 30, 2001. 10.13 Multifamily Note for $4,480,000 dated June 25, 2003 between Century Properties Fund XIX and KeyCorp Real Estate Capital Markets, Inc., incorporated by reference to Exhibit 10.13 to Form 8-K dated June 25, 2003. 10.14 Replacement Reserve Agreement dated June 25, 2003 between Century Properties Fund XIX and KeyCorp Real Estate Capital Markets, Inc., incorporated by reference to Exhibit 10.14 to Form 8-K dated June 25, 2003. 10.15 Repair Escrow Agreement dated June 25, 2003 between Century Properties Fund XIX and KeyCorp Real Estate Capital Markets, Inc., incorporated by reference to Exhibit 10.15 to Form 8-K dated June 25, 2003. 10.16 Multifamily Note for $8,470,000 dated June 25, 2003 between Century Properties Fund XIX and KeyCorp Real Estate Capital Markets, Inc., incorporated by reference to Exhibit 10.16 to Form 8-K dated June 25, 2003. 10.17 Replacement Reserve Agreement dated June 25, 2003 between Century Properties Fund XIX and KeyCorp Real Estate Capital Markets, Inc., incorporated by reference to Exhibit 10.17 to Form 8-K dated June 25, 2003. 10.18 Repair Escrow Agreement dated June 25, 2003 between Century Properties Fund XIX and KeyCorp Real Estate Capital Markets, Inc., incorporated by reference to Exhibit 10.18 to Form 8-K dated June 25, 2003. 10.19 Multifamily Note for $7,500,000 dated June 25, 2003 between Century Properties Fund XIX and KeyCorp Real Estate Capital Markets, Inc., incorporated by reference to Exhibit 10.19 to Form 8-K dated June 25, 2003. 10.20 Replacement Reserve Agreement dated June 25, 2003 between Century Properties Fund XIX and KeyCorp Real Estate Capital Markets, Inc., incorporated by reference to Exhibit 10.20 to Form 8-K dated June 25, 2003. 10.21 Repair Escrow Agreement dated June 25, 2003 between Century Properties Fund XIX and KeyCorp Real Estate Capital Markets, Inc., incorporated by reference to Exhibit 10.21 to Form 8-K dated June 25, 2003. 10.22 Purchase and Sale Contract between Registrant and Suncase Corporation, dated June 11, 2003, incorporated by reference to Exhibit 10.22 to Form 8-K dated August 28, 2003. 10.23 First Amendment to the Purchase and Sale Contract between Registrant and Suncase Corporation, dated July 10, 2003, incorporated by reference to Exhibit 10.23 to Form 8-K dated August 28, 2003. 10.24 Second Amendment to the Purchase and Sale Contract between Registrant and Suncase Corporation, dated August 13, 2003, incorporated by reference to Exhibit 10.24 to Form 8-K dated August 28, 2003. 10.25 Assignment Agreement between Suncase Corporate and McMillan Development Associates, LP dated August 25, 2003, incorporated by reference to Exhibit 10.25 to Form 8-K dated August 28, 2003. 31.1 Certification of equivalent of Chief Executive Officer pursuant to Securities Exchange Act Rules 13a-14(a)/15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 31.2 Certification of equivalent of Chief Financial Officer pursuant to Securities Exchange Act Rules 13a-14(a)/15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32.1 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Exhibit 31.1 CERTIFICATION I, Martha L. Long, certify that: 1. I have reviewed this quarterly report on Form 10-QSB of Century Properties Fund XIX; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods presented in this report; 4. The small business issuer's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the small business issuer and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Evaluated the effectiveness of the small business issuer's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (c) Disclosed in this report any change in the small business issuer's internal control over financial reporting that occurred during the small business issuer's most recent fiscal quarter (the small business issuer's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer's internal control over financial reporting; and 5. The small business issuer's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer's auditors and the audit committee of the small business issuer's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the small business issuer's ability to record, process, summarize and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer's internal control over financial reporting. Date: November 12, 2004 /s/Martha L. Long Martha L. Long Senior Vice President of Fox Capital Management Corporation, equivalent of the chief executive officer of the Partnership Exhibit 31.2 CERTIFICATION I, Stephen B. Waters, certify that: 1. I have reviewed this quarterly report on Form 10-QSB of Century Properties Fund XIX; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods presented in this report; 4. The small business issuer's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the small business issuer and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Evaluated the effectiveness of the small business issuer's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (c) Disclosed in this report any change in the small business issuer's internal control over financial reporting that occurred during the small business issuer's most recent fiscal quarter (the small business issuer's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer's internal control over financial reporting; and 5. The small business issuer's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer's auditors and the audit committee of the small business issuer's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the small business issuer's ability to record, process, summarize and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer's internal control over financial reporting. Date: November 12, 2004 /s/Stephen B. Waters Stephen B. Waters Vice President of Fox Capital Management Corporation, equivalent of the chief financial officer of the Partnership Exhibit 32.1 Certification of CEO and CFO Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 In connection with the Quarterly Report on Form 10-QSB of Century Properties Fund XIX (the "Partnership"), for the quarterly period ended September 30, 2004 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), Martha L. Long, as the equivalent of the chief executive officer of the Partnership, and Stephen B. Waters, as the equivalent of the chief financial officer of the Partnership, each hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of his knowledge: (1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Partnership. /s/Martha L. Long Name: Martha L. Long Date: November 12, 2004 /s/Stephen B. Waters Name: Stephen B. Waters Date: November 12, 2004 This certification is furnished with this Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed filed by the Partnership for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.