FORM 10-QSB—QUARTERLY OR TRANSITIONAL REPORT UNDER SECTION 13 OR 15(d) OF

-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, J76Zm3r85kN/wk+aUGWZxZK7MQO7CwZ4F8Qr1OXoSD01aFzB992u5ZLBSShbRU/w iJ46mdaVHtqw7deOAusNKw== 0000711642-07-000417.txt : 20071114 0000711642-07-000417.hdr.sgml : 20071114 20071114152910 ACCESSION NUMBER: 0000711642-07-000417 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20070930 FILED AS OF DATE: 20071114 DATE AS OF CHANGE: 20071114 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CENTURY PROPERTIES FUND XIX CENTRAL INDEX KEY: 0000705752 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 942887133 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-11935 FILM NUMBER: 071244189 BUSINESS ADDRESS: STREET 1: 55 BEATTIE PLACE STREET 2: P O BOX 1089 CITY: GREENVILLE STATE: SC ZIP: 29602 BUSINESS PHONE: 8642391000 MAIL ADDRESS: STREET 1: 55 BEATTIE PLACE STREET 2: P O BOX 1089 CITY: GREENVILLE STATE: SC ZIP: 29602 10QSB 1 cpf19907.htm FORM 10-QSB—QUARTERLY OR TRANSITIONAL REPORT UNDER SECTION 13 OR 15(d) OF

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, 2007

[ ]

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 (1) 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 ___

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes __ No X_

PART I – FINANCIAL INFORMATION

ITEM 1.

FINANCIAL STATEMENTS

CENTURY PROPERTIES FUND XIX

CONSOLIDATED BALANCE SHEET

(Unaudited)

(in thousands, except per unit data)

September 30, 2007


Assets
Cash and cash equivalents		$ 344
Receivables and deposits		268
Other assets		1,240
Investment properties:
Land	$ 6,627
Buildings and related personal property	79,430
	86,057
Less accumulated depreciation	(46,758)	39,299
		$ 41,151
Liabilities and Partners' Deficit
Liabilities
Accounts payable		$ 2,069
Tenant security deposits payable		257
Accrued property taxes		336
Other liabilities		392
Due to affiliates (Note B)		9,674
Mortgage notes payable		38,072

Partners' Deficit
General partner	$ (8,390)
Limited partners (89,287 units issued and
outstanding)	(1,259)	(9,649)
		$ 41,151

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,
	2007	2006	2007	2006

Revenues:
Rental income	$ 2,324	$ 2,326	$ 7,014	$ 6,797
Other income	238	281	758	815
Total revenues	2,562	2,607	7,772	7,612

Expenses:
Operating	1,473	1,313	4,168	3,826
General and administrative	104	106	316	333
Depreciation	1,026	686	2,680	1,961
Interest	606	470	1,776	1,335
Property tax	192	189	619	494
Total expenses	3,401	2,764	9,559	7,949

Loss before discontinued
operations and casualty gain	(839)	(157)	(1,787)	(337)
Casualty gain (Note C)	21	--	21	23
Income (loss) from discontinued
operations (Note A and D)	--	9	--	(230)
Gain on sale of discontinued
operations (Note D)	--	--	--	17,314
Net (loss) income	$ (818)	$ (148)	$(1,766)	$16,770

Net (loss) income allocated to
general partner	$ (97)	$ (17)	$ (209)	$ 1,979
Net (loss) income allocated to
limited partners	(721)	(131)	(1,557)	14,791
	$ (818)	$ (148)	$(1,766)	$16,770
Per limited partnership unit:
Loss from continuing
operations	$ (8.08)	$ (1.57)	$(17.44)	$ (3.10)
Income (loss) from discontinued
operations	--	0.10	--	(2.27)
Gain on sale of discontinued
operations	--	--	--	171.02
	$ (8.08)	$ (1.47)	$(17.44)	$165.65
Distributions per limited
partnership unit	$ --	$ 45.48	$ --	$195.92

See Accompanying Notes to Consolidated Financial Statements

CENTURY PROPERTIES FUND XIX

CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' DEFICIT

(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, 2006	89,287	$ (8,181)	$ 298	$ (7,883)

Net loss for the nine months
ended September 30, 2007	--	(209)	(1,557)	(1,766)

Partners' deficit
at September 30, 2007	89,287	$ (8,390)	$(1,259)	$ (9,649)

See Accompanying Notes to Consolidated Financial Statements

CENTURY PROPERTIES FUND XIX

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(in thousands)


	Nine Months Ended
	September 30,
	2007	2006
Cash flows from operating activities:
Net (loss) income	$(1,766)	$ 16,770
Adjustments to reconcile net (loss) income to net cash
provided by operating activities:
Depreciation	2,680	2,200
Amortization of loan costs	79	89
Casualty gain	(21)	(23)
Loss on early extinguishment of debt	--	78
Gain on sale of investment property	--	(17,314)
Change in accounts:
Receivables and deposits	4	231
Other assets	(295)	133
Accounts payable	148	102
Tenant security deposits payable	36	(39)
Accrued property taxes	255	14
Other liabilities	(49)	(72)
Due to affiliates	537	--
Net cash provided by operating activities	1,608	2,169

Cash flows from investing activities:
Property improvements and replacements	(13,317)	(2,753)
Net proceeds from sale of property	--	25,353
Net insurance proceeds received	25	57
Net withdrawals from restricted escrows	772	412
Net cash (used in) provided by investing activities	(12,520)	23,069

Cash flows from financing activities:
Payment on mortgage notes payable	(771)	(798)
Repayment of mortgage note payable	--	(11,000)
Proceeds from mortgage note payable	3,000	3,050
Distributions to partners	--	(17,851)
Advances received from affiliate	10,875	--
Repayment of advances from affiliate	(1,988)	--
Loan costs paid	(85)	(93)
Net cash provided by (used in) financing activities	11,031	(26,692)

Net increase (decrease) in cash and cash equivalents	119	(1,454)
Cash and cash equivalents at beginning of period	225	2,568
Cash and cash equivalents at end of period	$ 344	$ 1,114

Supplemental disclosure of cash flow information:
Cash paid for interest, net of capitalized interest	$ 1,294	$ 1,477
Supplemental disclosure of non-cash flow information:
Property improvements and replacements in accounts
payable	$ 1,629	$ 243

Approximately $2,692,000 and $681,000 of property improvements and replacements included in accounts payable at December 31, 2006 and 2005, respectively, were included in property improvements and replacements for the nine months ended September 30, 2007 and 2006.

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 Man agement 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 month periods ended September 30, 2007 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2007. 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, 2006.

In accordance with Statement of Financial Accounting Standards (“SFAS”) No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets”, the accompanying consolidated statements of operations for the three and nine months ended September 30, 2006 reflect the operations of Sandspoint Apartments as income (loss) from discontinued operations due to the sale of the property to a third party on April 21, 2006. The operations of Sandspoint Apartments for the three and nine months ended September 30, 2006 was income of approximately $9,000 and a loss of approximately $230,000, respectively, and include approximately zero and $937,000, respectively, of revenues generated by the property.

Certain reclassifications have been made to the 2006 balances to conform to the 2007 presentation.

Recent Accounting Pronouncements

In September 2006, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 157, “Fair Value Measurements”. SFAS No. 157 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the market in which the reporting entity transacts. SFAS No. 157 applies whenever other standards require assets or liabilities to be measured at fair value and does not expand the use of fair value in any new circumstances. SFAS No. 157 establishes a hierarchy that prioritizes the information used in developing fair value estimates. The hierarchy gives the highest priority to quoted prices in active markets and the lowest priority to unobservable data, such as the reporting entity’s own data. SFAS No. 157 requires fair value measurements to be disclosed by level within the fair value hierarchy. SFAS No. 157 is effective for fiscal years beginning after November 15, 2007. The Partnership does not anticipate that the adoption of SFAS No. 157 will have a material effect on the Partnership’s consolidated financial statements.

In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities”. SFAS No. 159 permits entities to choose to measure many financial instruments and certain other items at fair value that are not currently required to be measured at fair value. The objective is to improve financial reporting by providing entities with the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. SFAS No. 159 also establishes presentation and disclosure requirements designed to facilitate comparisons between entities that choose different measurement attributes for similar types of assets and liabilities. SFAS No. 159 is effective for fiscal years beginning after November 15, 2007. The Partnership has not yet determined whether it will elect the fair value option for any of its financ ial instruments.

In June 2007, the American Institute of Certified Public Accountants (“the AICPA”) issued Statement of Position No. 07-1, “Clarification of the Scope of the Audit and Accounting Guide Investment Companies and Accounting by Parent Companies and Equity Method Investors for Investments in Investment Companies” ("SOP 07-1"). SOP 07-1 provides guidance for determining whether the accounting principles of the AICPA Audit and Accounting Guide “Investment Companies” are required to be applied to an entity by clarifying the definition of an investment company and, whether investment company accounting should be retained by a parent company upon consolidation of an investment company subsidiary, or by an investor in the application of the equity method of accounting to an investment company investee. SOP 07-1 applies to reporting periods beginning on or after December 15, 2007; however, the FASB has decided to issue an exposure draft that would indefinitely delay the effective date of SOP 07-1 until the FASB can reassess the provisions of SOP 07-1. The Partnership is currently evaluating the impact, if any, that adoption of SOP 07-1 may have on its consolidated financial statements in the period of adoption.

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 certain payments to affiliates for services and as reimbursement of certain expenses incurred by affiliates on behalf of the Partnership.

Affiliates of the Managing 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 $387,000 and $422,000 for the nine months ended September 30, 2007 and 2006, respectively, which are included in operating expenses and income (loss) from discontinued operations on the accompanying consolidated statements of operations.

An affiliate of the Managing General Partner charged the Partnership reimbursement of accountable administrative expenses amounting to approximately $150,000 and $149,000 for the nine months ended September 30, 2007 and 2006, respectively, which is included in general and administrative expenses. In connection with the redevelopment projects started in 2006 and increased in scope during the nine months ended September 30, 2007 (as discussed in Note G), an affiliate of the Managing General Partner is expected to receive a redevelopment supervision fee of 4% of the actual redevelopment construction costs, or approximately $1,371,000 based on current estimated redevelopment construction costs. The Partnership was charged approximately $437,000 in redevelopment supervision fees during the nine months ended September 30, 2007, which is included in investment properties. No such fees were charged during the nine months ended September 30, 2006. At September 30, 2007, approximately $186,000 in reimbursements was due to the Managing General Partner and is included in due to affiliates on the accompanying consolidated balance sheet.

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. No fee was earned during the nine months ended September 30, 2007 and 2006 as there were no distributions from operations.

There were no such advances during the nine months ended September 30, 2006. Interest on the credit line is charged at the prime rate plus 2% or 9.75% at September 30, 2007. Interest expense was approximately $460,000 for the nine months ended September 30, 2007. During the nine months ended September 30, 2007, the Partnership repaid approximately $2,068,000 of advances and accrued interest from proceeds received in connection with the additional mortgage financing of Greenspoint Apartments. At September 30, 2007 the total advances and accrued interest due to the Corporate General Partner was approximately $9,488,000 and is included in due to affiliates on the accompanying consolidated balance sheet. Subsequent to September 30, 2007, an affiliate of the Managing General Partner advanced the Partnership approximately $3,102,000 to fund operations and redevelopment spending at several of the Partnership’s investment properties. ;

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 Managing General Partner. During the nine months ended September 30, 2007 and 2006, the Partnership was charged by AIMCO and its affiliates approximately $349,000 and $296,000, respectively, for insurance coverage and fees associated with policy claims administration.

Note C – Casualty Gain

In March 2007, Plantation Crossing Apartments experienced damage from a fire. As a result of the damages, approximately $4,000 of undepreciated damaged assets were written off during the nine months ended September 30, 2007. During the nine months ended September 30, 2007 the Partnership received approximately $25,000 in insurance proceeds and recognized a casualty gain of approximately $21,000.

In January 2006, Plantation Crossing Apartments experienced damage from a storm. As a result of the damages, approximately $8,000 of undepreciated damaged assets were written off during the nine months ended September 30, 2006. During the nine months ended September 30, 2006 the Partnership received approximately $31,000 in insurance proceeds and recognized a casualty gain of approximately $23,000.

In September 2005, one of the Partnership’s investment properties, Vinings Peak Apartments, incurred damages as a result of water damage from a water heater. As a result of the damages, approximately $25,000 of undepreciated damaged assets were written off during the year ended December 31, 2005. The Partnership recognized a casualty loss of approximately $2,000 during 2005, which was included in operating expenses. During the nine months ended September 30, 2006, the Partnership received approximately $26,000 in insurance proceeds and recognized a casualty gain of approximately $3,000, which is included in operating expenses.

Note D – Sale of Investment Property

The property’s operations, income of approximately $9,000 and a loss of approximately $230,000 for the three and nine months ended September 30, 2006, respectively, are included in income (loss) from discontinued operations. Also included in income (loss) from discontinued operations are revenues of approximately zero and $937,000 for the three and nine months ended September 30, 2006, respectively. During the three months ended September 30, 2006, certain operating accruals of approximately $9,000 established at the time of the sale were reversed due to actual costs being less than anticipated.

Note E – Modification of Mortgage Note Payable

On March 30, 2007, the Partnership obtained an increase of $6,500,000 to the maximum principal amount available under the existing mortgage on Greenspoint Apartments. Greenspoint Apartments is currently undergoing a redevelopment project, as discussed in Note G. The additional availability under the mortgage is comprised of an initial advance (“Note B”) of $3,000,000 that was made to the Partnership on March 30, 2007, and two earn-out advances of $1,750,000 each (“Note C” and “Note D”), that are available to the Partnership in connection with the redevelopment of the property. To obtain the Note C advance, the Partnership must not have prepaid Note B and must have completed and paid for the portion of the redevelopment improvements with an aggregate cost of at least $6,500,000. The deadline to satisfy the Note C criteria is December 27, 2007. If the Partnership fails to satisfy the conditions fo r obtaining the Note C advance, then the lender shall have no obligation to fund the Note D advance. To obtain the Note D advance, the Partnership must not have prepaid Notes B and C and must have completed and paid for the remaining portion of the redevelopment improvements with an aggregate cost of approximately $2,300,000. The deadline to satisfy the Note D criteria is May 28, 2008.

The existing mortgage agreement, dated May 17, 2005, was modified to reflect the increase in indebtedness from $11,000,000 to $17,500,000. The maturity date and interest rate for the existing mortgage remains unchanged as a result of the modification. Note B has a fixed interest rate of 5.79% per annum, with interest only payments due from May 2007 through October 2008. Note B also requires a one time principal payment of $1,000 on March 1, 2008. Payments of principal and interest shall be made in 300 successive monthly installments commencing on November 1, 2008, and continuing through the maturity date of October 1, 2033. The lender can exercise a call option on the outstanding indebtedness, at its sole discretion, on May 1, 2012, and every fifth anniversary thereafter. The mortgage principal balance at May 2012 will be approximately $2,791,000. The Partnership paid loan costs of approximately $85,000 in connection w ith obtaining the additional financing of $3,000,000, which is capitalized in other assets on the accompanying consolidated balance sheet. Notes C and D each have fixed interest rates of 5.82% per annum, with monthly interest only payments commencing on the first day of the second calendar month following the date of disbursement, until November 1, 2008, when monthly payments of principal and interest shall be made for 300 successive monthly installments continuing through the maturity dates of October 1, 2033.

Note F – Second Mortgage Note Payable

On June 30, 2006, the Partnership obtained an additional mortgage loan in the principal amount of $3,050,000 on its investment property, Tamarind Bay Apartments. The additional mortgage loan requires monthly payments of interest only beginning on August 1, 2006 until July 1, 2009, at a fixed interest rate of 6.31%. From August 1, 2009 through the maturity date of September 1, 2021, the additional mortgage loan requires monthly payments of principal and interest at a fixed interest rate of 6.31% per annum. At maturity, a balloon payment of approximately $2,424,000 is due. The Partnership may prepay the additional mortgage loan at any time with 30 days written notice to the lender subject to a prepayment penalty as defined in the loan agreement. During the nine months ended September 30, 2006, the Partnership paid loan costs of approximately $93,000 in connection with obtaining the additional mortgage loan which is capitalized in other assets on the accompanying consolidated balance sheet.

The terms of the existing mortgage note made by Federal Home Loan Mortgage Corporation were modified as a result of securing the additional mortgage loan described above. The existing mortgage note now carries a fixed interest rate of 7.11% per annum, requires monthly payments of principal and interest of approximately $27,000, and a balloon payment of approximately $2,984,000 is due at maturity in September 2021. The previous mortgage terms were a fixed interest rate of 7.06%, monthly payments of principal and interest of approximately $36,000, and the mortgage was scheduled to be fully amortized at maturity.

Note G – Redevelopment

During the year ended December 31, 2005 the Managing General Partner began a major redevelopment project at Tamarind Bay Apartments. During the year ended December 31, 2006, major redevelopment projects were initiated at Greenspoint Apartments, Vinings Peak Apartments, and Wood Lake Apartments. The properties have had difficulty staying competitive in their respective local markets. Therefore, in an effort to increase occupancy and become competitive in the local markets, significant redevelopment projects have been started and are expected to be completed in 2007 and 2008. During the construction periods, certain expenses are being capitalized and depreciated over the remaining lives of the properties. Included in these construction costs are capitalized interest costs of approximately $230,000 and $39,000, capitalized property tax expense of approximately $30,000 and $6,000, and other construction period operating costs of approximately $15,000 and $2,000 for the nine months ended September 30, 2007 and 2006, respectively.

The total cost of the redevelopment projects is expected to be approximately $41,659,000 of which approximately $16,438,000 was completed at September 30, 2007. The Partnership completed approximately $11,241,000 and $619,000 in costs related to the redevelopments during the nine months ended September 30, 2007 and 2006, respectively. The projects have been funded by advances from an affiliate of the Managing General Partner, financing proceeds, sales proceeds, operating cash flow, and Partnership reserves. It is expected that the redevelopments will continue to be funded from operating cash flow, Partnership reserves, and advances from an affiliate of the Managing General Partner.

Note H – Contingencies

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 28, 2002, the trial court granted defendants motion to strike the complaint. Plaintiffs took an appeal from this order.

On January 8, 2003, the parties filed a Stipulation of Settlement in proposed settlement of the Nuanes action and the Heller action. 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 May 4, 2004, the Objector filed a second appeal challenging the court’s use of a referee and its order requiring Objector to pay those fees.

On March 21, 2005, the Court of Appeals issued opinions in both pending appeals. With regard to the settlement and judgment entered thereto, the Court of Appeals vacated the trial court’s order and remanded to the trial court for further findings on the basis that the “state of the record is insufficient to permit meaningful appellate review”. The matter was transferred back to the trial court on June 21, 2005. With regard to the second appeal, the Court of Appeals reversed the order requiring the Objector to pay referee fees. With respect to the related Heller appeal, on July 28, 2005, the Court of Appeals reversed the trial court’s order striking the first amended complaint.

On August 18, 2005, Objector and his counsel filed a motion to disqualify the trial court based on a peremptory challenge and filed a motion to disqualify for cause on October 17, 2005, both of which were ultimately denied and/or struck by the trial court. On or about October 13, 2005 Objector filed a motion to intervene and on or about October 19, 2005 filed both a motion to take discovery relating to the adequacy of plaintiffs as derivative representatives and a motion to dissolve the anti-suit injunction in connection with settlement. On November 14, 2005, Plaintiffs filed a Motion For Further Findings pursuant to the remand ordered by the Court of Appeals. Defendants joined in that motion. On February 3, 2006, the Court held a hearing on the various matters pending before it and ordered additional briefing from the parties and Objector. On June 30, 2006, the trial court entered an order confirming its approval of the class act ion settlement and entering judgment thereto after the Court of Appeals had remanded the matter for further findings. The substantive terms of the settlement agreement remain unchanged. The trial court also entered supplemental orders on July 1, 2006, denying Objector’s Motion to File a Complaint in Intervention, Objector’s Motion for Leave of Discovery and Objector’s Motion to Dissolve the Anti-Suit Injunction. Notice of Entry of Judgment was served on July 10, 2006. On August 31, 2006, the Objector filed a Notice of Appeal to the Court’s June 30, 2006 and July 1, 2006 orders. On December 14, 2006, Objector filed his Appellant’s Brief. The Partnership and its affiliates, as well as counsel for the Settlement Class, both filed Respondents’ Briefs on May 17, 2007. Objector filed his response on August 3, 2007. No hearing date has yet been scheduled.

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.

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.

Environmental

Various Federal, state and local laws subject property owners or operators to liability for management, and the costs of removal or remediation, of certain hazardous substances present on a property. Such laws often impose liability without regard to whether the owner or operator knew of, or was responsible for, the release or presence of the hazardous substances. The presence of, or the failure to manage or remedy properly, hazardous substances may adversely affect occupancy at affected apartment communities and the ability to sell or finance affected properties. In addition to the costs associated with investigation and remediation actions brought by government agencies, and potential fines or penalties imposed by such agencies in connection therewith, the presence of hazardous substances on a property could result in claims by private plaintiffs for personal injury, disease, disability or other infirmities. Various laws also impose liability for the cost of removal, remediation or disposal of hazardous substances through a licensed disposal or treatment facility. Anyone who arranges for the disposal or treatment of hazardous substances is potentially liable under such laws. These laws often impose liability whether or not the person arranging for the disposal ever owned or operated the disposal facility. In connection with the ownership, operation and management of its properties, the Partnership could potentially be liable for environmental liabilities or costs associated with its properties.

Mold

The Partnership is aware of lawsuits against owners and managers of multifamily properties asserting claims of personal injury and property damage caused by the presence of mold, some of which have resulted in substantial monetary judgments or settlements. The Partnership has only limited insurance coverage for property damage loss claims arising from the presence of mold and for personal injury claims related to mold exposure. Affiliates of the Managing General Partner have implemented policies, procedures, third-party audits and training and the Managing General Partner believes that these measures will prevent or eliminate mold exposure and will minimize the effects that mold may have on residents. To date, the Partnership has not incurred any material costs or liabilities relating to claims of mold exposure or to abate mold conditions. Because the law regarding mold is unsettled and subject to change the Managing General Partner can make no assurance that liabilities resulting from the presence of or exposure to mold will not 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 cla ims 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 consist of five apartment complexes. The following table sets forth the average occupancy of the properties for the nine months ended September 30, 2007 and 2006:


	Average Occupancy
Property	2007	2006

Tamarind Bay Apartments	96%	96%
St. Petersburg, Florida
Vinings Peak Apartments (1)	93%	89%
Atlanta, Georgia
Plantation Crossing Apartments (2)	94%	91%
Atlanta, Georgia
Wood Lake Apartments	91%	92%
Atlanta, Georgia
Greenspoint Apartments (3)	79%	95%
Phoenix, Arizona

(1)

The Managing General Partner attributes the increase in occupancy at Vinings Peak Apartments to improved customer service and market conditions in the area.

(2)

The Managing General Partner attributes the increase in occupancy at Plantation Crossing Apartments to a more stable tenant base as a result of the implementation of a strict tenant screening process.

(3)

The Managing General Partner attributes the decrease in occupancy at Greenspoint Apartments to the ongoing redevelopment of the property.

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 guar antee 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, 2007 was approximately $818,000 and $1,766,000, respectively, compared to net loss of approximately $148,000 and net income of approximately $16,770,000 for the corresponding periods in 2006. The increase in net loss for the three months ended September 30, 2007 is due to an increase in total expenses and a decrease in total revenues, partially offset by the recognition of a casualty gain in 2007. The decrease in the net income for the nine months ended September 30, 2007 is primarily a result of the recognition of the gain on sale of Sandspoint Apartments in April 2006.

On April 21, 2006, the Partnership sold Sandspoint Apartments to a third party for a gross sale price of approximately $25,700,000. The net proceeds realized by the Partnership were approximately $25,353,000 after payment of closing costs. The Partnership used $11,000,000 of the net proceeds to repay the mortgage encumbering the property. As a result of the sale, the Partnership recorded a gain of approximately $17,314,000 and a loss on the early extinguishment of debt of approximately $78,000 due to the write off of unamortized loan costs, which is included in income (loss) from discontinued operations. In accordance with Statement of Financial Accounting Standards (“SFAS”) No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets,” the consolidated statements of operations reflect the operations of Sandspoint Apartments as income (loss) from discontinued operations due to its sale. The property’ s operations, income of approximately $9,000 and a loss of approximately $230,000 for the three and nine months ended September 30, 2006, respectively, are included in income (loss) from discontinued operations. Also included in income (loss) from discontinued operations are revenues of approximately zero and $937,000 for the three and nine months ended September 30, 2006, respectively.

The Partnership’s loss before discontinued operations and casualty gain for the three and nine months ended September 30, 2007 was approximately $839,000 and $1,787,000, respectively, as compared to loss before discontinued operations and casualty gain of approximately $157,000 and $337,000 for the three and nine months ended September 30, 2006, respectively. The increase in loss before discontinued operations and casualty gain for the three months ended September 30, 2007 is due to an increase in total expenses and a decrease in total revenues. The increase in loss before discontinued operations and casualty gain for the nine months ended September 30, 2007 is due to an increase in total expenses partially offset by an increase in total revenues. Total revenues decreased for the three months ended September 30, 2007 due to a decrease in other income. Rental income remained relatively constant for the three month period. &nbs p;Total revenues increased for the nine months ended September 30, 2007 due to an increase in rental income partially offset by a decrease in other income. Other income decreased for both periods due to a decrease in interest income as a result of a lower average balance of cash and cash equivalents partially offset by increases in tenant utility reimbursements at Tamarind Bay Apartments, Vinings Peak Apartments and Wood Lake Apartments. Rental income increased for the nine months ended September 30, 2007 due to an increase in occupancy at Vinings Peak Apartments and Plantation Crossing Apartments and an increase in the average rental rates at all five of the investment properties partially offset by decreases in occupancy at Greenspoint Apartments and Wood Lake Apartments.

Total expenses for both the three and nine months ended September 30, 2007 increased due to increases in operating, depreciation, interest and property tax expenses. For the nine months ended September 30, 2007 the increase in total expenses was partially offset by a decrease in general and administrative expense. General and administrative expense remained relatively constant for the three months ended September 30, 2007. Operating expense increased due to increases in advertising, property and insurance expenses partially offset by a decrease in maintenance expenses. Advertising expenses increased due to increases in web advertising at Tamarind Bay Apartments, Vinings Peak Apartments, and Wood Lake Apartments. Insurance expense increased due to increases in hazard insurance premiums at all five investment properties. Property expense increased due to an increase in payroll and related benefits and utility costs at most of the Partnership’s investment properties. Maintenance expenses decreased due to decreases in contract labor at Vinings Peak Apartments, Wood Lake Apartments and Greenspoint Apartments partially offset by increases in contract services at Plantation Crossing Apartments. Depreciation expense increased at all five investment properties due to property improvements and replacements placed into service during the past twelve months at the investment properties. Interest expense increased due to an increase in interest expense related to the second mortgage obtained at Tamarind Bay Apartments in June 2006, the modification of the mortgage at Greenspoint Apartments which increased the carrying value of the mortgage, and an increase in interest expense on the advances from an affiliate of the Managing General Partner as a result of a higher outstanding advance balance in 2007 partially offset by an increase in capitalized interest at Vinings Peak Apartments, Wood Lake Ap artments and Greenspoint Apartments related to ongoing redevelopment projects and a decrease in interest on the first mortgages encumbering the investment properties due to scheduled principal payments that reduced the carrying balance of the mortgages encumbering the investment properties. Property tax expense increased due to increases in the assessed value of Vinings Peak Apartments, Plantation Crossing Apartments, and Greenspoint Apartments.

General and administrative expenses decreased for the nine months ended September 30, 2007 primarily due to a decrease in professional fees associated with Partnership matters. Also included in general and administrative expenses for the three and nine months ended September 30, 2007 and 2006 are management reimbursements to an affiliate of the Managing General Partner as allowed under the Partnership Agreement and costs associated with the quarterly and annual communications with investors and regulatory agencies.

Liquidity and Capital Resources

At September 30, 2007, the Partnership had cash and cash equivalents of approximately $344,000 compared to approximately $1,114,000 at September 30, 2006. Cash and cash equivalents increased approximately $119,000 from December 31, 2006 due to approximately $11,031,000 and $1,608,000 of cash provided by financing and operating activities, respectively partially offset by approximately $12,520,000 of cash used in investing activities. Cash provided by financing activities consisted of net proceeds received from the modification of the mortgage note payable at Greenspoint Apartments and advances from an affiliate of the Managing General Partner partially offset by principal payments on the mortgages encumbering the Partnership’s properties, the payment of loan costs related to the debt modification, and repayment of advances from an affiliate of the Managing General Partner. Cash used in investing activities consisted of property improveme nts and replacements partially offset by net withdrawals from restricted escrows and insurance proceeds received. 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.

Wood Lake Apartments

During the nine months ended September 30, 2007, the Partnership completed approximately $2,756,000 of capital improvements at Wood Lake Apartments arising from the redevelopment of the property, which includes capitalization of construction period interest costs of approximately $54,000, capitalized property tax expense of approximately $6,000, and capitalized operating costs of approximately $1,000 for the nine months ended September 30, 2007. Additional capital improvements of approximately $287,000 were also completed which consisted primarily of appliance and floor covering replacements. These improvements were funded from operating cash flow, replacement reserves and advances from an affiliate of the Managing General Partner. The Partnership regularly evaluates the capital improvement needs of the property. In November 2006, the Partnership began a major redevelopment project in order to become more competitive with ot her properties in the area in an effort to increase occupancy at the property. Based on current redevelopment plans, the Managing General Partner anticipates the redevelopment to be completed in August 2008 at a total estimated cost of approximately $13,451,000 of which approximately $3,940,000 was completed as of September 30, 2007. The balance of the redevelopment project of approximately $9,511,000 is expected to be funded from operating cash flow and advances from an affiliate of the Managing General Partner. In addition to the redevelopment project, certain routine capital expenditures are anticipated during 2007. Such capital expenditures will depend on the physical condition of the property as well as replacement reserves and anticipated cash flow generated by the property.

Greenspoint Apartments

During the nine months ended September 30, 2007, the Partnership completed approximately $5,310,000 of capital improvements at Greenspoint Apartments arising from the redevelopment of the property, which includes capitalization of construction period interest costs of approximately $111,000, capitalized property tax expense of approximately $18,000 and capitalized operating costs of approximately $12,000 for the nine months ended September 30, 2007. Additional capital improvements of approximately $68,000 were also completed which consisted primarily of building improvements and floor covering replacements. These improvements were funded from operating cash flow and advances from an affiliate of the Managing General Partner. The Partnership regularly evaluates the capital improvement needs of the property. The property is currently undergoing a redevelopment project in order to become more competitive with other properties i n the area in an effort to increase occupancy at the property. Based on current redevelopment plans, the Managing General Partner anticipates the redevelopment to be completed in March 2008 at a total estimated cost of approximately $9,943,000 of which approximately $6,083,000 was completed as of September 30, 2007. The balance of the redevelopment project of approximately $3,860,000 is expected to be funded from operating cash flow and advances from an affiliate of the Managing General Partner. In addition to the redevelopment project, certain routine capital expenditures are anticipated during 2007. Such capital expenditures will depend on the physical condition of the property as well as anticipated cash flow generated by the property.

Vinings Peak Apartments

During the nine months ended September 30, 2007, the Partnership completed approximately $2,756,000 of capital improvements at Vinings Peak Apartments arising from the redevelopment of the property, which includes capitalization of construction period interest costs of approximately $63,000, capitalized property tax expense of approximately $6,000, and capitalized operating costs of approximately $2,000 for the nine months ended September 30, 2007. Additional capital improvements of approximately $118,000 were also completed which consisted primarily of structural upgrades, resurfacing of kitchen and bath countertops, appliance and floor covering replacements. These improvements were funded from operating cash flow, replacement reserves and advances from an affiliate of the Managing General Partner. The Partnership regularly evaluates the capital improvement needs of the property. In November 2006, the Partnership began a major re development project in order to become more competitive with other properties in the area in an effort to increase occupancy at the property. Based on current redevelopment plans, the Managing General Partner anticipates the redevelopment to be completed in September 2008 at a total estimated cost of approximately $15,682,000 of which approximately $4,008,000 was completed as of September 30, 2007. The balance of the redevelopment project of approximately $11,674,000 is expected to be funded from operating cash flow and advances from an affiliate of the Managing General Partner. In addition to the redevelopment project, certain routine capital expenditures are anticipated during 2007. Such capital expenditures will depend on the physical condition of the property as well as replacement reserves and anticipated cash flow generated by the property.

Plantation Crossing Apartments

During the nine months ended September 30, 2007, the Partnership completed approximately $311,000 of capital improvements at the property consisting primarily of building improvements, plumbing fixtures, sprinkler system upgrades, and floor covering, appliance, and air conditioning unit replacements. These improvements were funded from operating cash flow, replacement reserves and advances from an affiliate of the Managing General Partner. The Partnership regularly evaluates the capital improvement needs of the property. While the Partnership has no material commitments for property improvements and replacements, certain routine capital expenditures are anticipated during 2007. Such capital expenditures will depend on the physical condition of the property as well as anticipated cash flow generated by the property.

Tamarind Bay Apartments

During the nine months ended September 30, 2007, the Partnership completed approximately $419,000 of capital improvements at Tamarind Bay Apartments arising from the redevelopment of the property, which includes capitalization of construction period interest costs of approximately $2,000 for the nine months ended September 30, 2007. Additional capital improvements of approximately $229,000 were also completed which consisted primarily of structural upgrades, fire safety equipment, swimming pool upgrades, major landscaping, and floor covering replacements. These improvements were funded from operating cash flow and advances from an affiliate of the Managing General Partner. The Partnership regularly evaluates the capital improvement needs of the property. In 2005 the Partnership began a major redevelopment project in order to become more competitive with other properties in the area in an effort to increase occupancy at the propert y. Based on current redevelopment plans, the Managing General Partner anticipates the redevelopment to be completed in the fourth quarter of 2007 at a total estimated cost of approximately $2,583,000 of which approximately $2,407,000 was completed as of September 30, 2007. The balance of the costs associated with the redevelopment of approximately $176,000 is expected to be funded from operating cash flow and advances from an affiliate of the Managing General Partner. In addition to the redevelopment project, certain routine capital expenditures are anticipated during 2007. Such capital expenditures will depend on the physical condition of the property as well as anticipated cash flow generated by the property.

Capital expenditures will be incurred only if cash is available from operations or from Partnership reserves. To the extent that capital improvements are completed, the Partnership's distributable cash flow, if any, may be adversely affected at least in the short term.

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, 2007, this credit limit was exceeded and an affiliate of the Managing General Partner advanced the Partnership approximately $10,875,000 to fund operations and redevelopment costs at several of the Partnership’s properties. There were no such advances during the nine months ended September 30, 2006. Interest on the credit line is charged at the prime rate plus 2% or 9.75% at September 30, 2007. Interest expense was approximately $460,000 for the nine months ended September 30, 2007. During the nine months ended September 30, 2007, the Partnership repaid approximately $2,068,000 of advances and accrued interest from proceeds received in connection with the additional mortgage financing of Greenspoint Apartments. At September 30, 2007 the total a dvances and accrued interest due to the Corporate General Partner was approximately $9,488,000 and is included in due to affiliates on the accompanying consolidated balance sheet. Subsequent to September 30, 2007, an affiliate of the Managing General Partner advanced the Partnership approximately $3,102,000 to fund operations and redevelopment spending at several of the Partnership’s investment properties.

The Partnership’s assets are thought to be generally sufficient for any near-term needs (exclusive of capital improvements) of the Partnership. On March 30, 2007, the Partnership obtained an increase of $6,500,000 to the maximum principal amount available under the existing mortgage on Greenspoint Apartments. Greenspoint Apartments is currently undergoing a redevelopment project, as discussed above. The additional availability under the mortgage is comprised of an initial advance (“Note B”) of $3,000,000 that was made to the Partnership on March 30, 2007, and two earn-out advances of $1,750,000 each (“Note C” and “Note D”), that are available to the Partnership in connection with the redevelopment of the property. To obtain the Note C advance, the Partnership must not have prepaid Note B and must have completed and paid for the portion of the redevelopment improvements with an aggregate cost of at least $6,5 00,000. The deadline to satisfy the Note C criteria is December 27, 2007. If the Partnership fails to satisfy the conditions for obtaining the Note C advance, then the lender shall have no obligation to fund the Note D advance. To obtain the Note D advance, the Partnership must not have prepaid Notes B and C and must have completed and paid for the remaining portion of the redevelopment improvements with an aggregate cost of approximately $2,300,000. The deadline to satisfy the Note D criteria is May 28, 2008.

The existing mortgage agreement dated May 17, 2005 was modified to reflect the increase in indebtedness from $11,000,000 to $17,500,000. The maturity date and interest rate for the existing mortgage remains unchanged as a result of the modification. Note B has a fixed interest rate of 5.79% per annum, with interest only payments due from May 2007 through October 2008. Note B also requires a one time principal payment of $1,000 on March 1, 2008. Payments of principal and interest shall be made in 300 successive monthly installments commencing on November 1, 2008, and continuing through the maturity date of October 1, 2033. The lender can exercise a call option on the outstanding indebtedness, at its sole discretion, on May 1, 2012, and every fifth anniversary thereafter. The mortgage principal balance at May 2012 will be approximately $2,791,000. The Partnership paid loan costs of approximately $85,000 in connection with obtaining the additional financing of $3,000,000, which is capitalized in other assets on the consolidated balance sheet included in “Item 1. Financial Statements”. Notes C and D each have fixed interest rates of 5.82% per annum, with monthly interest only payments commencing on the first day of the second calendar month following the date of disbursement, until November 1, 2008, when monthly payments of principal and interest shall be made for 300 successive monthly installments continuing through the maturity dates of October 1, 2033.

On June 30, 2006, the Partnership obtained an additional mortgage loan in the principal amount of $3,050,000 on its investment property, Tamarind Bay Apartments. The additional mortgage loan requires monthly payments of interest only beginning on August 1, 2006 until July 1, 2009, at a fixed interest rate of 6.31%. From August 1, 2009 through the maturity date of September 1, 2021, the additional mortgage loan requires monthly payments of principal and interest at a fixed interest rate of 6.31% per annum. At maturity a balloon payment of approximately $2,424,000 is due. The Partnership may prepay the additional mortgage loan at any time with 30 days written notice to the lender subject to a prepayment penalty as defined in the loan agreement. During the nine months ended September 30, 2006, the Partnership paid loan costs of approximately $93,000 in connection with obtaining the additional mortgage loan which is capitalized in other assets.

The mortgage indebtedness encumbering Vinings Peak, Plantation Crossing and Wood Lake Apartments of approximately $17,534,000 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 Partnership distributed the following amounts during the nine months ended September 30, 2007 and 2006 (in thousands, except per unit data):


	Nine Months		Nine Months
	Ended	Per Limited	Ended	Per Limited
	September 30,	Partnership	September 30,	Partnership
	2007	Unit	2006	Unit

Sale proceeds (1)	$ --	$ --	$ 12,773	$ 140.18
Refinance proceeds (2)	--	--	5,078	55.74
	$ --	$ --	$ 17,851	$ 195.92

(1)

Proceeds from the sale of Sandspoint Apartments in April 2006 and the sale of Misty Woods in October 2005.

(2)

Proceeds from the refinancings of Greenspoint and Sandspoint Apartments in May 2005.

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, property sales and/or refinancings. The Partnership's cash available for distribution is reviewed on a monthly basis. Given the substantial redevelopment projects ongoing at four properties and the amounts accrued and payable to affiliates of the Managing General Partner at September 30, 2007, it is not expected that the Partnership will generate sufficient funds from operations, after planned capital expenditures, to permit any distributions to its partners in 2007 or subsequent periods.

Other

In addition to its indirect ownership of the general partner interest in the Partnership, AIMCO and its affiliates owned 60,711.66 limited partnership units (the "Units") in the Partnership representing 68.00% of the outstanding Units at September 30, 2007. 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 68.00% 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. ("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 General Partner owes fiduciary duties to the limited partners of the Partnership, the Managing General Partner also owes fiduciary duties to the General Partner and AIMCO as the sole stockholder of the Managing General Partner. As a result, the duties of the Managing General Partner, as managing general partner, to the Partnersh ip 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

Investment properties are recorded at cost, less accumulated depreciation, unless the carrying amount of the asset is not recoverable. If events or circumstances indicate that the carrying amount of a property may not be recoverable, the Partnership will make an assessment of its recoverability by comparing the carrying amount to the Partnership’s estimate of the undiscounted future cash flows, excluding interest charges, of the property. If the carrying amount exceeds the aggregate undiscounted future cash flows, the Partnership would recognize an impairment loss to the extent the carrying amount exceeds the estimated fair value of the property.

Real property investment is 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, general economic climate; competition from other apartment communities and other housing options; local conditions, such as loss of jobs or an increase in the supply of apartments that might adversely affect apartment occupancy or rental rates; changes in governmental regulations and the related cost of compliance; increases in operating costs (including real estate taxes) due to inflation and other factors, which may not be offset by increased rents; and changes in tax laws and housing laws, including the enactment of rent control laws or other laws regulating multi-family housing. Any adverse changes in these factors could cause impairment of the Partnership’s assets.

Capitalized Costs Related to Redevelopment & Construction Projects

The Partnership capitalizes costs incurred in connection with capital expenditure activities, including redevelopment and construction projects. Costs including interest, property taxes and operating costs associated with redevelopment and construction projects are capitalized during periods in which redevelopment and construction projects are in progress in accordance with Statement of Financial Accounting Standards (“SFAS”) No. 34, “Capitalization of Interest Costs” and SFAS No. 67, “Accounting for Costs and the Initial Rental Operations of Real Estate Properties.” Included in these capitalized costs are payroll costs associated with time spent by site employees in connection with the planning, execution and control of all capital expenditure activities at the property level.

Revenue Recognition

The Partnership generally leases apartment units for twelve-month terms or less. The Partnership will offer rental concessions during particularly slow months or in response to heavy competition from other similar complexes in the area. Rental income attributable to leases, net of any concessions, is recognized on a straight-line basis over the term of the lease. 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.

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 contr ols 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 lim ited 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 28, 2002, the trial court granted defendants motion to strike the complaint. Plaintiffs took an appeal from this order.

On August 18, 2005, Objector and his counsel filed a motion to disqualify the trial court based on a peremptory challenge and filed a motion to disqualify for cause on October 17, 2005, both of which were ultimately denied and/or struck by the trial court. On or about October 13, 2005 Objector filed a motion to intervene and on or about October 19, 2005 filed both a motion to take discovery relating to the adequacy of plaintiffs as derivative representatives and a motion to dissolve the anti-suit injunction in connection with settlement. On November 14, 2005, Plaintiffs filed a Motion For Further Findings pursuant to the remand ordered by the Court of Appeals. Defendants joined in that motion. On February 3, 2006, the Court held a hearing on the various matters pending before it and has ordered additional briefing from the parties and Objector. On June 30, 2006, the trial court entered an order confirming its approval of the class action settlement and entering judgment thereto after the Court of Appeals had remanded the matter for further findings. The substantive terms of the settlement agreement remain unchanged. The trial court also entered supplemental orders on July 1, 2006, denying Objector’s Motion to File a Complaint in Intervention, Objector’s Motion for Leave of Discovery and Objector’s Motion to Dissolve the Anti-Suit Injunction. Notice of Entry of Judgment was served on July 10, 2006. On August 31, 2006, the Objector filed a Notice of Appeal to the Court’s June 30, 2006 and July 1, 2006 orders. On December 14, 2006, Objector filed his Appellant’s Brief. The Partnership and its affiliates, as well as counsel for the Settlement Class, both filed Respondents’ Briefs on May 17, 2007. Objector filed his response on August 3, 2007. No hearing date has yet been scheduled.

ITEM 5.

OTHER INFORMATION

None.

ITEM 6.

EXHIBITS

See Exhibit Index.

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
	General Partner

	By: FOX CAPITAL MANAGEMENT CORPORATION
	Managing General Partner

Date: November 13, 2007	By: /s/Martha L. Long
	Martha L. Long
	Senior Vice President

Date: November 13, 2007	By: /s/Stephen B. Waters
	Stephen B. Waters
	Vice President

CENTURY PROPERTIES 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 2.4 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 Current Report on Form 8-K dated September 29, 2003.

3.6

Second Amendment to the Amended and Restated Limited Partnership Agreement, dated December 4, 2006 (filed with Form 10-KSB of Registrant dated December 31, 2006 and incorporated herein by reference).

10.12

Multifamily Note dated August 30, 2001 between GMAC Commercial Mortgage Corporation and Century Properties Fund XIX for the refinance of Tamarind Bay Apartments, incorporated by reference to the Registrant’s Current Report on Form 8-K dated August 30, 2001.

10.13

Multifamily Note dated June 25, 2003 between Century Properties Fund XIX and KeyCorp Real Estate Capital Markets, Inc., incorporated by reference to the Registrant’s Current Report on 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 the Registrant’s Current Report on 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 the Registrant’s Current Report on Form 8-K dated June 25, 2003.

10.16

10.17

10.18

10.19

10.20

10.21

10.26

Promissory Note dated May 17, 2005 between Century Properties Fund XIX, a California limited partnership and ING USA Annuity and Life Insurance Company incorporated by reference to the Registrant’s Current Report on Form 8-K dated May 17, 2005.

10.27

Deed of Trust, Security Agreement, Financing Statement and Fixture Filing, dated May 17, 2005 between Century Properties Fund XIX, a California limited partnership and ING USA Annuity and Life Insurance Company incorporated by reference to the Registrant’s Current Report on Form 8-K dated May 17, 2005.

10.35

Purchase and Sale Contract between Century Properties Fund XIX and FF Realty LLC, dated February 20, 2006, incorporated by reference to the Registrant’s Current Report on Form 8-K dated February 20, 2006.

10.36

First Amendment to the Purchase and Sale Contract between Century Properties Fund XIX and FF Realty, LLC, dated March 27, 2006, incorporated by reference to the Registrant’s Current Report on Form 8-K dated March 22, 2006.

10.37

Multifamily Note dated June 30, 2006 between Century Properties Fund XIX, a California limited partnership and Capmark Finance Inc., a California corporation, incorporated by reference to the Registrant’s Current Report on Form 8-K dated June 30, 2006.

10.38

Amended and Restated Multifamily Note dated June 30, 2006 between Century Properties Fund XIX, a California limited partnership and Federal Home Loan Mortgage Corporation, incorporated by reference to the Registrant’s Current Report on Form 8-K dated June 30, 2006.

10.39

Modification Agreement between ING Life Insurance and Annuity Company, a Connecticut corporation, and Century Properties Fund XIX, a California limited partnership, dated March 30, 2007 (incorporated by reference to the Registrant’s Current Report on Form 8-K dated March 30, 2007).

10.40

Loan Agreement between ING Life Insurance and Annuity Company, a Connecticut corporation, and Century Properties Fund XIX, a California limited partnership, dated March 30, 2007 (incorporated by reference to the Registrant’s Current Report on Form 8-K dated March 30, 2007).

10.41

Promissory Note (“Note B”) between ING Life Insurance and Annuity Company, a Connecticut corporation, and Century Properties Fund XIX, a California limited partnership, dated March 30, 2007 (incorporated by reference to the Registrant’s Current Report on Form 8-K dated March 30, 2007).

10.42

Promissory Note (“Note C”) between ING Life Insurance and Annuity Company, a Connecticut corporation, and Century Properties Fund XIX, a California limited partnership, dated March 30, 2007 (incorporated by reference to the Registrant’s Current Report on Form 8-K dated March 30, 2007).

10.43

Promissory Note (“Note D”) between ING Life Insurance and Annuity Company, a Connecticut corporation, and Century Properties Fund XIX, a California limited partnership, dated March 30, 2007 (incorporated by reference to the Registrant’s Current Report on Form 8-K dated March 30, 2007).

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 of the equivalent of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

EX-31 2 cpf19ex311.htm EXHIBIT 31.1 Exhibit 31

Exhibit 31.1

CERTIFICATION

I, Martha L. Long, certify that:

I have reviewed this quarterly report on Form 10-QSB of Century Properties Fund XIX;

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;

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;

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

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 13, 2007

/s/Martha L. Long

Martha L. Long

Senior Vice President of Fox Capital Management Corporation, equivalent of the chief executive officer of the Partnership

EX-31 3 cpf19ex312.htm EXHIBIT 31.2 Exhibit 31

Exhibit 31.2

CERTIFICATION

I, Stephen B. Waters, certify that:

I have reviewed this quarterly report on Form 10-QSB of Century Properties Fund XIX;

(a)

(b)

(c)

(a)

(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 13, 2007

/s/Stephen B. Waters

Stephen B. Waters

Vice President of Fox Capital Management Corporation, equivalent of the chief financial officer of the Partnership

EX-32 4 cpf19ex321.htm EXHIBIT 32.1 Exhibit 32

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, 2007 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 13, 2007

/s/Stephen B. Waters

Name: Stephen B. Waters

Date: November 13, 2007

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.

-----END PRIVACY-ENHANCED MESSAGE-----