-----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, LCJxoRVHuwd37BxVtRXYy3N9ynPUIY4lkrMym3T9z4HvfFYC1yHtfBAA9ahCQOW5 KJWDruJDJKnQY+8ZGi5E5A== 0000711642-05-000586.txt : 20051114 0000711642-05-000586.hdr.sgml : 20051111 20051114085123 ACCESSION NUMBER: 0000711642-05-000586 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20050930 FILED AS OF DATE: 20051114 DATE AS OF CHANGE: 20051114 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SHELTER PROPERTIES VI LIMITED PARTNERSHIP CENTRAL INDEX KEY: 0000730013 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 570755618 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-13261 FILM NUMBER: 051196806 BUSINESS ADDRESS: STREET 1: 55 BEATTIE PLACE STREET 2: PO BOX 1089 CITY: GREENVILLE STATE: SC ZIP: 29602 BUSINESS PHONE: 8642391000 MAIL ADDRESS: STREET 1: 55 BEATTIE PLACE STREET 2: PO BOX 1089 CITY: GREENVILLE STATE: SC ZIP: 29602 10QSB 1 sp6.txt SP6 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, 2005 [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT For the transition period from ________________ to ________________ Commission file number 0-13261 SHELTER PROPERTIES VI (Exact name of small business issuer as specified in its charter) South Carolina 57-0755618 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 55 Beattie Place, P.O. Box 1089 Greenville, South Carolina 29602 (Address of principal executive offices) (864) 239-1000 (Issuer's telephone number) 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 SHELTER PROPERTIES VI BALANCE SHEET (Unaudited) (in thousands, except unit data) September 30, 2005
Assets Cash and cash equivalents $ 111 Receivables and deposits 132 Restricted escrow 107 Other assets 249 Investment properties: Land $ 588 Buildings and related personal property 9,681 10,269 Less accumulated depreciation (6,698) 3,571 Assets held for sale (Note A) 1,631 $ 5,801 Liabilities and Partners' Capital (Deficiency) Liabilities Accounts payable $ 112 Tenant security deposit liabilities 40 Accrued property taxes 63 Other liabilities 148 Due to affiliates (Note C) 775 Mortgage notes payable 6,140 Liabilities related to assets held for sale (Note A) 1,818 Partners' Capital (Deficiency) General partners $ 198 Limited partners (42,324 units issued and outstanding) (3,493) (3,295) $ 5,801 See Accompanying Notes to Financial Statements
SHELTER PROPERTIES VI STATEMENTS OF OPERATIONS (Unaudited) (in thousands, except per unit data)
Three Months Ended Nine months Ended September 30, September 30, 2005 2004 2005 2004 (Restated) (Restated) Revenues: Rental income $ 441 $ 416 $ 1,253 $ 1,244 Other income 45 60 141 155 Total revenues 486 476 1,394 1,399 Expenses: Operating 291 326 837 743 General and administrative 34 67 111 197 Depreciation 99 92 289 289 Interest 105 95 304 284 Property taxes 21 20 65 63 Total expenses 550 600 1,606 1,576 Loss from continuing operations (64) (124) (212) (177) Income (loss) from discontinued operations (Notes A and D) 12 (2,724) (29) (2,674) Gain from sale of discontinued operations (Note D) -- 24,356 -- 24,356 Net (loss) income $ (52) $21,508 $ (241) $21,505 Net (loss) income allocated to general partners $ (1) $ 215 $ (2) $ 215 Net (loss) income allocated to limited partners (51) 21,293 (239) 21,290 $ (52) $21,508 $ (241) $21,505 Per limited partnership unit: Loss from continuing operations $ (1.48) $ (2.89) $ (4.96) $ (4.14) Income (loss) from discontinued operations 0.28 (63.72) (0.69) (62.54) Gain from sale of discontinued operations -- 569.70 -- 569.70 Net (loss) income per limited partnership unit $ (1.20) $503.09 $ (5.65) $503.02 Distributions per limited partnership unit $ -- $425.27 $ -- $425.27 See Accompanying Notes to Financial Statements
SHELTER PROPERTIES VI STATEMENT OF CHANGES IN PARTNERS' CAPITAL (DEFICIENCY) (Unaudited) (in thousands, except unit data)
Limited Partnership General Limited Units Partners Partners Total Original capital contributions 42,324 $ 2 $42,324 $42,326 Partners' capital (deficiency) at December 31, 2004 42,324 $ 200 $(3,254) $(3,054) Net loss for the nine months ended September 30, 2005 -- (2) (239) (241) Partners' capital (deficiency) at September 30, 2005 42,324 $ 198 $(3,493) $(3,295) See Accompanying Notes to Financial Statements
SHELTER PROPERTIES VI STATEMENTS OF CASH FLOWS (Unaudited) (in thousands)
Nine Months Ended September 30, 2005 2004 Cash flows from operating activities: Net (loss) income $ (241) $21,505 Adjustments to reconcile net (loss) income to net cash provided by operating activities: Depreciation 417 863 Amortization of loan costs 34 46 Gain from sale of discontinued operations -- (24,356) Loss on early extinguishment of debt -- 2,727 Change in accounts: Receivables and deposits 9 21 Other assets (19) (54) Accounts payable 25 55 Tenant security deposit liabilities 8 (46) Accrued property taxes 3 (25) Due to affiliates 9 86 Other liabilities (32) (410) Net cash provided by operating activities 213 412 Cash flows from investing activities: Property improvements and replacements (352) (317) Net withdrawals from restricted escrows 55 85 Proceeds from sale of discontinued operations -- 31,038 Net cash (used in) provided by investing activities (297) 30,806 Cash flows from financing activities: Repayment of mortgage note payable -- (10,091) Payments on mortgage notes payable (182) (366) Prepayment penalty paid -- (2,457) Distributions to partners -- (18,000) Advances from affiliate 138 250 Repayment of advances from affiliate (30) (250) Net cash used in financing activities (74) (30,914) Net (decrease) increase in cash and cash equivalents (158) 304 Cash and cash equivalents at beginning of period 269 255 Cash and cash equivalents at end of period $ 111 $ 559 Supplemental disclosure of cash flow information: Cash paid for interest $ 338 $ 846 Supplemental disclosure of non-cash activity: Property improvements and replacements included in accounts payable $ 61 $ 25 Included in property improvements and replacements for the nine months ended September 30, 2005 and 2004 are approximately $42,000 and $66,000 of improvements which were included in accounts payable at December 31, 2004 and 2003, respectively. See Accompanying Notes to Financial Statements
SHELTER PROPERTIES VI NOTES TO FINANCIAL STATEMENTS (Unaudited) Note A - Basis of Presentation The accompanying unaudited financial statements of Shelter Properties VI (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 responsible for management of the Partnership's business is Shelter Realty VI Corporation ("the Corporate General Partner"). The Corporate General Partner is a subsidiary of Apartment Investment and Management Company ("AIMCO"), a publicly traded real estate investment trust. The non-corporate general partner, AIMCO Properties, L.P., is also an affiliate of AIMCO. In the opinion of the Corporate 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, 2005 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2005. For further information, refer to the financial statements and footnotes thereto included in the Partnership's Annual Report on Form 10-KSB for the year ended December 31, 2004. In accordance with Statement of Financial Accounting Standards ("SFAS") No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets", the accompanying statements of operations for the three and nine months ended September 30, 2004 have been restated as of January 1, 2004 to reflect the operations of Carriage House Apartments as income (loss) from discontinued operations. The operations of River Reach Apartments for the three and nine months ended September 30, 2004 are also reflected as loss from discontinued operations due to its sale to a third party in August 2004. On October 26, 2005, the Partnership sold Carriage House Apartments to a third party (see Note F). In accordance with SFAS No. 144, the assets and liabilities of Carriage House Apartments have been classified as held for sale at September 30, 2005 on the accompanying balance sheet. Note B - Reconciliation of Cash Flows The following, as required by the partnership agreement of the Partnership (the "Partnership Agreement"), is a reconciliation of "Net cash provided by operating activities" on the accompanying statements of cash flows to "Net cash from operations", as defined in the Partnership Agreement. However, "Net cash from operations" should not be considered an alternative to net loss as an indicator of the Partnership's operating performance or to cash flows as a measure of liquidity.
Nine Months Ended September 30, 2005 2004 (in thousands) Net cash provided by operating activities $ 213 $ 412 Payments on mortgage notes payable (182) (366) Property improvements and replacements (352) (317) Change in restricted escrows, net 55 85 Changes in reserves for net operating liabilities (3) 373 Additions to operating reserves -- (187) Net cash used in operations $ (269) $ --
The Corporate General Partner reserved approximately $187,000 during the nine months ended September 30, 2004 to fund capital improvements at the Partnership's investment properties. Note C - Transactions with Affiliated Parties The Partnership has no employees and depends on the Corporate 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 reimbursement of certain expenses incurred by affiliates on behalf of the Partnership. Affiliates of the Corporate 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 $95,000 and $199,000 for the nine months ended September 30, 2005 and 2004, respectively, which are included in operating expenses and income (loss) from discontinued operations. Affiliates of the Corporate General Partner charged the Partnership for reimbursement of accountable administrative expenses amounting to approximately $91,000 and $134,000 for the nine months ended September 30, 2005 and 2004, respectively, which are included in general and administrative expenses, investment properties, and assets held for sale. The portion of these reimbursements included in investment properties and assets held for sale for the nine months ended September 30, 2005 and 2004 are fees related to construction management services provided by an affiliate of the Corporate General Partner of approximately $30,000 and $5,000, respectively. The construction management service fees are calculated based on a percentage of additions to investment properties. At September 30, 2005, approximately $8,000 was owed to affiliates for unpaid reimbursements and is included in due to affiliates. Pursuant to the Partnership Agreement and in connection with the sale of Foxfire/Barcelona Village during 2000, Nottingham Square Apartments in December 2002, and River Reach Apartments in August 2004, the Corporate General Partner is entitled to a commission of up to 1% for its assistance in the sale. Payment of such commission is subordinate to the limited partners receiving a cumulative 7% return on their investment. This return has not yet been met; accordingly, the combined fees of approximately $658,000 have been accrued and are included in due to affiliates. During the nine months ended September 30, 2005 and 2004, an affiliate of the Corporate General Partner advanced the Partnership approximately $138,000 and $250,000, respectively, to cover capital expenditures and operating expenses at Village Gardens Apartments and Rocky Creek Apartments and additional costs related to the sale of Nottingham Square Apartments, respectively. Interest is accrued at the prime rate plus 1% (7.75% at September 30, 2005). Interest expense on these advances was approximately $1,000 and $3,000 for the nine months ended September 30, 2005 and 2004, respectively. During the nine months ended September 30, 2005 and 2004, the Partnership made payments of approximately $30,000 and $250,000, respectively, on the outstanding advances. At September 30, 2005, the amount of outstanding advances and associated accrued interest due to an affiliate of the Corporate General Partner was approximately $109,000 and is included in due to affiliates. 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 Corporate General Partner. During the nine months ended September 30, 2005 and 2004, the Partnership was charged by AIMCO and its affiliates approximately $40,000 and $74,000, respectively, for insurance coverage and fees associated with policy claims administration. Note D - Disposition of Investment Property On August 30, 2004, the Partnership sold River Reach Apartments to a third party for approximately $31,683,000. After payment of closing costs of approximately $645,000, the net proceeds received by the Partnership were approximately $31,038,000. The Partnership used a portion of the proceeds to repay the mortgage encumbering the property of approximately $10,091,000. The sale of the property resulted in a gain of approximately $24,356,000 for the three and nine months ended September 30, 2004. In addition, the Partnership recorded a loss on early extinguishment of debt of approximately $2,727,000, as a result of the write off of unamortized loan costs and a prepayment penalty, which is included in income (loss) from discontinued operations. The results of the property's operations for the three and nine months ended September 30, 2004 of approximately $2,000 and $78,000, respectively, are included in income (loss) from discontinued operations and include revenues of approximately $465,000 and $1,891,000, respectively. The loss from discontinued operations for the nine months ended September 30, 2005 includes income of approximately $13,000 as a result of the collection of tenant receivables. Note E - 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 Corporate 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 Corporate 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". With regard to the second appeal, the Court of Appeals reversed the order requiring the Objector to pay referee fees. On April 26, 2005, the Court of Appeals lifted the stay of a pending appeal related to the Heller action and the trial court's order striking the complaint. On April 28, 2005, the Objector filed a Petition for Review with the California Supreme Court in connection with the opinion vacating the order approving settlement and remanding for further findings. On June 10, 2005, the California Supreme Court denied Objector's Petition for Review and the Court of Appeals sent the matter back to the trial court on June 21, 2005. The parties intend to ask the trial court to make further findings in connection with settlement consistent with the Court of Appeal's remand order. 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. 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 October 27, 2005, the Court denied Objector's peremptory challenge and struck Objector's motion to disqualify for cause. No hearing has been set on Objector's remaining motions. On November 3, 2005, Objector and his counsel filed a writ of mandate to the Court of Appeals challenging the court's October 27, 2005 order. The Corporate 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. AIMCO Properties L.P. and NHP Management Company, both affiliates of the Corporate General Partner, are defendants in a lawsuit alleging that they 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. The complaint, filed in the United States District Court for the District of Columbia, attempts to bring 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. and NHP Management Company failed to compensate maintenance workers for time that they were required to be "on-call". Additionally, the complaint alleges AIMCO Properties L.P. and NHP Management Company failed to comply with the FLSA in compensating maintenance workers for time that they worked in excess of 40 hours in a week. In June 2005 the Court conditionally certified the collective action on both the on-call and overtime issues, which allows the plaintiffs to provide notice of the collective action to all non-exempt maintenance workers from August 7, 2000 through the present. Those employees will have the opportunity to opt-in to the collective action, and AIMCO Properties, L.P. and NHP Management Company will have the opportunity to move to decertify the collective action. Because the court denied plaintiffs' motion to certify state subclasses, on September 26, 2005, the plaintiffs filed a class action with the same allegations in the Superior Court of California (Contra Costa County). 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 consolidated financial condition or results of operations. Similarly, the Corporate General Partner does not believe that the ultimate outcome will have a material adverse effect on the Partnership's financial condition or results of operations. Corporate General Partner does not believe that the ultimate outcome will have a material adverse effect on the Partnership's 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. 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 Corporate General Partner have implemented a national policy and procedures to prevent or eliminate mold from its properties and the Corporate General Partner believes that these measures will minimize the effects that mold could 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 Corporate 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 financial condition or results of operations. SEC Investigation The Central Regional Office of the United States Securities and Exchange Commission (the "SEC") continues its 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 have included 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, tax credit transactions, and tender offers for limited partnership interests. AIMCO is cooperating fully. AIMCO is not able to predict when the investigation 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 Corporate General Partner does not believe that the ultimate outcome will have a material adverse effect on the Partnership's financial condition or results of operations. Note F - Subsequent Events On October 26, 2005, the Partnership sold Carriage House Apartments to a third party for a gross sale price of approximately $3,500,000. The net proceeds realized by the Partnership were approximately $3,447,000 after payment of closing costs and a prepayment penalty owed by the Partnership and paid by the buyer. The Partnership used approximately $1,766,000 of the net proceeds to repay the mortgage encumbering the property. The Partnership distributed approximately $1,088,000 of the net proceeds to the limited partners ($25.71 per limited partnership unit). As a result of the sale, the Partnership expects to record a gain of approximately $1,726,000 and a loss on the early extinguishment of debt of approximately $40,000 during the fourth quarter of 2005. The property's operations, income of approximately $12,000 and loss of approximately $42,000 for the three and nine months ended September 30, 2005, respectively, and income of approximately $1,000 and loss of approximately $25,000 for the three and nine months ended September 30, 2004, respectively, are shown as income (loss) from discontinued operations. Included in income (loss) from discontinued operations are revenues of approximately $178,000 and $543,000 for the three and nine months ended September 30, 2005, respectively, and approximately $177,000 and $541,000 for the three and nine months ended September 30, 2004, respectively. Subsequent to September 30, 2005, the Partnership entered into a Purchase and Sale Contract to sell Rocky Creek Apartments to a third party for a purchase price of approximately $4,450,000. The anticipated closing date for the transaction is January 31, 2006. At September 30, 2005, the carrying amounts of the mortgage note payable and investment property for Rocky Creek Apartments are approximately $2,182,000 and $1,791,000, respectively. The operating results of Rocky Creek Apartments for the three and nine months ended September 30, 2005 were income of approximately $5,000 and $12,000, respectively, which included revenues of approximately $218,000 and $634,000, respectively. The operating results of the property for the three and nine months ended September 30, 2004 were income of approximately $31,000 and $117,000, respectively, which included revenues of approximately $218,000 and $656,000, respectively. 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 consist of three apartment complexes, one of which is classified as held for sale at September 30, 2005 (as discussed in "Results of Operations"). The following table sets forth the average occupancy of the remaining properties for each of the nine months ended September 30, 2005 and 2004: Average Occupancy Property 2005 2004 Rocky Creek Apartments (1) Augusta, Georgia 92% 95% Village Gardens Apartments (2) Fort Collins, Colorado 87% 84% (1) The Corporate General Partner attributes the decrease in average occupancy at Rocky Creek Apartments to recent military deployments in the Augusta area. (2) The Corporate General Partner attributes the increase in average occupancy at Village Gardens Apartments to competitive pricing and increased resident retention efforts. 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 Corporate 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 Corporate 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 Corporate General Partner may use rental concessions and rental rate reductions to offset softening market conditions; accordingly, there is no guarantee that the Corporate 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 realized a net loss of approximately $52,000 and $241,000 for the three and nine months ended September 30, 2005, respectively, compared to net income of approximately $21,508,000 and $21,505,000 for the three and nine months ended September 30, 2004, respectively. In accordance with Statement of Financial Accounting Standards ("SFAS") No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets", the accompanying statements of operations for the three and nine months ended September 30, 2004 have been restated as of January 1, 2004 to reflect the operations of Carriage House Apartments as income (loss) from discontinued operations. The operations of River Reach Apartments for the three and nine months ended September 30, 2004 are also reflected as loss from discontinued operations due to its sale to a third party in August 2004. The Partnership sold Carriage House Apartments to a third party on October 26, 2005. In accordance with SFAS No. 144, the assets and liabilities of Carriage House Apartments have been classified as held for sale at September 30, 2005. On August 30, 2004, the Partnership sold River Reach Apartments to a third party for approximately $31,683,000. After payment of closing costs of approximately $645,000, the net proceeds received by the Partnership were approximately $31,038,000. The Partnership used a portion of the proceeds to repay the mortgage encumbering the property of approximately $10,091,000. The sale of the property resulted in a gain of approximately $24,356,000 for the three and nine months ended September 30, 2004. In addition, the Partnership recorded a loss on early extinguishment of debt of approximately $2,727,000, as a result of the write off of unamortized loan costs and a prepayment penalty, which is included in income (loss) from discontinued operations. The results of the property's operations for the three and nine months ended September 30, 2004 of approximately $2,000 and $78,000, respectively, are included in income (loss) from discontinued operations and include revenues of approximately $465,000 and $1,891,000, respectively. The loss from discontinued operations for the nine months ended September 30, 2005 includes income of approximately $13,000 as a result of the collection of tenant receivables. The operations of Carriage House Apartments, income of approximately $12,000 and loss of approximately $42,000 for the three and nine months ended September 30, 2005, respectively, and income of approximately $1,000 and loss of approximately $25,000 for the three and nine months ended September 30, 2004, respectively, are shown as income (loss) from discontinued operations. Included in income (loss) from discontinued operations are revenues of approximately $178,000 and $543,000 for the three and nine months ended September 30, 2005, respectively, and approximately $177,000 and $541,000 for the three and nine months ended September 30, 2004, respectively. The Partnership recognized a loss from continuing operations of approximately $64,000 and $212,000 for the three and nine months ended September 30, 2005, respectively, compared to a loss from continuing operations of approximately $124,000 and $177,000 for the three and nine months ended September 30, 2004, respectively. The decrease in loss from continuing operations for the three months ended September 30, 2005 is due to a decrease in total expenses and an increase in total revenues. The increase in loss from continuing operations for the nine months ended September 30, 2005 is due to an increase in total expenses and a decrease in total revenues. The decrease in total expenses for the three months ended September 30, 2005 is due to decreases in both operating and general and administrative expenses, partially offset by increases in both depreciation and interest expense. The increase in total expenses for the nine months ended September 30, 2005 is due to increases in both operating and interest expense, partially offset by a decrease in general and administrative expenses. Depreciation expense remained relatively consistent for the nine months ended September 30, 2005. Property tax expense remained relatively constant for both the three and nine months ended September 30, 2005. The decrease in operating expenses for the three months ended September 30, 2005 is primarily due to a decrease in advertising expense at Village Gardens Apartments. The increase in depreciation expense for the three months ended September 30, 2005 is due to property improvements and replacements placed into service at both of the Partnership's investment properties during the past twelve months. The increase in operating expenses for the nine months ended September 30, 2005 is due to increases in payroll related expenses at both of the Partnership's investment properties, contract maintenance expense at Rocky Creek Apartments and utility expenses at Village Gardens Apartments. Interest expense increased for both periods primarily due to an increase in the interest rate on the variable rate mortgage encumbering Rocky Creek Apartments, partially offset by scheduled principal payments made on the mortgages encumbering the Partnership's investment properties, which reduced the carrying balance of the loans. General and administrative expenses decreased for both the three and nine months ended September 30, 2005 due to a decrease in management reimbursements to the Corporate General Partner as allowed under the Partnership Agreement primarily as a result of the 2004 sale of River Reach Apartments. Also included in general and administrative expenses for both the three and nine months ended September 30, 2005 and 2004 are costs associated with the quarterly and annual communications with investors and regulatory agencies and the annual audit required by the Partnership Agreement. The increase in total revenues for the three months ended September 30, 2005 is due to an increase in rental income, partially offset by a decrease in other income. The decrease in total revenues for the nine months ended September 30, 2005 is due to a decrease in other income, partially offset by an increase in rental income. The increase in rental income for the three months ended September 30, 2005 is primarily due to the increases in occupancy at Village Gardens Apartments and the average rental rate at Rocky Creek Apartments, partially offset by a decrease in the average rental rate at Village Gardens Apartments. The increase in rental income for the nine months ended September 30, 2005 is primarily due to the increases in occupancy at Village Gardens Apartments and the average rental rate at Rocky Creek Apartments and reduced bad debt expense at both properties, partially offset by the decreases in occupancy at Rocky Creek Apartments and the average rental rate at Village Gardens Apartments. The decrease in other income for both periods is primarily due to a decrease in lease cancellation fees at Rocky Creek Apartments. Liquidity and Capital Resources At September 30, 2005 the Partnership had cash and cash equivalents of approximately $111,000, compared to approximately $559,000 at September 30, 2004. Cash and cash equivalents decreased approximately $158,000, from December 31, 2004, due to approximately $297,000 and $74,000 of cash used in investing and financing activities, respectively, partially offset by approximately $213,000 of cash provided by operating activities. Cash used in investing activities consisted of property improvements and replacements, partially offset by net receipts from an escrow account maintained by the mortgage lender. Cash used in financing activities consisted of principal payments made on the mortgages encumbering the Partnership's investment properties and payments on advances from an affiliate of the Corporate General Partner, partially offset by advances received from an affiliate. 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 investment 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 Corporate 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. Rocky Creek Apartments During the nine months ended September 30, 2005, the Partnership completed approximately $87,000 in capital improvements at Rocky Creek Apartments, consisting primarily of recreation facility upgrades and floor covering replacement. The improvements were funded from operating cash flow. 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 2005. Such capital expenditures will depend on the physical condition of the property as well as anticipated cash flow generated by the property. Carriage House Apartments During the nine months ended September 30, 2005, the Partnership completed approximately $199,000 in capital improvements at Carriage House Apartments, consisting primarily of exterior painting, heating and air conditioning upgrades, and floor covering replacement. These improvements were funded from replacement reserves and operating cash flow. The Partnership sold Carriage House Apartments to a third party on October 26, 2005. Village Gardens Apartments During the nine months ended September 30, 2005, the Partnership completed approximately $85,000 in capital improvements at Village Gardens Apartments, consisting primarily of interior improvements and floor covering replacement. These improvements were funded from operating cash flow and advances from an affiliate of the Corporate 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 2005. 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, Partnership reserves, or advances from an affiliate of the Corporate General Partner. 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. The Partnership's assets are thought to be sufficient for any near term needs (exclusive of capital improvements) of the Partnership. The mortgage encumbering Village Gardens Apartments of approximately $3,958,000 matures in January 2021, at which time the mortgage is scheduled to be fully amortized. The mortgage encumbering Rocky Creek Apartments of approximately $2,182,000 has a maturity date of September 15, 2007, at which time a balloon payment of approximately $2,068,000 is due. The Corporate General Partner has the option to extend the maturity on the Rocky Creek Apartments loan for another five years. After that period the Corporate General Partner will attempt to refinance such indebtedness and/or sell the property. If the property cannot be refinanced or sold, the Partnership will risk losing such property through foreclosure. Subsequent to September 30, 2005, the Partnership entered into a Purchase and Sale Contract to sell Rocky Creek Apartments to a third party for a purchase price of approximately $4,450,000. The anticipated closing date for the transaction is January 31, 2006. At September 30, 2005, the carrying amounts of the mortgage note payable and investment property for Rocky Creek Apartments are approximately $2,182,000 and $1,791,000, respectively. The operating results of Rocky Creek Apartments for the three and nine months ended September 30, 2005 were income of approximately $5,000 and $12,000, respectively, which included revenues of approximately $218,000 and $634,000, respectively. The operating results of the property for the three and nine months ended September 30, 2004 were income of approximately $31,000 and $117,000, respectively, which included revenues of approximately $218,000 and $656,000, respectively. The Partnership distributed the following amounts during the nine months ended September 30, 2005 and 2004 (in thousands except per unit data):
Nine Months Nine Months Ended Per Limited Ended Per Limited September 30, Partnership September 30, Partnership 2005 Unit 2004 Unit Operations $ -- $ -- $ 100 $ 2.34 Sale (1) -- -- 17,900 422.93 $ -- $ -- $18,000 $425.27
(1) Proceeds from the sale of River Reach Apartments in August 2004. Subsequent to September 30, 2005 the Partnership distributed approximately $1,088,000 to the limited partners ($25.71 per limited partnership unit) from proceeds from the sale of Carriage House Apartments. Future cash distributions will depend on the levels of net cash generated from operations, the timing of debt maturities, property sales and/or refinancings. The Partnership's cash available for distribution is reviewed on a monthly basis. There can be no assurance that the Partnership will generate sufficient funds from operations, after required capital improvements, to permit additional distributions to its partners during 2005 or subsequent periods. Other In addition to its indirect ownership of the general partner interests in the Partnership, AIMCO and its affiliates owned 28,435 limited partnership units (the "Units") in the Partnership representing 67.18% of the outstanding Units at September 30, 2005. 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 Corporate General Partner. As a result of its ownership of 67.18% of the outstanding Units, AIMCO and its affiliates are in a position to control all such voting decisions with respect to the Partnership. Although the Corporate General Partner owes fiduciary duties to the limited partners of the Partnership, the Corporate General Partner also owes fiduciary duties to AIMCO as its sole stockholder. As a result, the duties of the Corporate General Partner, as corporate general partner, to the Partnership and its limited partners may come into conflict with the duties of the Corporate General Partner to AIMCO as its sole stockholder. Critical Accounting Policies and Estimates The 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 Partnership's investment properties are recorded at cost, less accumulated depreciation, unless considered impaired. If events or circumstances indicate that the carrying amount of a 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 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. 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 Corporate 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 Corporate 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 Corporate 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 Corporate 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". With regard to the second appeal, the Court of Appeals reversed the order requiring the Objector to pay referee fees. On April 26, 2005, the Court of Appeals lifted the stay of a pending appeal related to the Heller action and the trial court's order striking the complaint. On April 28, 2005, the Objector filed a Petition for Review with the California Supreme Court in connection with the opinion vacating the order approving settlement and remanding for further findings. On June 10, 2005, the California Supreme Court denied Objector's Petition for Review and the Court of Appeals sent the matter back to the trial court on June 21, 2005. The parties intend to ask the trial court to make further findings in connection with settlement consistent with the Court of Appeal's remand order. 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. 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 October 27, 2005, the Court denied Objector's peremptory challenge and struck Objector's motion to disqualify for cause. No hearing has been set on Objector's remaining motions. On November 3, 2005, Objector and his counsel filed a writ of mandate to the Court of Appeals challenging the court's October 27, 2005 order. The Corporate 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. AIMCO Properties L.P. and NHP Management Company, both affiliates of the Corporate General Partner, are defendants in a lawsuit alleging that they 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. The complaint, filed in the United States District Court for the District of Columbia, attempts to bring 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. and NHP Management Company failed to compensate maintenance workers for time that they were required to be "on-call". Additionally, the complaint alleges AIMCO Properties L.P. and NHP Management Company failed to comply with the FLSA in compensating maintenance workers for time that they worked in excess of 40 hours in a week. In June 2005 the Court conditionally certified the collective action on both the on-call and overtime issues, which allows the plaintiffs to provide notice of the collective action to all non-exempt maintenance workers from August 7, 2000 through the present. Those employees will have the opportunity to opt-in to the collective action, and AIMCO Properties, L.P. and NHP Management Company will have the opportunity to move to decertify the collective action. Because the court denied plaintiffs' motion to certify state subclasses, on September 26, 2005, the plaintiffs filed a class action with the same allegations in the Superior Court of California (Contra Costa County). 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 consolidated financial condition or results of operations. Similarly, the Corporate General Partner does not believe that the ultimate outcome will have a material adverse effect on the Partnership's financial condition or results of operations. Item 5. Other Information None. 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. SHELTER PROPERTIES VI By: Shelter Realty VI Corporation Corporate 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 14, 2005 SHELTER PROPERTIES VI EXHIBIT INDEX Exhibit Number Description of Exhibit 3 See Exhibit 4 (a) 4 (a) Amended and Restated Certificate and Agreement of Limited Partnership (included as Exhibit A to the Prospectus of Registrant dated March 22, 1984 contained in Amendment No. 1 to Registration Statement No. 2-86995, of Registrant filed March 21, 1984 (the "Prospectus") and incorporated herein by reference.) (b) Subscription Agreement and Signature Page (included as Exhibits 4 (A) and 4 (B) 8 to the Prospectus and incorporated herein by reference). 10(iii) Contracts related to refinancings of debt: (g) Multifamily Note dated December 15, 2000 between Shelter Properties VI and Reilly Mortgage Group, Inc., a District of Columbia corporation, securing Village Gardens Apartments filed as Exhibit 10(iii)(g) to the Partnership's Form 8-K Filed February 1, 2001 and incorporated herein by reference. (h) Multifamily Deed of Trust, Assignment of Rents, and Security Agreement dated December 15, 2000 between Shelter VI and Reilly Mortgage Group, Inc., a District of Columbia corporation, securing Village Gardens Apartments. Filed as Exhibit 10(iii)(h) to the Partnership's Form 8-K filed February 1, 2001 and incorporated herein by reference. (j) Loan Agreement by and among Shelter Properties VI, and other affiliated partnerships, and GMAC Commercial Mortgage Corporation, a California corporation, to secure credit facility, dated September 16, 2002. Filed as Exhibit 10(iii)(j) of the Partnership's Quarterly Report on Form 10-QSB for the quarterly period ended September 30, 2002 and incorporated herein by reference. (k) Multifamily Note by and among Shelter Properties VI and GMAC Commercial Mortgage Corporation, a California corporation, to secure loan for Rocky Creek Apartments. Filed as Exhibit 10(iii)(k) of the Partnership's Quarterly Report on Form 10-QSB for the quarterly period ended September 30, 2002 and incorporated herein by reference. (l) Multifamily Note by and among Shelter Properties VI and GMAC Commercial Mortgage Corporation, a California corporation, to secure loan for Carriage House Apartments. Filed as Exhibit 10(iii)(l) of the Partnership's Quarterly Report on Form 10-QSB for the quarterly period ended September 30, 2002 and incorporated herein by reference. 10(iv) Contracts related to disposition of properties: (g) Purchase and Sale Contract between Shelter Properties VI Limited Partnership, a South Carolina limited partnership, and Neighborhood Realty, Inc., a Florida corporation, dated June 23, 2004 filed with Form 8-K on September 3, 2004 and incorporated herein by reference. (h) Amendment of Purchase and Sale Contract between Shelter VI Limited Partnership, a South Carolina limited Partnership, and JNM River Reach, Ltd., a Florida limited partnership, dated August 30, 2004 filed with Form 8-K on September 3, 2004 and incorporated herein by reference. (i) Purchase and Sale Contract between Shelter VI Limited Partnership and Juniper Investment Group, Ltd., dated May 19, 2005, filed with the Partnership Quarterly Report on Form 10-QSB for the quarterly period ended June 30, 2005 and incorporated herein by reference. (j) First Amendment to Purchase and Sale Contract - Carriage House Apartments, dated June 7, 2005, filed with the Partnership Quarterly Report on Form 10-QSB for the quarterly period ended June 30, 2005 and incorporated herein by reference. (k) Second Amendment to Purchase and Sale Contract - Carriage House Apartments, dated July 7, 2005, filed with the Partnership Quarterly Report on Form 10-QSB for the quarterly period ended June 30, 2005 and incorporated herein by reference. (l) Third Amendment to Purchase and Sale Contract - Carriage House Apartments, dated July 26, 2005, filed with the Partnership Quarterly Report on Form 10-QSB for the quarterly period ended June 30, 2005 and incorporated herein by reference. 31.1 Certification of equivalent of Chief Executive Officer pursuant to Securities Exchange Act Rules 13a-14(a)/15d-4(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. Exhibit 31.1 CERTIFICATION I, Martha L. Long, certify that: 1. I have reviewed this quarterly report on Form 10-QSB of Shelter Properties VI; 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 14, 2005 /s/Martha L. Long Martha L. Long Senior Vice President of Shelter Realty VI 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 Shelter Properties VI; 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 14, 2005 /s/Stephen B. Waters Stephen B. Waters Vice President of Shelter Realty VI 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 Shelter Properties VI Limited Partnership (the "Partnership"), for the quarterly period ended September 30, 2005 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 14, 2005 /s/Stephen B. Waters Name: Stephen B. Waters Date: November 14, 2005 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-----