0000711642-08-000550.txt : 20081113 0000711642-08-000550.hdr.sgml : 20081113 20081113094030 ACCESSION NUMBER: 0000711642-08-000550 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20080930 FILED AS OF DATE: 20081113 DATE AS OF CHANGE: 20081113 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: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-13261 FILM NUMBER: 081182992 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 10-Q 1 sp6908a_10q.htm 10Q FORM 10-QSB—QUARTERLY OR TRANSITIONAL REPORT UNDER SECTION 13 OR 15(d) OF

STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2008

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________________ to ________________

Commission file number 0-13261

SHELTER PROPERTIES VI

(Exact name of registrant 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

(Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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.

[X] Yes [ ] No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer [ ]

Accelerated filer [ ]

Non-accelerated filer [ ]

(Do not check if a smaller reporting company)

Smaller reporting company [X]

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

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

SHELTER PROPERTIES VI

BALANCE SHEETS

(in thousands, except unit data)

	September 30,	December 31,
	2008	2007
	(Unaudited)	(Note)
Assets held for sale:
Cash and cash equivalents	$ 35	$ 27
Receivables and deposits	52	41
Restricted escrow (Notes A and C)	800	- --
Other assets	112	110
Investment property:
Land	420	420
Buildings and related personal property	5,529	5,399
	5,949	5,819
Less accumulated depreciation	(4,083)	(3,863)
	1,866	1,956
	$ 2,865	$ 2,134

Liabilities and Partners' Capital (Deficiency)
Liabilities held for sale:
Accounts payable	$ 70	$ 116
Tenant security deposit liabilities	33	28
Accrued property taxes	40	56
Other liabilities	132	118
Deferred revenue (Notes A and C)	800	- --
Due to affiliates (Note B)	665	408
Mortgage note payable	3,484	3,612
	5,224	4,338

Partners' Capital (Deficiency)
General partners	236	238
Limited partners (42,302 units issued and
outstanding)	(2,595)	(2,442)
	(2,359)	(2,204)
	$ 2,865	$ 2,134

Note: The balance sheet at December 31, 2007 has been derived from the audited financial statements at that date but does not include all the information and footnotes required by generally accepted accounting principles for complete financial statements.

See Accompanying Notes to Financial Statements

SHELTER PROPERTIES VI

STATEMENTS OF DISCONTINUED OPERATIONS

(Unaudited)

(in thousands, except per unit data)

	Three Months Ended		Nine Months Ended
	September 30,		September 30,
	2008	2007	2008	2007

Loss from continuing operations	$ - --	$ --	$ - --	$ - --
Loss from discontinued operations:
Revenues:
Rental income	$ 279	$ 261	$ 816	$ 759
Other income	43	66	164	159
Total revenues	322	327	980	918

Expenses:
Operating	192	188	549	514
General and administrative	37	25	98	91
Depreciation	74	61	220	179
Interest	76	72	229	211
Property taxes	13	13	39	41
Total expenses	392	359	1,135	1,036

Net loss	$ (70)	$ (32)	$ (155)	$ (118)

Net loss allocated to general	$ (1)	$ - --	$ (2)	$ (1)
partners (1%)
Net loss allocated to limited	(69)	(32)	(153)	(117)
partners (99%)
	$ (70)	$ (32)	$ (155)	$ (118)

Net loss per limited partnership unit	$ (1.63)	$ (.75)	$ (3.62)	$ (2.76)

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, 2007	42,302	$ 238	$(2,442)	$(2,204)

Net loss for the nine months
ended September 30, 2008	- --	(2)	(153)	(155)

Partners' capital (deficiency)
at September 30, 2008	42,302	$ 236	$(2,595)	$(2,359)

See Accompanying Notes to Financial Statements

SHELTER PROPERTIES VI

STATEMENTS OF CASH FLOWS

(Unaudited)

(in thousands)

	Nine Months Ended
	September 30,
	2008	2007
Cash flows from operating activities:
Net loss	$ (155)	$ (118)
Adjustments to reconcile net loss to net cash provided by
operating activities:
Depreciation	220	179
Amortization of loan costs	4	4
Change in accounts:
Receivables and deposits	(11)	(4)
Other assets	(6)	(14)
Accounts payable	(10)	(13)
Tenant security deposit liabilities	5	3
Accrued property taxes	(16)	(12)
Other liabilities	14	2
Due to affiliates	76	47
Net cash provided by operating activities	121	74

Cash flows from investing activities:
Property improvements and replacements	(166)	(137)
Deposit to restricted escrow	(800)	- --
Deferred revenue	800	- --
Net cash used in investing activities	(166)	(137)

Cash flows from financing activities:
Payments on mortgage note payable	(128)	(119)
Advances from affiliate	181	145
Net cash provided by financing activities	53	26

Net increase (decrease) in cash and cash equivalents	8	(37)
Cash and cash equivalents at beginning of period	27	93

Cash and cash equivalents at end of period	$ 35	$ 56

Supplemental disclosure of cash flow information:
Cash paid for interest	$ 193	$ 201

Supplemental disclosure of non-cash activity:
Property improvements and replacements included in
accounts payable	$ 28	$ 5

Included in property improvements and replacements for the nine months ended September 30, 2008 are approximately $64,000 of property improvements and replacements, which were included in accounts payable at December 31, 2007.

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-Q and Article 8-03 of Regulation S-X. 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, 2008 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2008. For further information, refer to the financial statements and footnotes thereto included in the Partnership's Annual Report on Form 10-KSB for the fiscal year ended December 31, 2007.

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 discontinued operations for both the three and nine months ended September 30, 2008 and 2007 are presented to reflect the operations of Village Gardens Apartments as discontinued operations. The Partnership entered into a sale contract on September 29, 2008 to sell Village Gardens Apartments to a third party (see Note C – Subsequent Event). In connection with the sale contract, the Partnership received a deposit of approximately $800,000. The deposit was recorded as a restricted escrow and deferred revenue. The respective assets and liabilities of Village Gardens Apartments are classified as held for sale as of September 30, 2008 and December 31, 2007.

Note B - 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 the Partnership's property as compensation for providing property management services. The Partnership paid to such affiliates approximately $48,000 and $44,000 for the nine months ended September 30, 2008 and 2007, respectively, which are included in operating expenses.

Affiliates of the Corporate General Partner charged the Partnership for reimbursement of accountable administrative expenses amounting to approximately $57,000 and $53,000 for the nine months ended September 30, 2008 and 2007, respectively, which are included in general and administrative expenses and investment property. The portion of these reimbursements included in investment property for the nine months ended September 30, 2008 and 2007 are amounts related to construction management services provided by an affiliate of the Corporate General Partner amounting to approximately $13,000 and $11,000 for the nine months ended September 30, 2008 and 2007, respectively. At September 30, 2008 and December 31, 2007, approximately $108,000 and $59,000, respectively, of accountable administrative expenses remain unpaid and are included in due to affiliates. Subsequent to September 30, 2008 the balance owed to affiliates was paid in full with proceeds from the sale of Village Gardens Apartments (see Note C – Subsequent Event).

During the nine months ended September 30, 2008 and 2007, AIMCO Properties, L.P., an affiliate of the Corporate General Partner advanced the Partnership approximately $181,000 and $145,000, respectively, to cover operating expenses at Village Gardens Apartments. Interest is charged at the prime rate plus 2% (7.00% at September 30, 2008) and was approximately $28,000 and $4,000 for the nine months ended September 30, 2008 and 2007, respectively. At September 30, 2008 and December 31, 2007, approximately $557,000 and $349,000, respectively, of advances and associated accrued interest remained unpaid and are included in due to affiliates. Subsequent to September 30, 2008 the advances and accrued interest owed to AIMCO Properties, L.P. was paid in full with proceeds from the sale of Village Gardens Apartments (see Note C – Subsequent Event).

The Partnership insures its property 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 property 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, 2008, the Partnership was charged by AIMCO and its affiliates approximately $26,000 for insurance coverage and fees associated with policy claims administration. Additional charges will be incurred by the Partnership during 2008 as other insurance policies renew later in the year. The Partnership was charged by AIMCO and its affiliates approximately $27,000 for insurance coverage and fees associated with policy claims administration during the year ended December 31, 2007.

Note C – Subsequent Event

On October 22, 2008, the Partnership sold Village Gardens Apartments to a third party for a gross sales price of $8,000,000. The net proceeds realized by the Partnership were approximately $7,929,000 after payment of closing costs of approximately $71,000. The Partnership used approximately $3,470,000 of the net proceeds to repay the mortgage encumbering the property. The Partnership anticipates recognizing a gain of approximately $6,037,000 during the fourth quarter of 2008 as a result of the sale. In addition, the Partnership anticipates recognizing a loss on extinguishment of debt of approximately $806,000 due to the write-off of unamortized loan costs and a prepayment penalty associated with the payment of the mortgage of approximately $733,000. Subsequent to September 30, 2008, the Partnership distributed approximately $2,413,000 of the net proceeds from the sale to its limited partners or approximately $57.04 per limited partnership unit.

Note D – Contingencies

The Partnership has previously disclosed in its quarterly, annual and current reports the legal proceedings related to the Nuanes and Heller actions. 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 Appeal had remanded the matter for further findings. On August 31, 2006, an objector filed an appeal from the order. The Court of Appeal issued an opinion on February 20, 2008, affirming the order approving the settlement and judgment entered thereto, and the California Supreme Court thereafter denied the objector’s petition for review. All appeals have now been exhausted, and the Court’s order approving the settlement and entering judgment is now final. Payments associated with the settlement were disbursed during September 2008.

As previously disclosed, AIMCO Properties, L.P. and NHP Management Company, both affiliates of the Corporate General Partner, were defendants in a lawsuit, filed as a collective action in August 2003 in the United States District Court for the District of Columbia, alleging that they willfully violated the Fair Labor Standards Act (“FLSA”) by failing to pay maintenance workers overtime for time worked in excess of 40 hours per week (“overtime claims”). The plaintiffs also contended that AIMCO Properties, L.P. and NHP Management Company failed to compensate maintenance workers for time that they were required to be "on-call" (“on-call claims”). In March 2007, the court in the District of Columbia decertified the collective action. In July 2007, plaintiffs’ counsel filed individual cases in Federal court in 22 jurisdictions. In the second quarter 2008, AIMCO Properties, L.P. settled the overtime cases involving 652 plaintiffs and established a framework for resolving the 88 remaining “on-call” claims and the attorneys’ fees claimed by plaintiffs’ counsel. As a result, the lawsuits asserted in the 22 Federal courts will be dismissed. During the three months ended September 30, 2008, the Partnership was charged approximately $2,000 for settlement amounts for alleged unpaid overtime to employees who had worked at the Partnership’s investment property. At this time, the 88 remaining “on-call” claims and the attorneys’ fees claimed by plaintiffs’ counsel are not resolved. The Corporate General Partner is uncertain as to the amount of any additional loss that may be allocable to the Partnership. Therefore, the Partnership cannot estimate whether any additional loss will occur or a potential range of loss.

The Partnership is unaware of any other pending or outstanding litigation matters involving it or its investment property 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 conjunction 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 property, the Partnership could potentially be liable for environmental liabilities or costs associated with its property.

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 policies, procedures, third-party audits and training and the Corporate 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 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.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward-looking statements in certain circumstances. Certain information included in this Report contains or may contain information that is forward-looking, including, without limitation, statements regarding the effect of redevelopments, the Partnership’s future financial performance, including the Partnership’s ability to maintain current or meet projected occupancy and rent levels, and the effect of government regulations. Actual results may differ materially from those described in the forward-looking statements and, in addition, will be affected by a variety of risks and factors that are beyond the Partnership’s control including, without limitation: natural disasters such as hurricanes; national and local economic conditions; the general level of interest rates; energy costs; the terms of governmental regulations that affect the Partnership’s property and interpretations of those regulations; the competitive environment in which the Partnership operates; financing risks, including the risk that the Partnership’s cash flows from operations may be insufficient to meet required payments of principal and interest; real estate risks, including fluctuations in real estate values and the general economic climate in local markets and competition for tenants in such markets; insurance risks; development risks; litigation, including costs associated with prosecuting or defending claims and any adverse outcomes; and possible environmental liabilities, including costs, fines or penalties that may be incurred due to necessary remediation of contamination of properties presently owned or previously owned by the Partnership. Readers should carefully review the Partnership’s financial statements and the notes thereto, as well as the risk factors described in the documents the Partnership files from time to time with the Securities and Exchange Commission.

The Partnership's investment property consists of one apartment complex. The following table sets forth the average occupancy of the property for each of the nine months ended September 30, 2008 and 2007:

	Average
	Occupancy
Property	2008	2007

VillageGardensApartments
Fort Collins, Colorado	97%	97%

The Partnership’s financial results depend upon a number of factors including the ability to attract and maintain tenants at the investment property, interest rates on mortgage loans, costs incurred to operate the investment property, 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 property 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

In accordance with Statement of Financial Accounting Standards ("SFAS") No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets”, the statements of discontinued operations for both the three and nine months ended September 30, 2008 and 2007 are presented to reflect the operations of Village Gardens Apartments as discontinued operations. The Partnership entered into a sale contract on September 29, 2008 to sell Village Gardens Apartments to a third party (see Item 1. Financial Statements Note C – Subsequent Event). In connection with the sale contract, the Partnership received a deposit of approximately $800,000. The deposit was recorded as a restricted escrow and deferred revenue. The respective assets and liabilities of Village Gardens Apartments are classified as held for sale as of September 30, 2008 and December 31, 2007.

The Partnership realized a net loss of approximately $70,000 and $155,000 for the three and nine months ended September 30, 2008, respectively, compared to a net loss of approximately $32,000 and $118,000 for the three and nine months ended September 30, 2007, respectively. The increase in net loss for the three months ended September 30, 2008 is due to an increase in total expenses. Total revenues for the three months ended September 30, 2008 remained relatively constant as an increase in rental income was offset by a decrease in other income. The increase in net loss for the nine months ended September 30, 2008 is due to an increase in total expenses, partially offset by an increase in total revenues. Total revenues increased for the nine months ended September 30, 2008 due to an increase in rental income. Rental income increased for both the three and nine months ended September 30, 2008 due to an increase in the average rental rate at the Partnership’s investment property. Other income decreased for the three months ended September 30, 2008 due to a one time receipt of unclaimed property that was discovered to belong to the Partnership during the third quarter of 2007, partially offset by an increase in tenant utility reimbursements at the Partnership’s investment property.

Total expenses increased for the three months ended September 30, 2008 due to increases in general and administrative, depreciation and interest expenses. Total expenses increased for the nine months ended September 30, 2008 due to increases in operating, general and administrative, depreciation and interest expenses. Property tax expense remained relatively constant for the comparable periods. Operating expenses increased for the nine months ended September 30, 2008 due to increases in property and management fee expenses, partially offset by a decrease in maintenance expense. Property expense increased for the nine months ended September 30, 2008 primarily due to increases in salaries and related benefits and utility costs. Management fees increased for the nine months ended September 30, 2008 due to an increase in rental income upon which the fee is based. Maintenance expense decreased for the nine months ended September 30, 2008 primarily due to decreases in maintenance materials and supplies. Depreciation expense increased for both the three and nine months ended September 30, 2008 due to property improvements and replacements placed into service at the property during the past twelve months. Interest expense increased for both the three and nine months ended September 30, 2008 due to an increase in interest expense on advances from AIMCO Properties, L.P., an affiliate of the Corporate General Partner, as a result of an increase in advances received, partially offset by a decrease in interest expense due to principal payments on the mortgage encumbering the Partnership’s investment property.

General and administrative expense increased for the three and nine months ended September 30, 2008 primarily due to an increase in audit and tax preparation expenses. Included in general and administrative expense for the three and nine months ended September 30, 2008 and 2007 are management reimbursements to the Corporate General Partner as allowed under the Partnership Agreement. Also included in general and administrative expense are costs associated with the quarterly and annual communications with investors and regulatory agencies and the annual audit required by the Partnership Agreement.

Liquidity and Capital Resources

At September 30, 2008 the Partnership had cash and cash equivalents of approximately $35,000, compared to approximately $56,000 at September 30, 2007. Cash and cash equivalents increased approximately $8,000, from December 31, 2007, due to approximately $121,000 and $53,000 of cash provided by operating and financing activities, respectively, partially offset by $166,000 of cash used in investing activities. Cash used in investing activities consisted of property improvements and replacements and a deposit to restricted escrow related to the deposit received for the sale of Village Gardens Apartments, partially offset by the deferred recognition of the proceeds. Cash provided by financing activities consisted of advances received from AIMCO Properties, L.P., an affiliate of the Corporate General Partner, partially offset by payments of principal made on the mortgage encumbering the Partnership’s investment property. 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 property 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.

During the nine months ended September 30, 2008, the Partnership completed approximately $130,000 of capital improvements at Village Gardens Apartments, consisting primarily of recreation facility improvements, and water heater, appliance, and floor covering replacements. These improvements were funded from operating cash flow. On October 22, 2008, the Partnership sold Village Garden Apartments to a third party.

The Partnership’s assets are thought to be generally sufficient for any near term needs of the Partnership. The mortgage indebtedness encumbering Village Gardens Apartments of approximately $3,484,000 was scheduled to mature in January 2021, at which time the mortgage was scheduled to be fully amortized. The mortgage was repaid on October 22, 2008 with proceeds from the sale of Village Gardens Apartments.

There were no distributions made to the partners during the nine months ended September 30, 2008 and 2007. The Partnership’s cash available for distribution is reviewed on a monthly basis. Subsequent to September 30, 2008, the Partnership distributed approximately $2,413,000 of the net proceeds received from the October 2008 sale of Village Gardens Apartments to its limited partners or approximately $57.04 per limited partnership unit. Future cash distributions will depend on the amount of cash remaining after fully liquidating the Partnership.

The Partnership Agreement provides for partners to receive distributions from the net proceeds of the sales of properties, the net proceeds from refinancings and net cash from operations as those terms are defined in the Partnership Agreement. The Partnership Agreement requires that the limited partners be furnished with a statement of Net Cash from Operations as such term is defined in the Partnership Agreement. Net Cash from Operations should not be considered an alternative to net (loss) income as an indicator of the Partnership's operating performance or to cash flows as a measure of liquidity. Below is a reconciliation of net cash provided by operating activities as disclosed in the statements of cash flows included in “Item 1. Financial Statements” to Net Cash from Operations as defined in the Partnership Agreement.

	Nine months ended
	September 30,
	2008	2007
	(in thousands)
Net cash provided by operating activities	$ 121	$ 74
Payments on mortgage note payable	(128)	(119)
Property improvements and replacements	(166)	(137)
Changes in reserves for net operating
liabilities	(52)	(9)
Net cash used in operations	$ (225)	$ (191)

Other

In addition to its indirect ownership of the general partner interests in the Partnership, AIMCO and its affiliates owned 28,440 Units in the Partnership representing 67.23% of the outstanding Units at September 30, 2008. 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 67.23% of the outstanding Units, AIMCO and its affiliates are in a position to control all 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 Asset

Investment property is 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 the 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 property. 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 asset.

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 4T. 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) Changes in Internal Control Over Financial Reporting.

There have been no significant changes in the Partnership’s internal control over financial reporting (as 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

Item 6. Exhibits

See Exhibit Index.

SIGNATURES

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

	SHELTER PROPERTIES VI

	By: Shelter Realty VI Corporation
	Corporate General Partner

Date: November 13, 2008	By: /s/Martha L. Long
	Martha L. Long
	Senior Vice President

Date: November 13, 2008	By: /s/Stephen B. Waters
	Stephen B. Waters
	Vice President

SHELTER PROPERTIES VI

EXHIBIT INDEX

Exhibit 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 refinancing of debt:

(g) Multifamily Note dated December 15, 2000 between Shelter Properties VI and Reilly Mortgage Group, Inc., a District of Columbiacorporation, securing Village Gardens Apartments filed as Exhibit 10(iii)(g) to the Partnership’s Current Report on 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 Columbiacorporation, securing Village Gardens Apartments. Filed as Exhibit 10(iii)(h) to the Partnership’s Current Report on Form 8-K filed February 1, 2001 and incorporated herein by reference.

10(iv) (o) Agreement for Purchase and Sale and Joint Escrow Instructions between Shelter Properties VI Limited Partnership, a South Carolina limited partnership, and the affiliated Selling Partnerships and JRK Property Holdings, Inc., a California corporation and JRK Birchmont Advisors, LLC, a Delaware limited liability company, dated September 29, 2008. Incorporated herein by reference to current report on Form 8-K dated September 29, 2008.

10(iv) (p) First Amendment to Agreement for Purchase and Sale and Joint Escrow Instructions between Shelter Properties VI Limited Partnership, a South Carolina limited partnership, and the affiliated Selling Partnerships and JRK Property Holdings, Inc., a California corporation and JRK Birchmont Advisors, LLC, a Delaware limited liability company, a Delaware limited liability company, dated September 30, 2008. Incorporated herein by reference to current report on Form 8-K dated September 29, 2008.

10(iv) (q) Second Amendment to Agreement for Purchase and Sale and Joint Escrow Instructions between Shelter Properties VI Limited Partnership, a South Carolina limited partnership, and the affiliated Selling Partnerships and JRK Property Holdings, Inc., a California corporation and JRK Birchmont Advisors, LLC, a Delaware limited liability company, a Delaware limited liability company, dated October 2, 2008. Incorporated herein by reference to current report on Form 8-K dated September 29, 2008.

10(v) (r) Third Amendment to Agreement for Purchase and Sale and Joint Escrow Instructions between Shelter Properties VI Limited Partnership, a South Carolina limited partnership, and the affiliated Selling Partnerships and JRK Property Holdings, Inc., a California corporation and JRK Birchmont Advisors, LLC, a Delaware limited liability company, a Delaware limited liability company, dated October 21, 2008. Incorporated herein by reference to current report on Form 8-K dated October 22, 2008.

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.

EX-31.1 2 sp6_ex31z1.htm EXHIBIT 31.1 Exhibit 31

Exhibit 31.1

CERTIFICATION

I, Martha L. Long, certify that:

1. I have reviewed this quarterly report on Form 10-Q 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 registrant as of, and for, the periods presented in this report;

4. The registrant'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)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)), for the registrant 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 registrant, 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) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant'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

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant'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 registrant'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 registrant's internal control over financial reporting.

Date: November 13, 2008

/s/Martha L. Long

Martha L. Long

Senior Vice President of Shelter Realty VI Corporation, equivalent of the chief executive officer of the Partnership

EX-31.2 3 sp6_ex31z2.htm EXHIBIT 31.2 Exhibit 31

Exhibit 31.2

CERTIFICATION

I, Stephen B. Waters, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Shelter Properties VI;

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: November 13, 2008

/s/Stephen B. Waters

Stephen B. Waters

Vice President of Shelter Realty VI Corporation, equivalent of the chief financial officer of the Partnership

EX-32.1 4 sp6_ex32z1.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-Q of Shelter Properties VI (the "Partnership"), for the quarterly period ended September 30, 2008 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, 2008

	/s/Stephen B. Waters
	Name: Stephen B. Waters
	Date: November 13, 2008

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.