Note B - Transactions With Affiliated Parties | 3 Months Ended |
Mar. 31, 2014 |
Notes | ' |
Note B - Transactions With Affiliated Parties | ' |
Note B - Transactions with Affiliated Parties |
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The Partnership has no employees and depends on the Managing General Partner and its affiliates for the management and administration of all Partnership activities. The Partnership Agreement provides for certain payments to affiliates for services and as reimbursement of certain expenses incurred by affiliates on behalf of the Partnership. |
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Affiliates of the Managing 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 $63,000 and $61,000 for the three months ended March 31, 2014 and 2013, respectively, which are included in operating expenses. |
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Affiliates of the Managing General Partner charged the Partnership for reimbursement of accountable administrative expenses amounting to approximately $12,000 and $51,000 for the three months ended March 31, 2014 and 2013, respectively, which is included in general and administrative expenses and investment property. The portion of these reimbursements included in investment property for the three months ended March 31, 2014 and 2013 are construction management services provided by an affiliate of the Managing General Partner of approximately $3,000 and $41,000, respectively. At December 31, 2013, approximately $163,000, of reimbursements were due to the Managing General Partner and are included in due to affiliates. There were no such reimbursements due to the Managing General Partner at March 31, 2014. |
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For services relating to the administration of the Partnership and operation of the Partnership's property, the Managing General Partner is entitled to receive payment for non-accountable expenses up to a maximum of $150,000 per year, based upon the number of Partnership units sold, subject to certain limitations. No such reimbursements were made during the three months ended March 31, 2014 or 2013. |
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As compensation for services rendered in managing the Partnership, the Managing General Partner is entitled to receive Partnership management fees in conjunction with distributions of cash from operations, subject to certain limitations. No such Partnership management fees were earned or paid during the three months ended March 31, 2014 or 2013. |
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The Partnership may receive advances of funds from AIMCO Properties, L.P., an affiliate of the Managing General Partner and the holder of a majority of the beneficial interest of the Partnership. There were no such advances received during the three months ended March 31, 2014 and 2013. The advances bear interest at the prime rate plus 2% (5.25% at March 31, 2014) per annum. Interest expense was approximately $140,000 and $126,000 for the three months ended March 31, 2014 and 2013, respectively. At March 31, 2014 and December 31, 2013, the total advances and accrued interest owed to AIMCO Properties, L.P. was approximately $10,915,000 and $10,775,000, respectively, and is included in due to affiliates. Subsequent to March 31, 2014, the Partnership paid $100,000 of accrued interest due to AIMCO Properties, L.P. The Partnership may receive additional advances of funds from AIMCO Properties, L.P. although AIMCO Properties, L.P. is not obligated to provide such advances. For more information on AIMCO Properties, L.P., including copies of its audited balance sheet, please see its reports filed with the Securities and Exchange Commission. |
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Upon the sale of the Partnership’s property, NPI Equity will be entitled to an Incentive Compensation Fee equal to 3% of the difference between the sales price of the property and the appraised value for such property at February 1, 1992. Payment of the Incentive Compensation Fee is subordinated to the receipt by the limited partners, of: (a) distributions from capital transaction proceeds of an amount equal to their appraised investment in the Partnership at February 1, 1992, and (b) distributions from all sources (capital transactions as well as cash flow) of an amount equal to six percent (6%) per annum cumulative, non-compounded, on their appraised investment in the Partnership at February 1, 1992. Prior to 2013, these preferences were met. |
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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 Managing General Partner. During the three months ended March 31, 2014, the Partnership was charged by Aimco and its affiliates approximately $43,000 for hazard insurance coverage and fees associated with policy claims administration. Additional charges will be incurred by the Partnership during 2014 as other insurance policies renew later in the year. The Partnership was charged by Aimco and its affiliates approximately $60,000 for insurance coverage and fees associated with policy claims administration during the year ended December 31, 2013. |