Uniprop Manufactured Housing Communities Income Fund Ii 10-Q 2015 Q3 Quarterly report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

xQUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarter Ended September 30, 2015

¨TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File No. 0-16701

UNIPROP MANUFACTURED HOUSING COMMUNITIES INCOME FUND II,

a Michigan Limited Partnership

(Exact name of registrant as specified in its charter)

MICHIGAN (State or other jurisdiction of incorporation or organization) 38-2702802 (I.R.S. employer identification number)

280 Daines Street, Birmingham, Michigan 48009

(Address of principal executive offices) (Zip Code)

(248) 645-9220

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(g) of the Act:

units of beneficial assignments of limited partnership interest

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.

Yesx No¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ¨   No ¨

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, or 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. (Check one):

Large Accelerated filer¨Accelerated filer¨ Non-accelerated filer¨Smaller reporting companyx

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Securities Exchange Act of 1934). Yes¨Nox

As of September 30, 2015, the number of units of limited partnership interest of the registrant outstanding was 3,303,387. The Partnership units of interest are not traded in any public market.

UNIPROP MANUFACTURED HOUSING COMMUNITIES INCOME FUND II,

A MICHIGAN LIMITED PARTNERSHIP

INDEX

		Page
PART I	FINANCIAL INFORMATION
ITEM 1.	FINANCIAL STATEMENTS
	Balance Sheets September 30, 2015 (Unaudited) and December 31, 2014	3
	Statements of Operations Nine and Three months ended September 30, 2015 and 2014 (Unaudited)	4
	Statement of Partners’ Equity Nine months ended September 30, 2015 (Unaudited)	5
	Statements of Cash Flows Nine months ended September 30, 2015 and 2014 (Unaudited)	6
	Notes to Financial Statements September 30, 2015 (Unaudited)	7
ITEM 2.	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	9
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	12
ITEM 4.	CONTROLS AND PROCEDURES	12
PART II	OTHER INFORMATION
ITEM 1.	LEGAL PROCEEDINGS	13
ITEM 1A.	RISK FACTORS	13
ITEM 6.	EXHIBITS	13

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UNIPROP MANUFACTURED HOUSING COMMUNITIES INCOME FUND II,

A MICHIGAN LIMITED PARTNERSHIP

BALANCE SHEETS

ASSETS	September 30,2015			December 31, 2014
	(Unaudited)
Properties:
Buildings And Improvements	$	22,188,474		$	4,661,946
Land		4,661,946			22,199,759
Furniture And Equipment		343,996			343,996
Manufactured Homes and Improvements		2,684,483			2,350,758
		29,878,899			29,556,459
Less Accumulated Depreciation		(20,307,592	)		(19,629,412	)
Net Property and Equipment		9,571,307			9,927,047
Cash And Cash Equivalents		18,417,482			7,383,116
Unamortized Finance Costs		620,078			927,256
Deferred Home Relocation Costs		123,444			330,595
Other Assets		1,320,243			635,326
Assets of Discontinued Operations		0			10,472,850
Total Assets	$	30,052,554		$	29,676,190

LIABILITIES & PARTNERS' EQUITY	September 30,2015		December 31, 2014
	(Unaudited)
Accounts Payable	$	109,661	$	27,056
Other Liabilities		643,039		339,417
Notes Payable		21,106,551		21,473,993
Liabilities of Discontinued Operations		0		6,841,887
Total Liabilities	$	21,859,251	$	28,682,353
Partners' Equity:
General Partner		497,903		417,980
Unit Holders		7,695,400		575,857
Total Partners' Equity		8,193,303		993,837
Total Liabilities And Partners' Equity	$	30,052,554	$	29,676,190

See Notes to Financial Statements

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UNIPROP MANUFACTURED HOUSING COMMUNITIES INCOME FUND II,

A MICHIGAN LIMITED PARTNERSHIP        

STATEMENTS OF OPERATIONS	NINE MONTHS ENDED						THREE MONTHS ENDED
(unaudited)	September 30, 2015			September 30, 2014			September 30, 2015			September 30, 2014
Income:
Rental Income	$	3,631,821		$	3,537,134		$	1,217,600		$	1,176,133
Home Sale Income		50,114			76,840			45,002			2
Other		392,657			322,322			128,856			104,585
Total Income		4,074,592			3,936,296			1,391,458			1,280,720
Operating Expenses:
Administrative Expenses
(Including $312,773, $312,100, $94,310 and $104,607, in Property Management Fees Paid to an Affiliate for the Nine and Three Month Period Ended September 30, 2015 and 2014, respectively)		1,779,048			1,286,067			857,735			428,214
Property Taxes		311,400			350,100			103,800			116,700
Utilities		226,619			210,474			75,250			78,907
Property Operations		393,350			432,123			147,189			141,651
Depreciation		678,181			706,014			203,326			236,989
Interest		872,957			901,686			285,176			301,754
Home Sale Expense		42,060			69,194			40,060			0
Total Operating Expenses		4,303,615			3,955,658			1,712,536			1,304,215
Income from Continuing Operations	$	(229,023	)	$	(19,362	)	$	(321,078	)	$	(23,495	)
Income (Loss) from Discontinued Operations	$	8,221,302		$	(138,087	)	$	8,117,503		$	(42,204	)
Net Income	$	7,992,279		$	(157,449	)	$	7,796,425		$	(65,699	)
Income Per Unit:
Continuing Operations	$	(0.07	)	$	(0.01	)	$	(0.10	)	$	(0.01	)
Discontinued Operations	$	2.49		$	(0.04	)	$	2.46		$	(0.01	)
Total Income Per Unit	$	2.42		$	(0.05	)	$	2.36		$	(0.02	)
Distribution Per Unit:	$	0.24		$	0.24		$	0.08		$	0.08
Weighted Average Number Of Units
Of Beneficial Assignment Of Limited Partnership Interest Outstanding During The Nine and Three Month Period Ended September 30, 2015 and 2014.		3,303,387			3,303,387			3,303,387			3,303,387

See Notes to Financial Statements

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STATEMENT OF PARTNERS' EQUITY (Unaudited)
	General Partner		Unit Holders			Total
Balance, December 31, 2014	$	417,980	$	575,857		$	993,837
Distributions		0		(792,813	)		(792,813	)
Net Income		79,923		7,912,356			7,992,279
Balance as of September 30, 2015	$	497,903	$	7,695,400		$	8,193,303

See Notes to Financial Statements

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UNIPROP MANUFACTURED HOUSING COMMUNITIES INCOME FUND II,

A  MICHIGAN LIMITED PARTNERSHIP  

STATEMENTS OF CASH FLOWS
(Unaudited)
	NINE MONTHS ENDED
	September 30, 2015			September 30, 2014
Cash Flows From Operating Activities:
Net Income	$	7,992,279		$	(157,449	)
Adjustments To Reconcile Net Income
To Net Cash (Used In) Provided By
Operating Activities:
Depreciation		678,181			1,247,921
Amortization of Financing Costs		307,179			64,394
Amortization of Home Relocation Costs		207,151			207,108
Payment of Home Relocation Costs		0			(1,500	)
Gain on Sale of Discontinued Operations		(9,937,675	)		0
Gain on Sale of Manufactured Homes		21,577			16,824
Increase In Other Assets		(360,620	)		(499,437	)
(Decrease) Increase In Accounts Payable		(34,581	)		136,599
Increase In Other Liabilities		104,888			251,538
Total Adjustments		(9,013,900	)		1,423,447
Net Cash (Used In) Provided By Operating Activities		(1,021,621	)		1,265,998
Cash Flows Provided By (Used In) Investing Activities:
Investment in Manufactured Homes and Improvements		(562,483	)		(967,772	)
Purchase of Property and Equipment		(19,147	)		(253,721	)
Proceeds from Sale of Discontinued Operations		20,267,770			0
Proceeds from Sale of Manufactured Homes		121,785			211,934
Net Cash Provided By (Used In) Investing Activities		19,807,925			(1,009,559	)
Cash Flows Used In Financing Activities:
Distributions To Unit Holders		(792,813	)		(792,813	)
Payments On Notes Payable		(6,893,409	)		(501,928	)
Net Cash Used In Financing Activities		(7,686,222	)		(1,294,741	)
Increase (Decrease) In Cash		11,100,082			(1,038,302	)
Cash, Beginning		7,317,400			8,584,140
Cash, Ending	$	18,417,482		$	7,545,838

See Notes to Financial Statements

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UNIPROP MANUFACTURED HOUSING COMMUNITIES INCOME FUND II,

A MICHIGAN LIMITED PARTNERSHIP

NOTES TO FINANCIAL STATEMENTS

September 30, 2015 (Unaudited)

1. Basis of Presentation and Accounting Policies:

The accompanying unaudited 2015 financial statements of Uniprop Manufactured Housing Communities Income Fund II, a Michigan Limited Partnership (the “Partnership”) have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The balance sheet at December 31, 2014 has been derived from the audited financial statements at that date. Operating results for the three and nine months ended September 30, 2015 are not necessarily indicative of the results that may be expected for the year ending December 31, 2015, or for any other interim period. For further information, refer to the consolidated financial statements and footnotes thereto included in the Partnership’s Form 10-K for the year ended December 31, 2014.

During the fourth quarter of 2012, Management initiated the Sunshine Village Paid Home Relocation Program (“Program”). The Program was offered exclusively to residents of Seminole Estates, a 704 site, 55 and over manufactured home community in Hollywood, Florida that announced its closure. The Program expired in the first quarter of 2013. By the end of the first quarter of 2014, all 41 residents have successfully relocated. The Partnership has incurred expenditures of $903,232, of which $816,203 has been capitalized and is being amortized as a reduction of rental revenue over the life of the residents’ three year rental period. The Program is completed and Management estimates no additional relocation costs will be incurred. At September 30, 2015, $123,444 remains unamortized.

The carrying amounts of cash, cash equivalents, and accounts payable approximate their fair values due to their short-term nature. The fair value of mortgage notes payable approximates their carrying amounts based on current borrowing rates.

2. Discontinued Operations:

As described in the Form 8-K dated August 20, 2015, the Partnership closed on the sale of the three manufactured housing communities located in Michigan, namely Camelot Manor, Dutch Hills and Stonegate with Meritus Communities LLC for a purchase price of $14,200,000, less closing costs resulting in net proceeds in the amount of $13,777,650. The Partnership recognized a gain of $6,022,387. The mortgage obligations related to these properties of $3,052,889 were paid in full at the time of closing with proceeds from the sale. As part of the repayment on the mortgage notes, the Partnership incurred $346,693 in prepayment penalties. The Partnership also wrote off $116,113 of unamortized deferred financing costs related to the mortgage notes in connection with this transaction. The net cash proceeds resulting from the sale and pay off of the mortgage notes were approximately $10,108,000.

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As described in the Form 8-K dated September 28, 2015, the Partnership closed on the sale of the El Adobe manufactured housing community located in Las Vegas, Nevada with Lakeshore Communities Inc. for a purchase price of $6,700,000, less closing costs resulting proceeds in the amount of $6,490,120. The Partnership recognized a gain of $3,915,288. The mortgage obligation related to this property of $3,321,049 was paid in full at the time of closing. As part of the repayment on the mortgage notes, the Partnership incurred a prepayment penalty of $370,612. The Partnership also wrote off $126,672 of unamortized deferred financing costs related to the mortgage note in connection with this transaction. The net cash proceeds resulting from the sale and pay off of the mortgage note were approximately $2,458,000.

As a result of the sales, the Partnership has classified the four communities and the associated financial results as “discontinued operations” in the accompanying statement of operations for all historical periods. The major classes of revenue and expenses of discontinued operations for the period ending September 30, 2015 were as follows:

	Three months ended September 30, 2015			Nine months ended September 30, 2015
Rent revenue		351,623			1,611,630
Home sale revenue		30,507			71,671
Other revenue		128,229			1,081,426
Total revenue		510,359			2,764,727
Administrative expense		949,991			2,106,097
Property taxes		91,060			226,076
Utilities		63,775			243,655
Property operations		175,097			397,410
Depreciation		0			259,144
Interest expense		58,578			230,480
Home sale expenses		31,940			58,148
Total operating expenses		1,370,441			3,521,010
Income (loss) from property operations		(860,082	)		(756,283	)
Gain on sale of the properties		9,937,675			9,937,675
Prepayment penalties and write-off of deferred charges on debt extinguishment		(960,090	)		(960,090	)
Net income from discontinued operations	$	8,117,503		$	8,221,302

The assets and liabilities related to discontinued operations as of December 31, 2014 are as follows: Total Assets of $10,472,850 consist of Current Assets of $258,581 and Fixed Assets of $28,228,628 less Accumulated Depreciation of $18,014,359. Total Liabilities of $6,841,887 consist of Current Liabilities of $315,920 and Long Term Liabilities of $6,525.967.

3. Mortgage Payable:

The Partnership has two mortgage notes payable with Cantor Commercial Real Estate collateralized by Sunshine Village, located in Davie, Florida and West Valley, located in Las Vegas, Nevada. The mortgages are payable in monthly installments of interest and principal through August, 2023. These refinanced notes bear interest at a fixed rate of 5.09% with principal payments based on a twenty-five year amortization period. As of September 30, 2015 the balance on these notes was $18,509,312.

The Partnership also has a mortgage note payable with StanCorp Mortgage Investors LLC (“StanCorp”) collateralized by Ardmor Village, located in Lakeville, Minnesota. This mortgage is payable in monthly installments of interest and principal through September 2033. Effective September 1, 2013, the available interest rate re-set option was accepted on the mortgage note with StanCorp. The new rate on this note is 5.00% and the amortization period is twenty years. Another rate re-set option is available in 2018. As of September 30, 2015 the balance on this note was $2,597,239.

Future maturities on the notes payable for the next five years and thereafter are as follows: 2015 - $126,509; 2016 - $517,231; 2017 - $547,132; 2018 - $575,908; 2019 - $606,197 and thereafter - $18,733,574.

In connection with the sale of the four properties discussed above, the mortgages payable with StanCorp related to those properties were paid off. See Note 2 for additional information.

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 ITEM 2.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTSOF OPERATIONS

Critical Accounting Policies

See Part II, Item 7 – Critical Accounting Policies, our consolidated financial statements and related notes in Part IV, Item 15 of our Annual Report on Form 10-K for the year ended December 31, 2014 filed with the SEC on March 17, 2015 for accounting policies and related estimates we believe are the most critical to understanding condensed consolidated financial statements, financial conditions and results of operations and which require complex management judgment and assumptions or involve uncertainties. There have been no material changes to the critical accounting policies and estimates previously disclosed in that report.

Liquidity and Capital Resources

Uniprop Manufactured Housing Communities Income Fund II, a Michigan Limited Partnership’s (the “Partnership”) liquidity is based, in part, upon its investment strategy. Upon acquisition, the Partnership anticipated owning the properties for seven to ten years. The three remaining properties have been owned by the Partnership for more than ten years. The General Partner may elect to have the Partnership own the properties for as long as, in the opinion of the General Partner, it is in the best interest of the Partnership to do so.

The Partnership expects to meet its short-term liquidity needs generally through its working capital and cash provided by operating activities.

On July 18, 2013, the Partnership refinanced two of the existing mortgage notes payable and executed two new mortgages payable in the amount of $19,320,000 secured by Sunshine Village, located in Davie, FL and West Valley, located in Las Vegas, NV with a new lender, namely Cantor Commercial Real Estate. The mortgage notes are payable in monthly installments of interest and principal through August, 2023. The refinanced notes bear interest at a fixed rate of 5.09% with principal payments based on a twenty-five year amortization period. As of September 30, 2015 the balance on these notes was $18,509,312.

The Partnership incurred $676,321 in financing costs as a result of the 2013 refinancing which is being amortized over the term of the loans. These costs included a 1% fee payable to an affiliate of the General Partner.

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Effective September 1, 2013, the interest rate re-set option was accepted on the remaining note with StanCorp. The new rate on this note is 5.00% and the amortization period is twenty years. Another rate re-set option is available in five years. As of September 30, 2015 the balance on this note was $2,597,239.

As described in the Form 8-K dated August 20, 2015, the Partnership closed on the sale of the three manufactured housing communities located in Michigan, namely Camelot Manor, Dutch Hills and Stonegate with Meritus Communities LLC for a purchase price of $14,200,000, less closing costs for proceeds in the amount of $13,777,650. The Partnership recognized a gain of $6,022,387. The mortgage obligations related to these properties of $3,052,889 were paid in full at the time of closing. As part of the repayment on the mortgage notes, the Partnership incurred $346,693 in prepayment penalties. The Partnership wrote off $116,113 of unamortized deferred financing costs related to the mortgage notes in connection with this transaction. The net cash proceeds resulting from the sale and pay off of the mortgage notes were approximately $10,108,000.

As described in the Form 8-K dated September 28, 2015, the Partnership closed on the sale of the El Adobe manufactured housing community located in Las Vegas, Nevada with Lakeshore Communities Inc. for a purchase price of $6,700,000, less closing costs for proceeds in the amount of approximately $6,490,120. The Partnership recognized a gain of approximately $3,915,288. The mortgage obligation related to this property of $3,321,049 was paid in full at the time of closing. As part of the repayment on the mortgage note, the Partnership incurred a prepayment penalty of $370,612. The Partnership also wrote off $126,672 of unamortized deferred financing costs related to the mortgage note in connection with this transaction. The net cash proceeds resulting from the sale and pay off of the mortgage note were approximately $2,458,000.

Subsequent to September 30, 2015, the General Partner has decided to distribute $7,003,180, or $2.12 per unit, to the unit holders for the third quarter ended September 30, 2015. The distribution is expected to be made during the quarter ending December 31, 2015.

As of September 30, 2015, the Partnership’s cash balance amounted to $18,417,482. The level of cash balance maintained is at the discretion of the General Partner.

Results of Operations

Overall, as illustrated in the following table, the Partnership's three remaining properties reported combined occupancy of 62% at the end of September 2015 versus 62% at the end of September 2014. The average monthly homesite rent as of September 30, 2015 was approximately $629; versus $611 from September 2014 (average rent not a weighted average).

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	Total		Occupied		Occupancy			Average*
	Capacity		Sites		Rate			Rent
Ardmor Village		339		148		44	%	$	568
Sunshine Village		356		256		72	%		665
West Valley		421		292		69	%		654
Total on 9/30/15:		1,116		696		62	%	$	629
Total on 9/30/14:		1,116		705		62	%	$	611

*Not a weighted average

	Gross Revenue				Net Operating Income and Net Income (Loss)						Gross Revenue				Net Operating Income and Net Income (Loss)
	9/30/2015		9/30/2014		9/30/2015			9/30/2014			09/30/2015		09/30/2014		09/30/2015			09/30/2014
	three months ended				three months ended						nine months ended				nine months ended
Ardmor	$	310,806	$	257,893	$	134,658		$	120,273		$	852,013	$	761,574	$	406,240		$	343,887
Sunshine		469,332		434,632		236,843			176,975			1,405,827		1,375,951		688,538			593,042
West Valley		606,920		584,569		379,155			345,843			1,803,914		1,776,996		1,173,292			1,188,550
		1,387,058		1,277,094		750,656			643,091			4,061,754		3,914,521		2,268,070			2,125,479
Partnership Management		4,400		3,626		(545,089	)		(107,022	)		12,838		21,775		(861,734	)		(399,607	)
Other Expense		-----		-------		(38,143	)		(20,821	)		-------		-------		(84,221	)		(137,534	)
Interest Expense		-----		-------		(285,176	)		(301,754	)		--------		-------		(872,957	)		(901,686	)
Depreciation		-----		-------		(203,326	)		(236,989	)		-------		--------		(678,181	)		(706,014	)
Continuing Operations	$	1,391,458	$	1,280,720	$	(321,078	)	$	(23,495	)	$	4,074,592	$	3,936,296	$	(229,023	)	$	(19,362	)
Discontinued Operations	$	11,082,009	$	755,779	$	8,117,503		$	(42,204	)	$	12,702,402	$	2,359,969	$	8,221,302		$	(138,087	)
	$	12,473,467	$	2,036,499	$	7,796,425		$	(65,699	)	$	16,776,994	$	6,296,265	$	7,992,279		$	(157,449	)

Net Operating Income (“NOI”) is a non-GAAP financial measure equal to net income, the most comparable GAAP financial measure, plus depreciation, interest expense, partnership management expense, and other expenses. The Partnership believes that NOI is useful to investors and the Partnership’s management as an indication of the Partnership’s ability to service debt and pay cash distributions. NOI presented by the Partnership may not be comparable to NOI reported by other companies that define NOI differently, and should not be considered as an alternative to net income as an indication of performance or to cash flows as a measure of liquidity or ability to make distributions.

Comparison of Three Months Ended September 30, 2015 to Three Months Ended September 30, 2014

Gross revenues from continuing operations increased $110,738 to $1,391,458 in 2015, from $1,280,720 in 2014. This was due to an increase in market rent value and lease home income from the prior year.

As described in the Statements of Operations, total operating expenses operations increased $408,321, to $1,712,536 in 2015, as compared to $1,304,215 in 2014. This was mainly due to an increase in administrative expenses, specifically management bonuses associated with the sales transactions.

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As a result of the aforementioned factors, the Partnership experienced a Net Loss from continuing operations of $321,078 for the third quarter of 2015 compared to a Net Loss of $23,495 for the third quarter of 2014.

Comparison of Nine Months Ended September 30, 2015 to Nine Months Ended September 30, 2014

Gross revenues from continuing operations increased $138,296 to $4,074,592 in 2015, from $3,936,296 in 2014. This was mainly due to increases in rental income and other income.

As described in the Statements of Operations, total operating expenses increased $347,957 to $4,303,615 in 2015, as compared to $3,955,658 in 2014. This was mainly due to an increase in administrative expenses, specifically management bonuses associated with the sales transactions.

As a result of the aforementioned factors, the Partnership experienced a Net Loss from continuing operations of $229,023 in 2015 as compared to a Net Loss of $19,362 in 2014. Net Income from discontinued operations, before the gain on sale of the four properties and pay off of the related mortgage notes, was $103,799 compared to a Net Loss of $95,886 in 2014.

ITEM 3.

QUANTITATIVE AND QUALITATIVE

DISCLOSURES ABOUT MARKET RISK

The Partnership is exposed to interest rate risk primarily through its borrowing activities.

There is inherent roll over risk for borrowings as they mature and are renewed at current market rates. The extent of this risk is not quantifiable or predictable because of the variability of future interest rates and the Partnership’s future financing requirements.

Note Payable: At September 30, 2015 the Partnership had notes payable outstanding in the amount of $21,106,551. Interest on two of these notes is at a fixed annual rate of 5.09% through August 2023. Interest on the remaining note is at a fixed rate of 5.00% through August 2018, at which time a rate reset option is available.

The Partnership does not enter into financial instruments transactions for trading or other speculative purposes or to manage its interest rate exposure.

ITEM 4.

CONTROLS AND PROCEDURES

As of the end of the period covered by this report, the Partnership carried out an evaluation, under the supervision and with the participation of the Principal Executive Officer and the Principal Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Exchange Act Rule 13a-15. Based upon, and as of the date of, this evaluation, the Principal Executive Officer and the Principal Financial Officer concluded that our disclosure controls and procedures are effective to ensure that information required to be disclosed in the quarterly report is recorded, processed, summarized and reported as and when required.

There was no change in the Partnership’s internal controls over financial reporting that occurred during the most recent completed quarter that has materially affected, or is reasonably likely to materially affect, the Partnership’s internal control over financial reporting.

-12- 

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The Partnership on behalf of El Adobe had filed a lawsuit against the City of Las Vegas. The primary complaint was that the City of Las Vegas charged what was being viewed as a “discriminatory” monthly service fee to keep sewer capacity available on vacant manufactured home community sites, but does not charge the same monthly service fee on vacant site built home sites. During the litigation, the City of Las Vegas had placed liens on El Adobe for unpaid sewer service fees. The Partnership has accrued those fees on its financial statements.

A trial on the matter was held on September 29, 2015 and on October 29, 2015 Judge Stefany A. Miley ruled to deny all of the claims made by El Adobe, and as a result El Adobe will not receive any relief. El Adobe has elected not to file an appeal. Thus, the matter is now concluded. 

To close on the sale of El Adobe, the Partnershipposted a bond with the title company equal to 150% of the existing liens, or $330,564.  These funds will be used to extinguish any and all obligations of the Partnershiprelated to this matter. Any remaining funds will be returned to the Partnership.

ITEM 1A. RISK FACTORS

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, “Item IA. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2014, which could materially affect our business, financial condition or future results. The risks described in our Annual Report on Form 10-K are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may adversely affect our business, financial condition and/or operating results.

ITEM 6.

EXHIBITS

Exhibit 31.1	Principal Executive Officer Certification pursuant to Rule 13a-14(a)/15d-14(a) of The Securities and Exchange Act of 1934, as amended
Exhibit 31.2	Principal Financial Officer Certification pursuant to Rule 13a-14(a)/15d-14(a) of The Securities and Exchange Act of 1934, as amended
Exhibit 32.1	Certifications pursuant to 18 U.S C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes–Oxley Act of 2002.

101.1NS XBRL Instance Document

101.SCH XBRL Taxonomy Extension Schema Document

101.CAL XBRL Taxonomy Extension Calculation Linkbase Document

101.LAB XBRL Taxonomy Extension Label Linkbase Document

101.PRE XBRL Taxonomy Extension Presentation Linkbase Document

101.DEF XBRL Taxonomy Extension Definitions Linkbase Document

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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.

Uniprop Manufactured Housing Communities
Income Fund II, a Michigan Limited Partnership
BY:	Genesis Associates Limited Partnership,
	General Partner
	BY:	Uniprop, Inc.,
		its Managing General Partner
		By:	/s/ Roger I. Zlotoff
			Roger I. Zlotoff, President
		By:	/s/ Susann E. Kehrig
			Susann E. Kehrig, Principal Financial Officer

Dated: November 12, 2015

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