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EX-32.1 - EXHIBIT 32.1 - CENTURY PROPERTIES FUND XIVcpf14_ex32z1.htm
EX-31.2 - EXHIBIT 31.2 - CENTURY PROPERTIES FUND XIVcpf14_ex31z2.htm
EX-31.1 - EXHIBIT 31.1 - CENTURY PROPERTIES FUND XIVcpf14_ex31z1.htm

 

 

UNITED 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 June 30, 2011

 

or

 

[ ]   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 0-9242

 

 

CENTURY PROPERTIES FUND XIV

(Exact name of registrant as specified in its charter)

 

California

94-2535195

(State or other jurisdiction of

(I.R.S. Employer

incorporation or organization)

Identification No.)

 

55 Beattie Place, PO Box 1089

Greenville, South Carolina  29602

(Address of principal executive offices)

 

(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 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 (232.405 of this chapter) 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, 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.

 

 

CENTURY PROPERTIES FUND XIV

 

CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands)

 

 

 

June 30,

2011

December 31,

2010

Assets held for sale:

 

 

Cash and cash equivalents

$    124

$    103

Receivables and deposits

     113

     121

Other assets

     258

     250

Investment property:

 

 

Land

   1,090

   1,090

Buildings and related personal property

  11,960

  14,369

Total investment property

  13,050

  15,459

Less accumulated depreciation

  (10,252)

  (12,451)

Investment property, net

   2,798

   3,008

Total assets

$  3,293

$  3,482

 

 

 

Liabilities and Partners' Deficit

 

 

Liabilities related to assets held for sale:

 

 

Accounts payable

$     62

$      9

Tenant security deposit liabilities

      84

      87

Accrued property taxes

      72

      95

Other liabilities

     138

     171

Due to affiliates

     187

     114

Mortgage notes payable

  10,412

  10,466

Total liabilities

  10,955

  10,942

 

 

 

Partners' Deficit

 

 

General partners

     (154)

     (150)

Limited partners

   (7,508)

   (7,310)

Total partners’ deficit

   (7,662)

   (7,460)

Total liabilities and partners’ deficit

$  3,293

$  3,482

 

See Accompanying Notes to Consolidated Financial Statements


 

 

CENTURY PROPERTIES FUND XIV

 

CONSOLIDATED STATEMENTS OF DISCONTINUED OPERATIONS

(Unaudited)

(In thousands, except per unit data)

 

 

 

 

Three Months Ended

June 30,

2011

Three Months Ended

June 30,

2010

Six Months Ended

June 30,

2011

Six Months Ended

June 30,

2010

 

 

 

 

 

Income (loss) from continuing

  operations

 

$    --

 

$    --

 

$    --

 

$    --

Income (loss) from discontinued

  operations

 

 

 

 

Revenues:

 

 

 

 

Rental income

    526

    540

  1,057

  1,095

Other income

     85

     79

    160

    143

Total revenues

    611

    619

  1,217

  1,238

 

 

 

 

 

Expenses:

 

 

 

 

Operating

    240

    281

    532

    534

General and administrative

     40

     39

     76

     76

Depreciation

    166

    166

    335

    332

Interest

    198

    198

    404

    397

Property taxes

     36

     49

     72

     98

Total expenses

    680

    733

  1,419

  1,437

 

 

 

 

 

Casualty gain

     --

     --

     --

      8

 

 

 

 

 

Net loss

$   (69)

$  (114)

$  (202)

$  (191)

 

 

 

 

 

Net loss allocated to general

partners (2%)

 

$    (1)

 

$    (2)

 

$    (4)

 

$    (4)

Net loss allocated to limited

partners (98%)

 

$   (68)

 

$  (112)

 

$  (198)

 

$  (187)

 

 

 

 

 

Net loss per limited partnership

  unit

 

$ (1.05)

 

$ (1.73)

 

$ (3.06)

 

$ (2.89)

 

 

 

 

 

Distributions per limited

  partnership unit

 

$    --

 

$    --

 

$    --

 

$  2.79

 

See Accompanying Notes to Consolidated Financial Statements



CENTURY PROPERTIES FUND XIV

 

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)

 

 

Six Months Ended

June 30,

2011

Six Months Ended

June 30,

2010

Cash flows from operating activities:

 

 

Net loss

 $  (202)

 $  (191)

Adjustments to reconcile net loss to net cash provided

by operating activities:

 

 

Depreciation

    335

    332

Amortization of loan costs

     13

     13

Casualty gain

     --

      (8)

Change in accounts:

 

 

Receivables and deposits

      8

      4

Other assets

     (21)

      (9)

Accounts payable

     44

      1

Tenant security deposit liabilities

      (3)

      (5)

Accrued property taxes

     (23)

     20

Other liabilities

     (33)

     (31)

Due to affiliates

      1

     --

Net cash provided by operating activities

    119

    126

 

 

 

Cash flows from investing activities:

 

 

Property improvements and replacements

    (116)

     (86)

Insurance proceeds

     --

      8

Net cash used in investing activities

    (116)

     (78)

 

 

 

Cash flows from financing activities:

 

 

Payments on mortgage notes payable

     (54)

     (50)

Repayment of advances from affiliate

     (48)

     (24)

Advances from affiliate

    120

     24

Distributions to partners

     --

    (185)

Net cash provided by (used in) financing activities

     18

    (235)

 

 

 

Net increase (decrease) in cash and cash equivalents

     21

    (187)

 

 

 

Cash and cash equivalents at beginning of period

    103

    230

 

 

 

Cash and cash equivalents at end of period

$   124

$    43

 

 

 

Supplemental disclosure of cash flow information:

 

 

Cash paid for interest

$   381

$   384

Supplemental disclosure of non-cash activity:

 

 

Property improvements and replacements included in

 accounts payable

 

$     9

 

$     3

 

See Accompanying Notes to Consolidated Financial Statements


CENTURY PROPERTIES FUND XIV

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

Note A – Basis of Presentation

 

The accompanying unaudited consolidated financial statements of Century Properties Fund XIV (the "Partnership" or the "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 Partnership’s general partners are Fox Capital Management Corporation, a California corporation ("FCMC" or the "Managing General Partner"), and Fox Realty Investors ("FRI"), a California general partnership. In the opinion of the Managing General Partner, all adjustments (consisting of normal recurring items) considered necessary for a fair presentation have been included. Operating results for the three and six month periods ended June 30, 2011 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2011. The consolidated balance sheet at December 31, 2010 has been derived from the audited financial statements at that date but does not include all of the information and disclosures required by generally accepted accounting principles for complete financial statements.For further information, refer to the consolidated financial statements and footnotes thereto included in the Partnership's Annual Report on Form 10-K for the fiscal year ended December 31, 2010. The Managing General Partner and the managing general partner of FRI are subsidiaries of Apartment Investment and Management Company ("Aimco"), a publicly traded real estate investment trust.

 

At June 30, 2011 and December 31, 2010, the Partnership had outstanding 64,806 limited partnership units.

 

Certain reclassifications have been made to the 2010 balances to conform to the 2011 presentation.

 

The Partnership’s management evaluated subsequent events through the time this Quarterly Report on Form 10-Q was filed.

 

The accompanying consolidated statements of discontinued operations for the three and six months ended June 30, 2011 and 2010 are presented to reflect the operations of Sun River Apartments as discontinued operations. The Partnership entered into a sale contract on May 10, 2011 to sell Sun River Apartments to a third party. On July 21, 2011, the Partnership sold Sun River Apartments to a third party for a total sales price of $18,700,000. The respective assets and liabilities of Sun River Apartments are classified as held for sale as of June 30, 2011 and December 31, 2010.

 

Note B – Transactions with Affiliated Parties

 

The Partnership has no employees and depends on the Managing General Partner and its affiliates for the management and administration of all Partnership activities. The Partnership Agreement provides for certain payments to affiliates for services and reimbursement of certain expenses incurred by affiliates on behalf of the Partnership.

 

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 $61,000 for each of the six months ended June 30, 2011 and 2010, which are included in operating expenses.

 

Affiliates of the Managing General Partner charged the Partnership for reimbursement of accountable administrative expenses amounting to approximately $25,000 and $28,000 for the six months ended June 30, 2011 and 2010, respectively, which are included in general and administrative expenses.

 

Pursuant to the Partnership Agreement, for managing the affairs of the Partnership, the Managing General Partner is entitled to receive a Partnership management fee equal to 10% of the Partnership's adjusted cash from operations as distributed.  No such fees were earned or paid to the Managing General Partner during the six months ended June 30, 2011 or 2010, as there were no distributions from operations.

 

AIMCO Properties, L.P., an affiliate of the Managing General Partner, has made available to the Partnership a credit line of up to $150,000 per property owned by the Partnership. During the six months ended June 30, 2011 and 2010, AIMCO Properties, L.P. advanced approximately $120,000 and $24,000, respectively, to the Partnership to assist with the payment of real estate taxes and fund operating expenses at Sun River Apartments. These advances accrue interest at the prime rate plus 2% (5.25% at June 30, 2011). Interest expense for the six months ended June 30, 2011 and 2010 was approximately $3,000 and less than $1,000, respectively. During the six months ended June 30, 2011 and 2010 the Partnership repaid approximately $50,000 and $24,000, respectively, of the outstanding advances and accrued interest. At June 30, 2011 and December 31, 2010, the amount of the outstanding advances and accrued interest was approximately $187,000 and $114,000, respectively and is included in due to affiliates. Subsequent to June 30, 2011, the Partnership repaid the total outstanding advances and accrued interest with proceeds received from the sale of Sun River Apartments.

 

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 six months ended June 30, 2011, the Partnership was charged by Aimco and its affiliates approximately $15,000 for hazard insurance coverage and fees associated with policy claims administration. The Partnership was charged by Aimco and its affiliates approximately $38,000 for insurance coverage and fees associated with policy claims administration during the year ended December 31, 2010.

 

Note C – Fair Value of Financial Instruments

 

Financial Accounting Standards Board Accounting Standards Codification Topic 825, “Financial Instruments”, requires disclosure of fair value information about financial instruments, whether or not recognized in the balance sheet, for which it is practicable to estimate fair value. Fair value is defined as the amount at which the instruments could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The Partnership believes that the carrying amount of its financial instruments (except for mortgage notes payable) approximates their fair value due to the short-term maturity of these instruments. The Partnership estimates the fair value of its mortgage notes payable by discounting future cash flows using a discount rate commensurate with that currently believed to be available to the Partnership for similar term, mortgage notes payable.  At June 30, 2011, the fair value of the Partnership's mortgage notes payable at the Partnership's incremental borrowing rate was approximately $11,877,000.

 

Note D – Casualty Event

 

In October 2009, Sun River Apartments sustained damages of approximately $18,000 as a result of a water line break. No apartment units were damaged. During the six months ended June 30, 2010, the Partnership recognized a casualty gain of approximately $8,000 as a result of the receipt of insurance proceeds of approximately $8,000. The damaged assets were fully depreciated.

 

Note E – Contingencies

 

The Partnership is unaware of any 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 potentially hazardous materials  present on a property, including lead-based paint, asbestos, polychlorinated biphenyls, petroleum-based fuels, and other miscellaneous materials. Such laws often impose liability without regard to whether the owner or operator knew of, or was responsible for, the release or presence of such materials. The presence of, or the failure to manage or remedy properly, these materials 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 improper management of these materials 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 these materials through a licensed disposal or treatment facility. Anyone who arranges for the disposal or treatment of these materials 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 responsible for environmental liabilities or costs associated with its property.

 

Note F – Investment Property

 

During the three months ended June 30, 2011, the Partnership retired and wrote off personal property no longer being used that had a cost basis of approximately $2,534,000 and accumulated depreciation of approximately $2,534,000.

 

Note G – Subsequent Event

 

On July 21, 2011, the Partnership sold Sun River Apartments, its sole investment property, to a third party for a total sales price of $18,700,000 less a repair credit of $100,000. The net proceeds realized by the Partnership were approximately $18,353,000 after payment of closing costs of approximately $247,000. The Partnership used approximately $10,403,000 to repay the mortgages encumbering the property. The Partnership anticipates recognizing a gain, during the third quarter of 2011, of approximately $15,489,000 as a result of the sale. In addition, the Partnership anticipates recognizing a loss on extinguishment of debt, during the third quarter of 2011, of approximately $2,746,000 as a result of the write off of unamortized loan costs and payment of prepayment penalties of approximately $2,561,000. Due to the sale of its sole investment property, the Partnership expects to liquidate by June 30, 2012. Subsequent to June 30, 2011, the Partnership distributed approximately $4,654,000 of proceeds from the sale to its partners (approximately $70.37 per limited partnership unit).

 


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 Quarterly Report contains or may contain information that is forward-looking within the meaning of the federal securities laws, including, without limitation, statements regarding the Partnership’s ability to maintain current or meet projected occupancy, rental rates and property operating results and the effect of redevelopments. Actual results may differ materially from those described in these forward-looking statements and, in addition, will be affected by a variety of risks and factors, some of which are beyond the Partnership’s control, including, without limitation: financing risks, including the availability and cost of financing and the risk that the Partnership’s cash flows from operations may be insufficient to meet required payments of principal and interest; natural disasters and severe weather such as hurricanes; national and local economic conditions, including the pace of job growth and the level of unemployment; 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; real estate risks, including fluctuations in real estate values and the general economic climate in local markets and competition for residents in such markets; insurance risk, including the cost of insurance; 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 consolidated financial statements and the notes thereto, as well as the other documents the Partnership files from time to time with the Securities and Exchange Commission.

 

The Partnership's investment property consists of one residential apartment complex. The following table sets forth the average occupancy of the property for the six months ended June 30, 2011 and 2010:

 

 

Average Occupancy

Property

2011

2010

 

 

 

Sun River Apartments

95%

96%

  Tempe, Arizona

 

 

 

Results of Operations

 

The statements of discontinued operations for both the three and six months ended June 30, 2011 and 2010 are presented to reflect the operations of Sun River Apartments as discontinued operations. On July 21, 2011, the Partnership sold Sun River Apartments to an unaffiliated third party for a total sales price of $18,700,000. The respective assets and liabilities of Sun River Apartments are classified as held for sale as of June 30, 2011 and December 31, 2010.

 

The Partnership recognized losses from discontinued operations of approximately $69,000 and $202,000 for the three and six months ended June 30, 2011, respectively, and approximately $114,000 and $191,000 for the three and six months ended June 30, 2010, respectively. The decrease in loss from discontinued operations for the three months ended June 30, 2011 is due to a decrease in total expenses, partially offset by a decrease in total revenues. The increase in loss from discontinued operations for the six months ended June 30, 2011 is due to a decrease in total revenues and the recognition of a casualty gain during the six months ended June 30, 2010, partially offset by a decrease in total expenses. Total revenues decreased for the three and six months ended June 30, 2011 due to a decrease in rental income, partially offset by an increase in other income. The decrease in rental income for both periods is primarily due to a decrease in the average rental rate at the Partnership’s investment property and an increase in bad debt expense. The increase in other income for both the three and six months ended June 30, 2011 is primarily due to increases in parking income, cleaning and damage fees and late fees at the Partnership’s investment property, partially offset by decreases in lease cancellation fees and pet fees.

 

Total expenses decreased for both the three and six months ended June 30, 2011 due to a decrease in property tax expense. The decrease in total expenses for the three months ended June 30, 2011 is also due to a decrease in operating expenses. Operating expense remained relatively constant for the six months ended June 30, 2011. General and administrative, interest and depreciation expenses remained relatively constant for both the three and six months ended June 30, 2011. Property tax expense decreased for both periods due to a decrease in the assessed value of the property. The decrease in operating expenses for the three month period is primarily due to decreases in salaries and related benefits at the Partnership’s investment property. Operating expenses for the six month period remained relatively constant as a decrease in salaries and related benefits was offset by increases in contract services and advertising costs.

 

Included in general and administrative expenses for the three and six months ended June 30, 2011 and 2010 are management reimbursements to the Managing General Partner as allowed under the Partnership Agreement, costs associated with the quarterly and annual communications with investors and regulatory agencies and the annual audit required by the Partnership Agreement.

 

In October 2009, Sun River Apartments sustained damages of approximately $18,000 as a result of a water line break. No apartment units were damaged. During the six months ended June 30, 2010, the Partnership recognized a casualty gain of approximately $8,000 as a result of the receipt of insurance proceeds of approximately $8,000. The damaged assets were fully depreciated.

 

Liquidity and Capital Resources

 

At June 30, 2011, the Partnership had cash and cash equivalents of approximately $124,000 compared to approximately $103,000 at December 31, 2010.  The increase in cash and cash equivalents of approximately $21,000 from December 31, 2010 is due to approximately $119,000 and $18,000 of cash provided by operating and financing activities, respectively, partially offset by approximately $116,000 of cash used in investing activities. Cash provided by financing activities consisted of advances from an affiliate, partially offset by principal payments made on the mortgages encumbering the Partnership’s investment property and repayment of advances from an affiliate. Cash used in investing activities consisted of property improvements and replacements.

 

AIMCO Properties, L.P., an affiliate of the Managing General Partner, has made available to the Partnership a credit line of up to $150,000 per property owned by the Partnership. During the six months ended June 30, 2011 and 2010, AIMCO Properties, L.P. advanced approximately $120,000 and $24,000, respectively, to the Partnership to assist with the payment of real estate taxes and fund operating expenses at Sun River Apartments. These advances accrue interest at the prime rate plus 2% (5.25% at June 30, 2011). Interest expense for the six months ended June 30, 2011 and 2010 was approximately $3,000 and less than $1,000, respectively. During the six months ended June 30, 2011 and 2010 the Partnership repaid approximately $50,000 and $24,000, respectively, of the outstanding advances and accrued interest. At June 30, 2011 and December 31, 2010, the amount of the outstanding advances and accrued interest was approximately $187,000 and $114,000, respectively and is included in due to affiliates. Subsequent to June 30, 2011, the Partnership repaid the total outstanding advances and accrued interest with proceeds received from the sale of Sun River Apartments.

 

During the six months ended June 30, 2011, the Partnership completed approximately $125,000 of capital improvements at Sun River Apartments, consisting primarily of appliance and floor covering replacements, roof replacement and air conditioning unit upgrades. These improvements were funded from operations. On July 21, 2011, the Partnership sold Sun River Apartments to a third party.

 

The Partnership’s assets are thought to be sufficient for any near-term needs of the Partnership. The mortgage indebtedness encumbering Sun River Apartments of approximately $10,412,000 required monthly payments of principal and interest and a balloon payment of approximately $8,811,000 due at maturity in 2021. In connection with the sale of the property on July 21, 2011, the mortgages were repaid with sale proceeds.

 

The Partnership distributed the following amounts during the six months ended June 30, 2011 and 2010 (in thousands, except per unit data):

 

 

Six Months Ended

Per Limited

Six Months Ended

Per Limited

 

June 30,

Partnership

June 30,

Partnership

 

2011

Unit

2010

Unit

 

 

 

 

 

Financing (1)

$    --

$    --

$   185

$  2.79

 

(1)   Proceeds from the October 2009 second mortgage obtained on Sun River Apartments.

 

Subsequent to June 30, 2011, the Partnership distributed approximately $4,654,000 of proceeds from the sale of Sun River Apartments to its partners (approximately $70.37 per limited partnership unit).

 

The Partnership’s cash available for distribution will be reviewed on a quarterly basis. Future cash distributions will depend on the amount of cash remaining after fully liquidating the Partnership.

 

Other

 

In addition to its indirect ownership of the general partner interests in the Partnership, Aimco and its affiliates owned 46,528.05 limited partnership units (the "Units") in the Partnership representing 71.80% of the outstanding Units at June 30, 2011.  A number of these Units were acquired pursuant to tender offers made by Aimco or its affiliates. Pursuant to the Partnership Agreement, unitholders holding a majority of the Units are entitled to take action with respect to a variety of matters that include, but are not limited to, voting on certain amendments to the Partnership Agreement and voting to remove the Managing General Partner.  As a result of its ownership of 71.80% of the outstanding Units, Aimco and its affiliates are in a position to influence all voting decisions with respect to the Partnership. However, AIMCO IPLP, L.P., an affiliate which owns 26,641.05 of the Units, is required to vote its Units: (i) against any proposal to increase the fees and other compensation payable by the Partnership to the Managing General Partner and any of its affiliates; and (ii) with respect to any proposal made by the Managing General Partner or any of its affiliates, in proportion to votes cast by third party Unit holders.  Except for the foregoing, no other limitations are imposed on AIMCO IPLP, L.P.'s or any other of Aimco's affiliates' right to vote each Unit held. Although the Managing General Partner owes fiduciary duties to the limited partners of the Partnership, the Managing General Partner also owes fiduciary duties to Aimco as its sole stockholder. As a result, the duties of the Managing General Partner, as managing general partner, to the Partnership and its limited partners may come into conflict with the duties of the Managing General Partner to Aimco as its sole stockholder.

 

Critical Accounting Policies and Estimates

 

The consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States which require the Partnership to make estimates and assumptions. The Partnership believes that of its significant accounting policies, the following may involve a higher degree of judgment and complexity.

 

Impairment of Long-Lived 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 estimated 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; changes in tax laws and housing laws, including the enactment of rent control laws or other laws regulating multi-family housing; and changes in interest rates and the availability of financing.  Any adverse changes in these and other factors could cause an 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.

 

Assets Held for Sale


The Partnership classifies long-lived assets as held for sale in the period in which all of the following criteria are met: management, having the authority to approve the action, commits to a plan to sell the asset; the asset is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such assets; an active program to locate a buyer and other actions required to complete the plan to sell the asset have been initiated; the sale of the asset is probable, and transfer of the asset is expected to qualify for recognition as a completed sale, within one year; the asset is being actively marketed for sale at a price that is reasonable in relation to its current fair value and actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. Depreciation is not recorded during the period in which the long-lived asset is classified as held for sale.  When the asset is designated as held for sale, the related results of operations are presented as discontinued operations.

 

Item 4.     Controls and Procedures.

 

(a)   Disclosure Controls and Procedures.

 

The Partnership’s management, with the participation of the principal executive officer and principal financial officer of the Managing General Partner, who are the equivalent of the Partnership’s principal executive officer and principal financial officer, respectively, has evaluated the effectiveness of the Partnership’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report. Based on such evaluation, the principal executive officer and principal financial officer of the Managing General Partner, who are the equivalent of the Partnership’s principal executive officer and principal financial officer, respectively, have concluded that, as of the end of such period, the Partnership’s disclosure controls and procedures are effective.

 

(b)   Changes in Internal Control Over Financial Reporting.

 

There has been no change 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 has materially affected, or is reasonably likely to materially affect, the Partnership’s internal control over financial reporting.

 


PART II - OTHER INFORMATION

 

Item 6.     Exhibits.

 

See Exhibit Index.

 

The agreements included as exhibits to this Form 10-Q contain representations and warranties by each of the parties to the applicable agreement. These representations and warranties have been made solely for the benefit of the other parties to the applicable agreement and:

 

  • should not in all instances be treated as categorical statements of fact, but rather as a way of allocating the risk to one of the parties if those statements prove to be inaccurate;

 

  • have been qualified by disclosures that were made to the other party in connection with the negotiation of the applicable agreement, which disclosures are not necessarily reflected in the agreement;

 

  • may apply standards of materiality in a way that is different from what may be viewed as material to an investor; and

 

  • were made only as of the date of the applicable agreement or such other date or dates as may be specified in the agreement and are subject to more recent developments.

 

Accordingly, these representations and warranties may not describe the actual state of affairs as of the date they were made or at any other time. The Partnership acknowledges that, notwithstanding the inclusion of the foregoing cautionary statements, it is responsible for considering whether additional specific disclosures of material information regarding material contractual provisions are required to make the statements in this Form 10-Q not misleading. Additional information about the Partnership may be found elsewhere in this Form 10-Q and the Partnership’s other public filings, which are available without charge through the SEC’s website at http://www.sec.gov.



CENTURY PROPERTIES FUND XIV

 

EXHIBIT INDEX

 

 

Exhibit Number    Description of Exhibit

 

3.4               Agreement of Limited Partnership, incorporated by reference to Exhibit A to the Prospectus of the Partnership dated September 11, 1978, and thereafter supplemented, included in the Partnership's Registration Statement on Form S-11 (Reg. No. 2-61526).

 

10.7              Multifamily Note, dated October 2, 2009, between Century Sun River, Limited Partnership, an Arizona limited partnership and Wachovia Multifamily Capital, Inc., a Delaware corporation. (Incorporated by reference to the Registrant’s Current Report on Form 8-K dated October 7, 2009).

 

10.8              Multifamily Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing, dated October 2, 2009, between Century Sun River, Limited Partnership, an Arizona limited partnership and Wachovia Multifamily Capital, Inc., a Delaware corporation. (Incorporated by reference to the Registrant’s Current Report on Form 8-K dated October 7, 2009).

  

10.9              Guaranty, dated October 2, 2009, between AIMCO Properties, L.P., a Delaware limited partnership, and Wachovia Multifamily Capital, Inc., a Delaware corporation. (Incorporated by reference to the Registrant’s Current Report on Form 8-K dated October 7, 2009).

 

10.10             Amended and Restated Multifamily Note (Recast Transaction), dated October 2, 2009, between Century Sun River, Limited Partnership, an Arizona limited partnership and Federal Home Loan Mortgage Corporation. (Incorporated by reference to the Registrant’s Current Report on Form 8-K dated October 7, 2009).

 

10.11             Amended and Restated Multifamily Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing (Recast Transaction), dated October 2, 2009, between Century Sun River, Limited Partnership and Federal Home Loan Mortgage Corporation. (Incorporated by reference to the Registrant’s Current Report on Form 8-K dated October 7, 2009).

  

10.12             Amended and Restated Guaranty (Recast Transaction), dated October 2, 2009, between AIMCO Properties, L.P., a Delaware limited partnership, and Federal Home Loan Mortgage Corporation. (Incorporated by reference to the Registrant’s Current Report on Form 8-K dated October 7, 2009).

 

10.13             Purchase and Sale Contract, dated May 10, 2011, between Century Sun River, Limited Partnership, an Arizona limited partnership and Holland Acquisition Co, LLC, a Washington limited liability company. (Incorporated by reference to the Registrant’s Current Report on Form 8-K dated May 10, 2011).

 

10.14             First Amendment to Purchase and Sale Contract, dated June 9, 2011, between Century Sun River, Limited Partnership, an Arizona limited partnership and Sun River Village, L.P., a Delaware limited partnership. (Incorporated by reference to the Registrant’s Current Report on Form 8-K dated June 9, 2011).

 

31.1              Certification of equivalent of Chief Executive Officer pursuant to Securities Exchange Act Rules 13a-14(a)/15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

 

31.2              Certification of equivalent of Chief Financial Officer pursuant to Securities Exchange Act Rules 13a-14(a)/15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

 

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