FORM 10-K
ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended December 31, 2004 Commission File No.
0-15940
UNIPROP MANUFACTURED HOUSING COMMUNITIES INCOME FUND,
a Michigan Limited Partnership
(Exact name of registrant as specified in its charter)
| MICHIGAN | 38-2593067 |
| (State or other jurisdiction ofincorporation or organization) | (I.R.S. employeridentification number) |
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.
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K [ ] Indicate by check mark whether the Registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2).
Yes [ ] No [X]
The estimated aggregate Net Asset Value of the units as of March 1, 2005 (based on a 2005 appraisal of Partnership properties) held by non?affiliates was approximately $23,601,185. As of March 1, 2005 the number of units of limited partnership interest of the registrant outstanding was 30,000.
This Form 10-K contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements are based on assumptions and expectations which may not be realized and are inherently subject to risks and uncertainties, many of which cannot be predicted with accuracy and some of which might not even be anticipated. Future events and actual results, financial and otherwise, may differ materially from the results discussed in the forward-looking statements. Risks and other factors that might cause such a difference include, but are not limited to, the effect of economic and market conditions; financing risks, such as the inability to obtain debt financing on favorable terms; the level and volatility of interest rates; and failure of the Partnership's properties to generate additional income to offset increases in operating expenses, as well as other risks listed herein under Item 1.
Uniprop Manufactured Housing Communities Income Fund, a Michigan Limited Partnership (the "Partnership"), acquired, maintains, operates and ultimately will dispose of income producing residential real properties consisting of four manufactured housing communities (the "Properties"). The Partnership was organized and formed under the laws of the State of Michigan on May 16, 1985. Its principal offices are located at 280 Daines Street, Birmingham, Michigan 48009 and its telephone number is (248) 645-9261.
The Partnership filed an S?11 Registration Statement (Registration No. 2?98180) in June 1985, which was declared effective by the Securities and Exchange Commission on September 24, 1985. The Partnership thereafter offered a maximum of 30,000 units of limited partnership interest representing capital contributions by the limited partners to the Partnership of $1,000 per unit (the "Units"). The sale of all 30,000 Units was completed in March 1986, generating $30 million of contributed capital to the Partnership.
On February 10, 1986, the Partnership acquired Aztec Estates, a 645?site manufactured housing community in Margate, Florida and Kings Manor, a 314?site manufactured housing community in Ft. Lauderdale, Florida. On March 4, 1986, the Partnership acquired Old Dutch Farms, a 293?site manufactured housing community in Novi, Michigan. On March 27, 1986, the Partnership acquired The Park of the Four Seasons, a 572?site manufactured housing community in Blaine, Minnesota.
The Partnership operates the Properties as manufactured housing communities with the primary investment objectives of: (1) providing cash from operations to investors; (2) obtaining capital appreciation; and (3) preserving capital of the Partnership. There can be no assurance that such objectives can be achieved.
On March 25, 1997 the Partnership borrowed $33,500,000 from Nomura Asset Capital Corporation and secured the borrowing with liens on its Properties (the "Financing"). The note is payable in monthly installments of $251,439, including interest, through March 2027. The interest rate is 8.24% per annum through June 2007; thereafter, the interest rate will be adjusted based on the provisions of the loan agreement. The loan may be prepaid without penalty beginning in January 2007. On March 26, 1997 the Partnership distributed $30,000,000 to the Limited Partners, representing a full return of original capital contributions of $1,000 per unit held. The Partnership continues to own and operate its properties and has been able to continue to pay cash distributions to the Limited Partners, although in amounts substantially lower than the distributions paid prior to the Financing. Limited Partners continue to have an interest in the Partnership as only the original capital contributions were returned on March 26, 1997.
The Partnership's business and only industry segment is the operation of its four manufactured housing communities. For a description of the Partnership's revenues, operating profit and assets, please refer to Items 6 and 8 of this Form 10-K.
The Properties were selected from 23 manufactured housing communities then owned by affiliates of P.I. Associates Limited Partnership, a Michigan limited partnership, the General Partner (the "General Partner") of the Partnership. The Partnership rents home sites in the Properties to owners of manufactured homes. It was intended that the Partnership would hold the Properties for extended periods of time, originally anticipated to be seven to ten years after their acquisition. The General Partner has the discretion to determine when a Property is to be sold; provided, however, that the determination of whether a particular Property should be disposed of will be made by the General Partner only after consultation with an independent consultant, Manufactured Housing Services Inc. (the "Consultant"). In making their decisions they will consider relevant factors, including, current operating results of the particular Property and prevailing economic conditions, with a view to achieving maximum capital appreciation to the Partnership while considering relevant tax consequences and the Partnership's investment objectives.
The business of owning and operating residential manufactured housing communities is highly competitive, and the Partnership may be competing with a number of established companies having greater financial resources. Moreover, there has been a trend for manufactured housing community residents to purchase (where zoning permits) their home sites on a collective basis. This trend may result in increased competition with the Partnership for residents. In addition, the General Partner, its affiliates or both, have participated, and may in the future participate, directly or through other partnerships or investment vehicles in the acquisition, ownership, development, operation and sale of projects, which may be in direct competition with one or more of the Properties.
Each of the Properties competes with numerous similar facilities located in its geographic area. The Margate/Fort Lauderdale area contains approximately seven communities offering approximately 2,758 sites competing with Aztec Estates. The Davie/Fort Lauderdale area contains approximately seven communities offering approximately 3,483 sites competing with Kings Manor. Old Dutch Farms competes with approximately ten communities offering approximately 4,724 sites. Park of the Four Seasons competes with approximately 11 communities offering approximately 3,211 sites. The Properties also compete against other forms of housing, including apartment and condominium complexes, and site built homes.
The Properties owned by the Partnership are subject to certain state regulations regarding the conduct of the Partnership operations. For example, the State of Florida regulates agreements and relationships between the Partnership and the residents of Aztec Estates and Kings Manor. Under Florida law, the Partnership is required to deliver to new residents of those Properties a prospectus describing the Property and all tenant rights, Property rules and regulations, and changes to Property rules and regulations. Florida law also requires minimum lease terms, requires notice of rent increases, grants to tenant associations certain rights to purchase the community if being sold by the owner and regulates other aspects of the management of such properties. The Partnership is required to give 90 days notice to the residents of Florida properties of any rate increase, reduction in services or utilities or change in rules and regulations. If a majority of the residents object to such changes as unreasonable, the matter must be submitted to the Florida Department of Business Regulations for mediation prior to any legal adjudication of the matter. In addition, if the Partnership seeks to sell Florida Properties to the general public, it must notify any homeowners' association for the residents, and the association shall have the right to purchase the Property for the price, terms and conditions being offered to the public within 45 days of notification by the owner. If the Partnership receives an unsolicited bonafide offer to purchase the Property from any party, it must notify any such homeowners' association that it has received an offer, state to the homeowners' association the price, terms and conditions upon which the Partnership would sell the Property, and consider (without obligation) accepting an offer from the homeowners' association. The Partnership has, to the best of its knowledge, complied in all material respects with all requirements of the States of Florida, Michigan and Minnesota, where its operations are conducted.
The Partnership employs three part?time employees to perform partnership management and investor relations services. The Partnership retains an affiliate, Uniprop AM, LLC, as the property manager for each of its Properties. Uniprop AM, LLC is paid a fee equal to the lesser of 5% of the annual gross receipts from each of the Properties or the amount which would be payable to unaffiliated third parties for comparable services. Uniprop AM, LLC retains local managers on behalf of the Partnership at each of the Properties. Salaries and fringe benefits of such local managers are paid by the communities and are not included in any property management fee payable to Uniprop AM, LLC. Local managers are employees of the communities and are paid semi-monthly. The yearly salaries and expenses for local managers range from $22,000 to $52,000. Local managers have no direct management authority, make no decisions regarding operations and act only in accordance with instructions from the property manager.
The Partnership purchased all four manufactured housing communities for cash. As a result of the 1997 financing, the Properties are now encumbered with mortgages.
Each of the Properties is a modern manufactured housing community containing lighted and paved streets, side-by-side off-street parking and complete underground utility systems. The Properties consist of only the underlying real estate and improvements, not the actual homes themselves. Each of the Properties has a community center which includes offices, meeting rooms and game rooms. Each of the Properties, except Old Dutch Farms, has a swimming pool and tennis courts.
The table below contains certain information concerning the Partnership's four properties.
| Property Nameand Location |
Year Constructed |
Acreage | Number of Sites |
| Aztec EstatesSundial Circle Margate, FL |
1970 | 100 | 645 |
| Kings Manor State Road 84 & Flamingo Road Ft. Lauderdale, FL |
1972 | 45 | 314 |
| Old Dutch Farms Napier Road, Novi, MI |
1972 | 47 | 293 |
| Park of the Four Seasons 113th Ave, N.E.Blaine, MN |
1972 | 107 | 572 |
A group of current residents, on March 4, 2005 filed a class action lawsuit in the Circuit Court of Oakland County against the Partnership and the General Partner of the Partnership claiming that the Old Dutch Farms community did not honor its obligations with respect to operating various aspects of the community. The complaint requests damages, costs and injunctive relief. Counsel for the Partnership is presently reviewing and preparing an answer to the complaint on behalf of the Partnership. While the discovery process has not yet begun, the Partnership intends to vigorously defend against this claim. The amount of potential liability, if any is indeterminable at the time.
City of Novi, Michigan, as of February 11, 2004 filed a lawsuit in the Circuit Court of Oakland County against the Partnership to compel the Old Dutch Farms community to connect to the City of Novi sanitary sewer system. The Partnership has reached a settlement agreement with the City of Novi. The Partnership will pay a tap fee of $730,000 based on an estimated water use by the residents, subject to adjustments after a three year monitoring period based on actual meter reading water usage. The cost of connection and removal of the current sanitary sewer system is estimated to be approximately $200,000. The Partnership anticipates these cost will be incurred during 2005.
In connection with the settlement agreement, the partnership has obtained an unsecured $750,000 note payable to a bank requiring monthly payments of $12,500 plus interest at libor plus 1.8% and is due on December 2009. There was no outstanding balance under this agreement at December 31, 2004.
The voting privileges of the Limited Partners are restricted to certain matters of fundamental significance to the Partnership. The Limited Partners must approve certain major decisions of the General Partner if the General Partner proposes to act without the approval of the Consultant. The Limited Partners also have a right to vote with respect to the removal and replacement of the General Partner, dissolution of the Partnership, material amendments to the Partnership Agreement and the sale or other disposition of all or substantially all of the Partnership's assets, except in the ordinary course of the Partnership's disposing of the Properties. Such matters must be approved by Limited Partners holding in the aggregate more than 50% of the then outstanding Units. No matters were submitted to the Limited Partners for a vote during 2004.
| ITEM 5. | MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED SECURITY HOLDER MATTERS |
There is no established public trading market for the Units and it is not anticipated that one will ever develop. During the last two years, less than four percent of the Units have been transferred each year, excluding transfers on account of death or intra?family transfers. The Partnership believes there is no formal secondary market, or the substantial equivalent thereof, and none will develop.
The General Partner calculates the estimated net asset value of each Unit by dividing the amount of distributions that would be made to the Limited Partners in the event of the current sale of the Properties at their current appraised value, less mortgage debt and sales expenses (but without consideration to tax consequences of the sale), by 30,000. In March 2005, the Properties were appraised at an aggregate fair market value of $64,600,000. Assuming a sale of the four properties at the appraised value in March 2005, less payment of 3.0% selling expenses, mortgage debt of $31,190,519, the $1,970,000 Contingent Purchase Price due to certain partners of the General Partner, and after the 80/20% split of sale or financing proceeds with the General Partner, the net aggregate proceeds available for distribution to the Limited Partners is $23,601,185, or $786.71 per Unit. There can be no assurance that the estimated net asset value could ever be realized. As of March 1, 2005, the Partnership had approximately 2,315 Limited Partners holding 30,000 Units.
The Partnership has no equity compensation plans.
The following table sets forth the distributions per limited partnership unit for each calendar quarter in the last two fiscal years. Distributions were paid in the periods immediately subsequent to the periods in which such distributions were declared.
Distribution per Distribution to
Limited Partnership Unit General Partners
Quarter Ended
March 31, 2004 $3.00 $181,000
June 30, 2004 $3.00 $181,000
September 30, 2004 $3.00 $181,000
December 31, 2004 $3.00 $181,000
March 31, 2003 $3.00 $173,375
June 30, 2003 $3.00 $173,375
September 30, 2003 $3.00 $173,375
December 31, 2003 $3.00 $173,375
The Partnership intends to continue to declare quarterly distributions. However, distributions are determined by the General Partner and will depend on the results of the Partnership's operations.
The following table summarizes selected financial data for Uniprop Manufactured Housing Communities Income Fund, a Michigan Limited Partnership, for the periods ended December 31, 2004, 2003, 2002, 2001 and 2000:
| Fiscal Year Ended December 31, 2004 |
Fiscal Year Ended December 31, 2003 |
Fiscal Year Ended December 31, 2002 |
Fiscal Year Ended December 31, 2001 |
Fiscal Year Ended December 31, 2000 |
|
| Total Assets | $19,330,739 | $20,446,593 | $20,890,327 | $21,354,052 | $21,694,688 |
| Long Term Debt | $31,190,519 | $31,576,444 | $31,939,585 | $32,273,332 | $32,580,418 |
| Income | $10,430,726 | $10,713,194 | $10,797,708 | $10,059,885 | $10,003,551 |
| Expenses | (10,324,437) | (9,905,031) | (9,793,992) | (9,138,331) | (8,863,417) |
| Net Income | $106,289 | $808,163 | $1,003,716 | $921,554 | $1,140,134 |
| Distributions to Limited Partners, per Unit |
$12.00 | $12.00 | $12.00 | $11.75 | $10.75 |
| Income per Unit: | |||||
| Class A | $9 | $9 | $15 | $13 | $18 |
| Class B | $28 | $47 | $51 | $49 | $55 |
| Weighted average number of Units outstanding: |
|||||
| Class A | 20,230 | 20,230 | 20,230 | 20,230 | 20,230 |
| Class B | 9,770 | 9,770 | 9,770 | 9,770 | 9,770 |
| ITEM 7. | MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION |
The capital formation phase of the Partnership began on February 10, 1986, when Aztec Estates and Kings Manor were purchased by the Partnership and operations commenced. On March 4, 1986, and March 27, 1986, Old Dutch Farms and Park of the Four Seasons were purchased, respectively. From the $30,000,000 capital raised from the sale of the units, $26,400,000 was used to purchase the four Properties after deducting sales commissions, advisory fees and other organization and offering costs.
In an effort to provide Limited Partners with a full return of original capital contributions of $1,000 per unit, the General Partner, with majority consent from the Limited Partners, mortgaged the four Properties owned by the Partnership on March 25, 1997 in the aggregate amount of $33,500,000. The General Partner acknowledges that the mortgages impose some risks to the Partnership, but considers that such risks are not greater than risks typically associated with real estate financing.
The Partnership has, since inception, generated adequate amounts of cash to meet its operating needs. The Partnership retains cash reserves, which it believes will be adequate to maintain the Properties. All funds in excess of operating needs, amounts sufficient to pay debt service, and cash reserves have been distributed to the Partners quarterly.
While the Partnership is not required to maintain a working capital reserve, it has not distributed all the cash generated from operations in order to build cash reserves. As of December 31, 2004, the Partnership's cash balance amounted to $200,760. The amount of any funds placed in reserve is at the discretion of the General Partner. The Partnership expects to generate adequate amounts of cash to meet its operating needs and debt service during the next fiscal year.
The Partnership has a renewable line of credit of $1,000,000 with National City Bank of Michigan/Illinois that expires in 2005. The interest rate floats 180 basis points above the one month LIBOR. As of December 31, 2004 the line of credit held a balance of $40,000. The primary purpose for the line of credit is to meet any short-term or seasonal cash flow needs. The Partnership plans to renew the line of credit at the expiration.
The Partnership has a renewable $1,000,000 line of credit with Uniprop Home Finance, an affiliated entity, that expires on September 2006. The interest rate is the prime minus .5%. The sole purpose of this line of credit is to purchase new and used homes to be used as model homes offered for sale within the Partnership's communities. As of December 31, 2004 the outstanding balance on this line of credit was $ $565,190. The General Partner believes that continuing the model home program is in the best interest of the Partnership.
On March 25, 1997, the Partnership completed the Financing pursuant to which the Partnership borrowed $33,500,000 from Nomura Asset Capital Corporation and secured the borrowing with liens on its Properties. The note is payable in monthly installments of $251,439, including interest, through March 2027. The interest rate is 8.24% per annum through June 2007; thereafter, the interest rate will be adjusted based on the provisions of the note agreement. The loan may be prepaid without penalty beginning in January 2007.
On March 26,1997, the Partnership distributed $30,000,000 of the financing proceeds to the Limited Partners, representing a full return of original capital contributions of $1,000 per Unit held. The Partnership continues its operations and expects to be able to continue to pay cash distributions to the Limited Partners, although in amounts substantially lower than paid prior to the Financing, due to payment of debt service resulting from the Financing. Limited Partners will continue to have an interest in the Partnership. Only the original capital contributions were returned on March 26, 1997.
Future maturities on the note payable for the next five years are as follows: 2005 - $412,000; 2006 - $450,000; 2007 - $487,000, 2008 - $522,000; and 2009 - $575,000.
The yearly Partnership Management Distribution due to the General Partner for 2004 was $603,500, or 1.0% of the then most recent appraised value of the properties held by the Partnership.
The yearly Partnership Management Distribution due to the General Partner for 2004 was $634,000, or 1.0% of the then most recent appraised value of the properties held by the Partnership.
The General Partner elected to make a total distribution of $450,000 during 2004, 80.0% of which, or $360,000, was paid to the Limited Partners and 20.00% of which, or $90,000, was paid to the General Partner as the Incentive Management Interest.
For the years ended December 31, 2004 and 2003, the Partnership made distributions to Limited Partners of $12.00 per Unit held, or $360,000.
The General Partner receives a quarterly Partnership Management Distribution equal to .25% of the appraised value of the properties of the Partnership (equal to $634,000 annually based on current 2004 appraisals). Thereafter, distributions are made at the discretion of the General Partner, and are allocated 20% to the General Partner as an Incentive Management Interest and 80% to the Limited Partners. The General Partner received distributions totaling $716,375, $689,375, and $678,000 during the years ended December 31, 2004, 2003, and 2002, respectively.
The manufactured housing industry in general has experienced declining retail home sales due to restrictive financing. In addition, the U.S. economy has experienced sluggish growth during 2004 and high unemployment . These adverse conditions caused the Partnership to experience a decline in occupancy levels resulting in gross revenue decreasing by $282,468 from 2003 to 2004.
For the years ended December 31, 2004, 2003 and 2002, net income was $106,289, $808,163 and $1,003,716 on total revenues of $10,430,726, $10,713,194 and $10,797,708 respectively.
Distributions to all Partners, were $1,076,375, $1,049,375 and $1,038,000 for the years ended December 31, 2004, 2003, and 2002, respectively.
Certain employees of the Partnership are also employees of affiliates of the General Partner. The Partnership paid these employees an aggregate of $116,323, $113,289 and $96,429, in 2004, 2003 and 2002, respectively, to perform partnership management and investor relations services for the Partnership.
e.Recent Accounting Pronouncements
There are no recent accounting pronouncements that the Fund is required to adopt.
In the course of developing and evaluating accounting policies and procedures, we use estimates, assumptions and judgments to determine the most appropriate methods to be applied. Such processes are used in determining capitalization of costs related to real estate investments and potential impairment of real estate investments.
Real estate assets are stated at cost less accumulated depreciation. Expenditures for property maintenance are charged to operations as incurred, while significant renovations are capitalized. Depreciation of the buildings is recorded on the straight-line method using an estimated useful life of thirty years.
In determining the fair value of real estate investments, we consider future cash flow projections on a property by property basis, current interest rates and current market conditions of the geographical location of each property.
The following table outlines our contractual obligations (in thousands) as of December 31, 2004.Total Yr1 2-3 Yrs 4-5 Yrs Over 5 Yrs Line-of-credit $40 $40 Note payable-affiliate $565 $565 Mortgages payable $31,191 $412 $937 $1,097 $28,745 Total $31,796 $1,017 $937 $1,097 $28,745
The future payments listed above for long-term debt repayments exclude interest payments.
Overall, the four Properties had a combined average occupancy of 78% for the year ended December 31, 2004; as compared to 88% the year ended December 31, 2003; and 91% the year ended December 31, 2002. The average collected monthly rent for the year ended December 31, 2004 (not a weighted average) was approximately $479 per home-site as compared to $468 for the year ended December 31, 2003 and $455 for the year ended December 31, 2002.
TotalSites Occupied Sites Occupancy Rate Average Rent 2004 2003 2002 2004 2003 2002 2004 2003 2002 Aztec Estates 645 482 498 552 75% 78% 86% $517 $505 $493 Kings Manor 314 295 303 305 94 97 97 514 495 479 Old Dutch Farms 293 201 252 254 69 86 87 450 448 440 Park 4 Seasons 572 455 525 555 80 92 97 434 423 405 Overall 1,824 1,433 1,578 1,666 78% 88% 91% $479 $468 $455
The following table summarizes gross revenues and net operating income for the Partnership and Properties during 2004, 2003 and 2002
GROSS REVENUE NET OPERATING INCOME
AND NET INCOME2004 2003 2002 2004 2003 2002 Aztec Estates $4,431,458 $3,922,469 $4,220,557 $1,419,806 $1,419,806 $1,576,265 Kings Manor 2,188,251 2,265,236 2,208,754 1,081,113 1,167,936 1,136,743 Old Dutch Farms 1,229,045 1,431,640 1,541,086 502,302 750,094 764,565 Park of the Four Seasons 2,573,639 3,086,083 2,810,588 1,428,857 1,608,843 1,692,116 10,422,393 $10,705,428 $10,780,985 4,471,353 $4,946,679 $5,169,689 Partnership Management $8,333 $7,766 $16,723 (293,844) (250,785) (220,418)   Other
Non-Recurring
Expenses(488,124) (294,459) (345,639) Debt Service (2,715,486) (2,738,379) (2,768,270) Depreciation and Amortization (867,610) (854,893) (831,646) TOTAL: 10,430,726 $10,713,194 $10,797,708 106,289 $808,163 $1,003,716 Net Operating Income ("NOI") is a non-GAPP financial measure equal to net income, the most comparable GAAP financial measure, plus depreciation, interest expense, partnership management expense, and other expenses. Te 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 Year Ended December 31, 2004 to Year Ended December 31, 2003
Total revenues decreased $282,468 or less than 3%, to $10,430,726 in 2004, compared to $10,713,194 in 2003. The decrease was primarily the result of lower occupancy levels for the year ended December 31, 2004. Rental revenues decreased $246,085 for the year ended December 31, 2004.The Partnership's operating expenses increased $419,406, from $9,905,031 in 2003, to $10,324,437 in 2004. The increase was primarily the result of higher home sale expense, higher administrative expense and higher property operation costs.As a result of the foregoing factors, net income decreased $701,874 from $808,163 in 2003 to $106,289 in 2004.
Comparison of Year Ended December 31, 2003 to Year Ended December 31, 2002
Total revenues decreased $84,514 or less than 1%, to $10,713,194 in 2003, compared to $10,797,708 in 2002. The decrease was primarily the result of lower occupancy levels for the year ended December 31, 2003. Rental Revenue decreased $305,748 for the year ended December 31, 2003. Home Sale Income increased by $199,292 due to aggressive sales and marketing campaigns.The Partnership's operating expenses increased $111,039, from $9,793,992 in 2002, to $9,905,031 in 2003 due to higher home sale expense corresponding with increased home sales. Home sales expense increased due to higher sales volumes.As a result of the foregoing factors, net income decreased $195,553 from $1,003,716 in 2002 to $808,163 in 2003.IMPORTANT DISCLOSURES
The General Partner believes it is important to disclose certain recent events to the Limited Partners along with a description of the actions taken by the General Partner to respond to the events.
During 2004, industry conditions remained depressed due to the lack of available retail financing as well as the unemployment rate. Declining retail home sales for manufactured homes and high default rates on chattel mortgage loans for manufactured homes continued through 2004. The increase in foreclosures has created a surplus of pre-owned homes for sale in the market place. The availability of pre-owned home inventory contributed to the reduced number of new homes purchased for the industry as a whole. The Partnership has aggressively pursued home sales by increasing marketing efforts, including but not limited to the addition of sales personnel.
The surplus of pre-owned homes available in the market has presented an opportunity for the Partnership to purchase homes at low prices. On a limited basis, these homes have been purchased by the Partnership and reviewed on a case by case basis for retail sale. The maximum term of the retail contracts provided by the Partnership is ten years, significantly less than is generally available from retail lenders. This shorter amortization period allows for a faster return of principal and reduces the risk of loss through repossession. The total amount of retail loans made by the Partnership and outstanding at this time is not material relative to the total assets and revenues of the Partnership. The General Partner believes its retail sales and financing activity will help to increase occupancy and thereby rental income. To date, the delinquency and default rates of the retail loans are not significant. However the General Partner will continue to monitor the portfolio and adjust its underwriting criteria accordingly.
ITEM 7A. 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 December 31, 2004 the Partnership had a note payable outstanding in the amount of $31,190,519. Interest on this note is at a fixed annual rate of 8.24% through June 2007.
Line-of-Credit: At December 31, 2004 the Partnership owed $40,000 pursuant to its line-of-credit agreement, whereby interest is accrued at a variable rate of 1.80% in excess of LIBOR. As of December 31, 2004 the one month LIBOR was 2.42%.
Line-of -Credit: At December 31, 2004 the Partnership holds a line of credit with Nation City Bank of the Midwest for $750,000. Interest on this note is accrued a variable rate of 1.80% in excess of One Month LIBOR. This line of credit was established for the cost of the sewer connection at Old Dutch Farms. Currently there is no outstanding balance.
Line-of- Credit for Homes: At December 31, 2004 the partnership had a note payable out standing to an affiliated entity in the amount of $565,190, whereby interest is accrued at prime minus .5% (4.75 at December 31, 2004).
A 10% adverse change in interest rates on the portion of the Partnership's debt bearing interest at variable rates would result in an increase in interest expense of less than $10,000.
The Partnership does not enter into financial instruments transactions for trading or other speculative purposes or to manage its interest rate exposure.
The following Partnership's financial statements for the fiscal years ended December 31, 2004, 2003 and 2002, and supplementary data are filed with this Report:
(i) Report of Independent Registered Public Accounting Firm
(ii) Balance Sheets as of December 31, 2004 and 2003 and Statements of Income for the fiscal years ended December 31, 2004, 2003 and 2002
(iii) Statements of Partners' Equity for the fiscal years ended December 31, 2004, 2003 and 2002
(iv) Statements of Cash Flows for the fiscal years ended December 31, 2004, 2003 and 2002
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
There has been no change in the Partnership's independent registered public accounting firm nor have there been any disagreements during the Partnership's two most recent fiscal years.
ITEM 9A. CONTROLS AND PROCEDURES
The Partnership maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Partnership's Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to the Partnership's management, including its Principal Executive Officer and Principal Financial Officer, as appropriate to allow timely decisions regarding required disclosure based closely on the definition of "disclosure controls and procedures" in Rule 13a - 14(c). In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. As of the end of the period covered by this report (the-evaluation date) the Partnership conducted an evaluation under the supervision and with the participation of its Principal Executive Officer and Principal Financial Officer, of the effectiveness of the design and operation of its disclosure controls and procedures (as defined in Rule 13a - 14(c) under the Securities Exchange Act of 1934 ("the Exchange Act")). Based on this evaluation, the Principal Executive Officer and Principal Financial Officer concluded that, as of the evaluation date, the Partnership's disclosure controls and procedures were effective to reasonably ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms.
There was no significant change in the Partnership's internal control over financial reporting during its most recently completed fiscal year that has materially affected, or is reasonably likely to materially affect, its internal control over financial reporting.
The Partnership, as an entity, does not have any officers or directors. The General Partner of the Partnership is P.I. Associates Limited Partnership. P.I. Associates is a Michigan limited partnership. From November 1985 until March 19, 1997, Paul M. Zlotoff served as the sole general partner of P.I. Associates. In order to address concerns raised by the lender in connection with the Financing, on March 19, 1997, GP P.I. Associates Corp. was admitted as a corporate General Partner of the P.I. Associates. GP P.I. Associates Corp. is wholly owned by Paul M. Zlotoff. Under the amended Partnership Agreement of P.I. Associates, all actions taken by P.I. Associates must be approved by both General Partners.
Information concerning Mr. Zlotoff's age and principal occupations during the last five years or more is as follows:
Paul M. Zlotoff, 55, became the Chairman of Uniprop, Inc. in May 1986 and was its President from 1979 through 1997. He is currently Director/Chairman of Uniprop, Inc. which is the General Partner of Genesis Associates Limited Partnership Uniprop Manufactured Housing Communities Income Fund II, a public limited partnership, which owns and operates nine manufactured housing communities. Mr. Zlotoff currently, and in the past, has acted as the General Partner for various other limited partnerships owning manufactured home communities, as well as some commercial properties.
The following individuals are the directors and officers of P.I. Associates Corp.:The following individuals are the directors and officers of GP P.I. Associates Corp.:
Name and Age Position Held Paul M. Zlotoff, 55 Director and President Joel Schwartz, 43 Secretary/Treasurer Robert Sher, 54 Director Charles Soberman, 56 Director/Vice President Roger Zlotoff, 44 Vice President
Charles Soberman, 56, joined Uniprop, Inc. in June 1999 as its Chief Executive Officer and Executive Vice President. Mr. Soberman's responsibilities include supervision of property operations and corporate oversight. Mr. Soberman has a law degree from The Harvard Law School and an M.B.A. from Michigan State University. Mr. Soberman also has a B.A. from the University of Michigan. From 1979 through 1996, he was President of Mercury Paint Company, a manufacturer and retailer of coatings and allied products. From 1996 to 1999 Mr. Soberman was a Senior Lecturer at Wayne State University School of Business Administration.Joel Schwartz CPA, 43, became Chief Financial Officer of Uniprop Inc. on June 1, 2004. Mr. Schwartz is responsible for all financial affairs including accounting operations, banking relationships, raising mortgage capital, asset management and investor relations. From 1998 to 2004, Mr. Schwartz was Chief Financial Officer for Village Green Companies. From 1990 to 1998, Mr. Schwartz was Project Manager for Ford Motor Land Services Corporation. Mr. Schwartz was also an Associate at Plante & Moran CPA's from 1983 to1989. Mr. Schwartz received his B.A. from Michigan State University in 1983 with a major in accounting and received an MBA from the University of Michigan in 1990.Roger Zlotoff, 44 became Chief Investment Officer of Uniprop, Inc. on October 18, 1999. He became Vice President of Uniprop, Inc. in 2004. Mr. Zlotoff is primarily responsible for raising equity capital, managing partnership investments, evaluating acquisitions of existing properties and leading the development process for new properties. From 1997 to 1999, Mr. Zlotoff served as Director of Business Development for Vistana, Inc. in Orlando, FL. Previously, Mr. Zlotoff was Managing Director for Sterling Finance International from 1994 to 1997 and was a corporate banker, with First Union National Bank from 1988 to 1994. Mr. Zlotoff received his B.A. from the University of Central Florida as a philosophy major, and received his Master Degree in International Business from the University of South Carolina.
Paul M. Zlotoff and Roger Zlotoff are brothers.
Under the Articles of Incorporation of GP P.I. Associates Corp., until such time as the notes payable to the lender in connection with the Financing have been discharged and the liens have been released from the Properties, certain major corporate actions may be taken only with the unanimous vote of the directors of GP P.I. Associates Corp. These actions include:
a) Filing or consenting to the filing of any bankruptcy, insolvency or reorganization case or proceeding, instituting any proceedings under any applicable insolvency law or otherwise seeking relief under any laws relating to the relief from debts or the protection of debtors generally;
b) Seeking or consenting to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for GP P.I. Associates Corp., P.I. Associates, or the Partnership or a substantial portion of any of their properties;
c) Making any assignment for the benefit of the creditors of GP P.I. Associates Corp., P.I. Associates, or the Partnership; or
d) Taking any action in furtherance of the foregoing subparagraphs (a) through (c).
CODE OF ETHICS
Because the Partnership has no executive officers, the Partnership has not adopted a Code of Ethics for the Partnership. A code of ethics has been established for Directors, Officers, and Employees of Uniprop AM, LLC. A copy of the Code of Ethics is available at no charge upon request.
The Partnership has no executive officers and therefore, no officers received a salary or remuneration exceeding $100,000 during the last fiscal year. The General Partner of the Partnership and an affiliate, Uniprop AM, LLC, received certain compensation and fees during the fiscal year in the amounts described in Item 13. The Partnership anticipates that it will provide similar compensation to the General Partner and Uniprop AM, LLC during the next fiscal year.ITEM 12.SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The Partnership is a limited partnership formed pursuant to the Michigan Uniform Limited Partnership Act, as amended. The General Partner, P.I. Associates Limited Partnership, is vested with full authority as to the general management and supervision of the business and other affairs of the Partnership, subject to certain constraints in the partnership agreement and consulting agreement. Limited Partners have no right to participate in the management of the Partnership and have limited voting privileges only on certain matters of fundamental significance. To the Partnership's knowledge, no person owns of record or beneficially, more than five percent of the Partnership's Units.
The following discussion describes all of the types of compensation, fees or other distributions paid by the Partnership or others to the General Partner or its affiliates from the operations of the Partnership during the last fiscal year, as well as certain of such items which may be payable during the next fiscal year. Certain of the following arrangements for compensation and fees were not determined by arm's length negotiations between the General Partner, its affiliates and the Partnership.
Paul M. Zlotoff has an interest in the successors to the sellers of all the Properties acquired by the Partnership and may be entitled to share in a Contingent Purchase Price with respect to each Property, when and if the successors to the sellers become entitled thereto. Each of the sellers has been dissolved and liquidated and their interests in the Contingent Purchase Price have been assigned to certain partners of the General Partner. The Contingent Purchase Price for each Property was determined by reference to the average of two independent real estate appraisals that were obtained by the General Partner. Such appraisals are only estimates of value and are not necessarily indicative of the actual real estate value. Each seller becomes entitled to any unpaid Contingent Purchase Price upon the sale, financing or other disposition of one or more Properties, but, only after the receipt by each Limited Partner of any shortfall in his 9% cumulative preferred return plus the return of his adjusted capital contribution. Because the Financing resulted in a complete return of the Limited Partners' capital contributions, and because the Limited Partners have received their cumulative preferred return in full, the successors to the sellers did receive $1,500,000 in partial payment of the Contingent Purchase Price on or about May 15, 1997. The maximum amounts which could be payable to the successors to the sellers are as follows: Aztec Estates, $1,374,323; Kings Manor, $529,724; Old Dutch Farms, $452,359; and Park of the Four Seasons, $1,113,594. The partial payment made for each property was as follows: Aztec Estates, $594,088; Kings Manor, $228,987; Old Dutch Farms, $195,544; and Park of the 4 Seasons, $481,381. The maximum amounts remaining which could be payable to the successors of the sellers are as follows: Aztec Estates, $780,235; Kings Manor, $300,737; Old Dutch Farms, $256,815; and Park of the Four Seasons, $632,213. The actual amounts to be received, if any, will depend upon the results of the Partnership's operations and the amounts received upon the sale, financing or other disposition of the Properties and are not determinable at this time.
The Partnership paid and will continue to pay an Incentive Management Interest to the General Partner for managing the Partnership's affairs, including: determining distributions, negotiating agreements, selling or financing properties, preparing records and reports, and performing other ongoing Partnership responsibilities. As a result of the Financing and full return of the $30,000,000 original capital contributions of the Limited Partners, no further Preferred Return or Cumulative Return will apply, and the payment of the Incentive Management Interest will not be contingent on the satisfaction of those returns. The Incentive Management Interest is discretionary and is based on 20% of the net cash from operations (cash revenues less cash operating expenses and specified reserves) in any taxable year. For the year ended December 31, 2004, the General Partner had received a distribution of $90,000. The actual amount to be received in future years will depend upon the results of the Partnership's operations and is not determinable at this time. Because the Limited Partners have received the return of their adjusted capital contributions, the General Partner also has a right to receive 20% of any sale or financing proceeds.
The General Partner is also entitled to a quarterly Partnership Management Distribution equal to one-fourth of 1% of the most recent appraised value of the Properties of the Partnership. The Partnership Management Distribution for each quarter is paid in arrears, 45 days after the end of each fiscal quarter. The Partnership Management Distribution was proposed by the General Partner and approved by the Limited Partners to compensate, in part, for the substantial reduction in the amounts expected to be paid to the General Partner pursuant to the Incentive Management Interest following the Financing. Based on the Properties' March 2004 aggregate appraised value of $63,400,000, the Partnership Management Distribution due to the General Partner was $634,000. The Partnership Management Distribution paid to the General Partner during 2004 was $626,375, a portion of which was calculated on the 2003 aggregate appraised value of $60,350,000. As of December 31, 2004, the Partnership Management Distribution due the General Partner totaled $158,500. This amount was paid to the General Partner on February 15, 2005 from cash reserves. Based on the Properties' March 2005 aggregate appraised value of $64,600,000, the Partnership Management Distribution due the General Partner for the Partnership's 2005 fiscal year will be $646,000 (64,600,000 x 1.0% = $646,000).
Uniprop AM, LLC, an affiliate of the General Partner, received and will receive property management fees for each Property managed by it. Uniprop AM, LLC is primarily responsible for the day?to?day management of the Properties and for the payment of the costs of operating each Property out of the rental income collected. The property management fees are equal to the lesser of 5% of the annual gross receipts from the Properties managed by Uniprop AM, LLC, or the amount which would be payable to an unaffiliated third party for comparable services. During the last fiscal year, Uniprop AM, LLC received property management fees totaling $421,356. In addition, certain employees of the Partnership are also employees of affiliates of the General Partner. During the last fiscal year, these employees received an aggregate of $116,323 for performing partnership management, data processing and investor relations' services for the Partnership. The actual amounts to be received during the next fiscal year will depend upon the results of the Partnership's operations and are not determinable at this time. Uniprop Inc. had been the Partnership's management entity until it was replaced by Uniprop AM, LLC in 2003. Uniprop Homes, Inc., an affiliate of the General Partner, received commissions totaling $96,611 for certain services provided as a broker/dealer of manufactured homes for the communities. Uniprop Homes represented the communities in the sale of new and pre-owned homes to community residents.
The Partnership retained BDO Seidman, LLP to audit its financial statements for the year ended December 31, 2004. The Partnership also retained BDO Seidman LLP to provide other services in 2004.
The Aggregate fees billed to the Partnership for professional services performed by BDO Seidman, LLP were as follows.
2004 2003 (1) Audit Fees $22,200 $19,000 (2) Audit-Related Fees $0 $0 (3) Tax Fees $12,500 $12,100 (4) All Other Fees $0 $0 (5) Total $34,700 $31,100Audit fees: pertain to the audit of the Partnerships annual financial statements, including reviews of the interim financial statements contained in the Partnerships Quarterly Reports of Form 10-Q.Tax fees: pertain to services performed for tax compliance, tax planning and tax advice, including preparation of tax returns and partners Schedule K-1 processing. The services performed by BDO Seidman in 2004 were pre-approved by the General Partner.
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) Financial Statements (1) The following financial statements and related documents are filed with this Report: (i) Report of Independent Certified Public Accountants (ii) Balance Sheets as of December 31, 2004 and 2003 and Statements of Income for the fiscal years ended December 31, 2004, 2003 and 2002 (iii) Statements of Partners' Equity for the fiscal years ended December 31, 2004, 2003 and 2002 (iv) Statements of Cash Flows for the fiscal years ended December 31, 2004, 2003 and 2002 (2) The following financial statement schedule is filed with this report:
Schedule III - Real Estate and Accumulated Depreciation for the fiscal years ended December 31, 2004, 2003 and 2002(3) Exhibits The following exhibits are incorporated by reference to the S-11 Registration Statement of the Partnership filed June 4, 1985, as amended on August 1, 1985 and September 11, 1985: 3 (a) Amended Certificate of Limited Partnership for the Partnership 3 (b) Agreement of Limited Partnership for the Partnership 10 (a) Form of Management Agreement between the Partnership and Uniprop, Inc. The following exhibits are incorporated by reference to the Form 10-K for fiscal year ended December 31, 1997: 3 (c) Certificate of Amendment to the Certificate of Limited Partnership for the Partnership (originally filed with Form 10-Q for the fiscal quarter ended June 30, 1986). 4 Form of Certificate of Limited Partnership Interest in the Partnership (Originally filed with Form 10-K for the fiscal year ended December 31, 1986) 10 (c) Contingent Purchase Price Agreement between the Partnership, Aztec Estates (Originally filed with Form 10-K for the fiscal year ended December 31, 1987) 10 (d) Contingent Purchase Price Agreement between the Partnership and O.D.F. Mobile Home Park (Originally filed with Form 10-K for the fiscal year ended December 31, 1987) 10 (e) Contingent Purchase Price Agreement between the Partnership and The Park of the Four Seasons (Originally filed with Form 10-K for the fiscal year ended December 31, 1987) The following exhibits are attached to this Report: 10 (f) First Amended and Restated Consulting Agreement among the Partnership, the General Partner and the Consultant. 28 Letter summary of the estimated fair market values of the Partnership's four Manufactured housing communities, as of March 1, 2005. (b) Reports on Form 8-K
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, Uniprop Manufactured Housing Communities Income Fund, a Michigan Limited Partnership, has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Uniprop Manufactured Housing Communities
Income Fund, a Michigan Limited PartnershipBY: P.I. Associates Limited Partnership,
General PartnerBY: GP P.I. Associates Corp., General Partner Dated: March 18, 2005 BY: /s/ Paul M. Zlotoff
Paul M. Zlotoff, President
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By: /s/Joel Schwartz
Joel Schwartz
(Principal Financial Officer)By: /s/ Paul M. Zlotoff
Paul M. Zlotoff
(Principal Executive Officer)
(President & Director of
GP P.I. Associates Corp.)By: /s/ Susann E. Szepytowski
Susann E. Szepytowski
(Controller)Dated: March 18, 2005
Exhibit 31.1 CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, Paul M Zlotoff, certify that: 1. I have reviewed this annual report on Form 10-K of Uniprop Manufactured Housing Income Fund; 2. Based on my knowledge, this annual 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 the annual report; 3. Based on my knowledge, the financial statements, and other financial information included in this annual 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 annual report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have: a) designed such disclosure controls and procedures 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 annual report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the "Evaluation Date"); and c) presented in this annual report our conclusions about the effectiveness of the of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The Registrant's other certifying officers and I have indicated in this annual report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: March 18, 2005 Signature: /s/ Paul M. Zlotoff Paul M. Zlotoff, Principal Executive Officer President & Director of GP P.I. Associates Corp.
Exhibit 31.2 CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, Joel Schwartz, certify that: 1. I have reviewed this annual report on Form 10-K of Uniprop Manufactured Housing Income Fund; 2. Based on my knowledge, this annual 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 the annual report; 3. Based on my knowledge, the financial statements, and other financial information included in this annual 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 annual report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have: a. designed such disclosure controls and procedures 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 annual report is being prepared; b. evaluated the effectiveness of the registrant's disclosure controls and procedures as of the end of the period covered by this annual report (the "Evaluation Date");and c. presented in this annual report our conclusions about the effectiveness of the of the disclosure controls and procedures based on our evaluation as the Evaluation Date. 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function): a. all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b. any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The Registrant's other certifying officers and I have indicated in this annual report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: March 18, 2005 Signature: /s/ Joel Schwartz Joel Schwartz, Principal Financial Officer Chief Financial Officer of Uniprop AM, LLC
Exhibit 32.1
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES OXLET ACT OF 2002 In connection with the Annual Report of Uniprop Manufactured Housing Communities Income Fund (the "Company") on Form 10-K for the year ending December 31, 2004 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I Paul M. Zlotoff, Principal Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 that: 1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Act of 1934; and 2. The information contained in the Report fairly presents, in all material respect, the financial condition and results of operations of the Company. /s/ Paul M. Zlotoff Principal Executive Officer, General Partner of P.I. Associates Limited Partnership President & Director of GP P.I. Associates Corp. March 18, 2005
Exhibit 32.2
CERTIFICATION 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 Annual Report of Uniprop Manufactured Housing Communities Income Fund (the "Company") on Form 10-K for the year ending December 31, 2004 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I Gloria A. Koster, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 that: 3. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Act of 1934; and 4. The information contained in the Report fairly presents, in all material respect, the financial condition and results of operations of the Company. /s/ Joel Schwartz Principal Financial Officer, Chief Financial Officer of Uniprop AM, LLC March 18, 2005
EXHIBIT
NUMBERDESCRIPTION METHOD OF FILING PAGE 3(a) Amended Certificate ofLimited Partnership for thePartnership Incorporated by reference tothe S-11 RegistrationStatement of the Partnershipfiled June 4, 1985, asamended on August 1, 1985and September 11, 1985("Registration Statement"). 3(b) Agreement of LimitedPartnership for thePartnership Incorporated by reference toThe Registration Statement. 3(c) Certificate of Amendment tothe Certificate of LimitedPartnership for thePartnership (originally filedwith Form 10-Q for the fiscalQuarter ended June 30, 1986). Incorporated by reference toForm 10-K for fiscal yearended December 31, 1992. 3(d) First Amendment to Agreementof Limited Partnership Incorporated by reference toForm 10-K for the fiscal yearended December 31, 1996. 3(e) Second Amendment to Agreement of Limited Partnership Incorporated by reference toForm 10-K for the fiscal yearended December 31, 1996. 4 Form of Certificate of Limited Partnership Interest in the Partnership (originally filed with Form 10-K for the fiscal year ended December 31, 1986). Incorporated by reference to Form 10-K for fiscal year ended December 1997. 10(a) Form of ManagementAgreement between the Partnership and Uniprop, Inc. Incorporated by reference toThe Registration Statement. 10(b) Form of ConsultingAgreement between thePartnership, the GeneralPartner and Consultant Incorporated by reference toThe Registration Statement. 10(c) Contingent Purchase PriceAgreement between thePartnership, Aztec Estates,Ltd., and Kings ManorAssociates (originally filedwith Form 10-K for the fiscalyear ended December 31, 1987) Incorporated by reference to Form 10-K for fiscal year ended December 1997. 10(d) Contingent Purchase PriceAgreement between thePartnership and O.D.F. Mobile Home Park (originally filed with Form 10-K for the fiscal year ended December 31, 1987 Incorporated by reference to Form 10-K for fiscal year ended December 1997. 10(e) Contingent Purchase PriceAgreement between thePartnership and The Park ofthe Four Seasons (originallyfiled with Form 10-K for thefiscal year ended December31, 1987) Incorporated by reference to Form 10-K for fiscal year ended December 1997. 10(f) Refinancing loan Agreement between the Partnership and Nomura Asset Capital Corporation March 24, 1997 Filed herewith. 10(g) Line of Credit Loan Agreement between the Partnership and National City Bank of Michigan/Illinois August 24, 1994 Filed herewith. 31.1 Certificate of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 Filed herewith. 31.2 Certificate of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 Filed herewith. *32.1 Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 Filed herewith. *32.2 Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 Filed herewith.
* This certificate is being furnished solely to accompany the report pursuant to 18 U.S.C. 1350 and is not being filed for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and is not to be incorporated by reference into any filing of the Partnership, whether made before or after the date hereof, regardless of any general incorporation language in such filing.
EXHIBIT 28
UNIPROP MANUFACTURED HOUSING COMMUNITIES INCOME FUND
2005 PROPERTY APPRAISALS
Cushman & Wakefield recently completed market value appraisals of UMHCIF's four properties as of March 2005. The table below sets forth certain appraisal information for each property, as well as relevant comparisons:
March 05 March 04 Variance Property Appraisals Appraisals in % Aztec Estates, FL $22,400,000 $20,500,000 9.3% Kings Manor, FL 15,850,000 13,200,000 20.1% Old Dutch Farms, MI 7,250,000 9,750,000 (25.6) Park of Four Seasons, MN 19,100,000 19,900,000 (4.0%) GRAND TOTAL: $64,600,000 $63,350,000 2.0%2005 ESTIMATED NET ASSET VALUE OF UNITS
Based on the March 2005 appraisal of the Partnership's properties, the General Partner has calculated the estimated net asset value of each unit, based on the following assumptions:
- Sale of the Properties in March 2005 for their appraised value.
- Costs and selling expenses are 3.0% of the sale price.
- Amount payable to creditors other than the mortgage debt, is negligible.
- Tax consequences of a sale are not taken into consideration.
Calculations:
March 2005 appraised value of the properties: $64,600,000 Minus: Costs and selling expenses (3.0%): 1,938,000 Mortgage Debt: 31,190,519 Sellers' Contingent Purchase Price: 1,970,000 * Net Sale Proceeds: $29,501,481 Limited Partners' Share of Net Sales Proceeds (80.0%) $23,601,185 Number of Units: 30,000 Estimated Current Net Asset Value per Unit: $786.71
* Reflects the $1,500,000 partial payment of Contingent Purchase Price which was paid on May 15, 1997 out of operating cash reserves.