UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

x

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

 

For the Quarter Ended March 31, 2015

 

¨

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

 

Commission File No. 0-16701

UNIPROP MANUFACTURED HOUSING COMMUNITIES INCOME FUND II,

a Michigan Limited Partnership

(Exact name of registrant as specified in its charter)

MICHIGAN (State or other jurisdiction of incorporation or organization)

38-2702802 (I.R.S. employer identification number)

 

 

280 Daines Street, Birmingham, Michigan 48009

(Address of principal executive offices) (Zip Code)

 

(248) 645-9220

(Registrant's telephone number, including area code)

 

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

units of beneficial assignments of limited partnership interest

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

 

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

 

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

 

Large Accelerated filer    ¨

Accelerated filer     ¨

Non-accelerated filer     ¨

Smaller reporting company    x

 

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Securities Exchange Act of 1934). Yes ¨     No x

 

As of March 31, 2015, the number of units of limited partnership interest of the registrant outstanding was 3,303,387. The Partnership units of interest are not traded in any public market.

 

 

 

UNIPROP MANUFACTURED HOUSING COMMUNITIES INCOME FUND II,

A MICHIGAN LIMITED PARTNERSHIP

 

INDEX

 

		Page
PART I	FINANCIAL INFORMATION
ITEM 1.	FINANCIAL STATEMENTS
	Balance Sheets March 31, 2015 (Unaudited) and December 31, 2014	3
	Statements of Operations Three months ended March 31, 2015 and 2014 (Unaudited)	4
	Statement of Partners’ Equity Three months ended March 31, 2015 (Unaudited)	4
	Statements of Cash Flows Three months ended March 31, 2015 and 2014 (Unaudited)	5
	Notes to Financial Statements March 31, 2015 (Unaudited)	6
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	8
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	11
ITEM 4.	CONTROLS AND PROCEDURES	11
PART II	OTHER INFORMATION	12
ITEM 1.	LEGAL PROCEEDINGS	12
ITEM 1A.	RISK FACTORS	13
ITEM 6.	EXHIBITS	13

 

 

 

 

 

UNIPROP MANUFACTURED HOUSING COMMUNITIES INCOME FUND II,

A MICHIGAN LIMITED PARTNERSHIP

 

BALANCE SHEETS 

 

ASSETS		March 31,2015				December 31, 2014
		(Unaudited)
Properties:
Land		$	7,432,973			$	7,432,973
Buildings And Improvements			36,346,977				36,327,829
Furniture And Equipment			656,511				656,511
Manufactured Homes and Improvements			5,291,331				5,043,383
			49,727,792				49,460,696
Less Accumulated Depreciation			(32,261,094	)			(31,894,057	)
			17,466,698				17,566,639
Cash And Cash Equivalents			7,241,326				7,326,491
Unamortized Finance Costs			905,791				927,256
Deferred Home Relocation Costs			261,545				330,595
Other Assets			1,113,524				928,350
Asset Held for Sale			2,624,021				2,596,859
Total Assets		$	29,612,905			$	29,676,190

 

LIABILITIES & PARTNERS' EQUITY		March 31,2015				December 31, 2014
		(Unaudited)
Accounts Payable		$	83,727			$	36,457
Other Liabilities			655,431				511,757
Notes Payable			24,445,358				24,595,065
Liabilities of Asset Held for Sale			3,537,497				3,539,074
Total Liabilities			28,722,013				28,682,353
Partners’ Equity:
General Partner			419,593				417,980
Unit Holders			471,299				575,857
Total Partners' Equity			890,892				993,837
Total Liabilities And
Partners’ Equity		$	29,612,905			$	29,676,190

 

See Notes to Financial Statements

 

 

 

UNIPROP MANUFACTURED HOUSING COMMUNITIES INCOME FUND II,

 A MICHIGAN LIMITED PARTNERSHIP

 

STATEMENTS OF OPERATIONS

 

		THREE MONTHS ENDED
		March 31, 2015				March 31, 2014
		(unaudited)				(unaudited)
Income:
Rental Income		$	1,606,618			$	1,568,651
Home Sale Income			19,796				139,404
Other			286,841				210,062
Total Income		$	1,913,255			$	1,918,117
Operating Expenses:
Administrative Expenses (Including $110,685 and $103,990, in Property Management Fees Paid to an Affiliate for the Three Month Period Ended March 31, 2015 and 2014 Respectively)			644,308				604,676
Property Taxes			156,104				176,922
Utilities			130,861				121,400
Property Operations			184,184				177,329
Depreciation			367,037				360,290
Interest			332,164				339,410
Home Sale Expense			14,265				105,670
Total Operating Expenses		$	1,828,923			$	1,885,697
Income from Continuing Operations		$	84,332			$	32,420
Income (Loss) from Discontinued Operations		$	76,994				($17,476	)
Net Income		$	161,326			$	14,944
Income Per Unit:
Continuing Operations			0.03				0.01
Discontinued Operations			0.02				(0.01	)
Total Income Per Unit			0.05				0.00
Distribution Per Unit:			0.08				0.08
Weighted Average Number Of Units Of Beneficial Assignment Of Limited Partnership Interest Outstanding During The Period Ending  March  31, 2015 and 2014			3,303,387				3,303,387

 

STATEMENT OF PARTNERS' EQUITY (Unaudited)

 

		General Partner				Unit Holders				Total
Balance, December 31, 2014		$	417,980			$	575,857			$	993,837
Distributions							(264,271	)			(264,271	)
Net Income			1,613				159,713			$	161,326
Balance as of March 31, 2015		$	419,593			$	471,299			$	890,892

 

See Notes to Financial Statements

 

 

 

UNIPROP MANUFACTURED HOUSING COMMUNITIES INCOME FUND II,

A MICHIGAN LIMITED PARTNERSHIP

  

STATEMENTS OF CASH FLOWS

(Unaudited)

 

		THREE MONTHS ENDED
		March 31,2015				March 31,2014
Cash Flows From Operating Activities:
Net Income		$	161,326			$	14,944
Adjustments To Reconcile Net Income
To Net Cash Provided By
Operating Activities:
Depreciation			367,037				414,987
Amortization of Financing Costs			21,464				21,464
Amortization of Home Relocation Costs			69,050				69,036
Payment of Home Relocation Costs			0				(1,500	)
Gain on Sale of Manufactured Homes			5,533				29,685
Increase In Other Assets			(190,228	)			(316,124	)
Increase In Accounts Payable			71,944				36,616
Increase In Other Liabilities			145,024				122,562
Total Adjustments			489,824				376,726
Net Cash Provided By (Used In) Operating Activities			651,150				391,670
Cash Flows Used In Investing Activities:
Investment in Manufactured Homes and Improvements			(273,279	)			(248,609	)
Purchase of Property and Equipment			(19,147	)			(8,512	)
Proceeds from Sale of Manufactured Homes			19,798				139,455
Net Cash Used In Investing Activities			(272,628	)			(117,666	)
Cash Flows Used In Financing Activities:
Distributions To Unit Holders			(264,271	)			(264,271	)
Payments On Notes Payable			(177,308	)			(168,749	)
Net Cash Used In Financing Activities			(441,579	)			(433,020	)
Decrease In Cash			(63,057	)			(159,016	)
Cash, Beginning			7,317,400				8,584,140
Cash, Ending		$	7,254,343			$	8,425,124

 

See Notes to Financial Statements

 

 

 

 

UNIPROP MANUFACTURED HOUSING COMMUNITIES INCOME FUND II,

A MICHIGAN LIMITED PARTNERSHIP

 

 

NOTES TO FINANCIAL STATEMENTS

March 31, 2015 (Unaudited)

 

1.

Basis of Presentation and Accounting Policies:

 

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

 

During the fourth quarter of 2012, Management initiated the Sunshine Village Paid Home Relocation Program (“Program”). The Program was offered exclusively to residents of Seminole Estates, a 704 site, 55 and over manufactured home community in Hollywood, Florida that announced its closure. The Program expired in the first quarter of 2013. By the end of the first quarter of 2014, all 41 residents have successfully relocated. The Partnership has incurred expenditures of $903,232, of which $816,203 has been capitalized and is being amortized as a reduction of rental revenue over the life of the residents’ three year rental period. The Program is completed and Management estimates no additional relocation costs will be incurred. At March 31, 2015, $261,545 remains unamortized.

 

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

 

We have evaluated subsequent events through the date of this filing. We do not believe there are any material subsequent events which would require further disclosure.

 

2.

Mortgage Payable:

 

The Partnership has two mortgage notes payable with Cantor Commercial Real Estate collateralized by Sunshine Village, located in Davie, Florida and West Valley, located in Las Vegas, Nevada. The mortgages are payable in monthly installments of interest and principal through August, 2023. These refinanced notes bear interest at a fixed rate of 5.09% with principal payments based on a twenty-five year amortization period. As of March 31, 2015 the balance on these notes was $18,708,365.

 

The Partnership also has five mortgage notes payable with StanCorp Mortgage Investors LLC (“StanCorp”) collateralized by the five remaining properties of the Partnership. These mortgages are payable in monthly installments of interest and principal through September 2033. Effective September 1, 2013, the available interest rate re-set option was accepted on the five remaining mortgage notes with StanCorp. The new rate on these five notes is 5.00% and the amortization period is twenty years. Another rate re-set option is available in 2018. As of March 31, 2015 the balance on these five notes was $9,114,287.

 

 

Future maturities on the notes payable for the next five years and thereafter are as follows: 2015 - $532,277; 2016 - $744,498; 2017 - $785,396; 2018 - $826,361; 2019 - $869,465 and thereafter - $24,064,655.

 

3.

Asset Held for Sale:

 

A long-lived asset is required to be classified as “held for sale” in the period in which certain criteria are met. The Partnership classified real estate assets as held for sale after the following conditions have been satisfied: (1) management, having the appropriate authority, commits to a plan to sell the asset, (2) the initiation of an active program to sell the asset, and (3) the asset is available for immediate sale and it is probable that the sale of the asset will be completed within one year.

 

During March 2015, the Board of Directors and Consultant approved a sale of the El Adobe Community located in Las Vegas, Nevada. Subsequent to the period end, as described in Form 8-K dated April 8, 2015, Uniprop Manufactured Housing Communities Income Fund II (the “Fund”) has entered into a Contract for Sale and Purchase of Real and Personal Property with a potential buyer for the sale of El Adobe, with an expected closing date in June 2015. Based on the information outlined, the Partnership has concluded that the property meets the criteria as an asset held for sale on the accompanying Balance Sheets. Similarly, the El Adobe community and associated financial results are classified as “discontinued operations” on the accompanying Statements of Operations.

 

The assets and liabilities related to the El Adobe community as of March 31, 2015 are as follows:

 

Total Assets of $2,624,021 consist of Current Assets of $49,344 and Fixed Assets of $8,324,391 less Accumulated Depreciation of $5,749,714. Total Liabilities of $3,537,497 consist of Current Liabilities of $160,203 and Long Term Liabilities of $3,377,294. The assets and liabilities related to the El Adobe community as of December 31, 2014 are as follows: Total Assets of $2,596,859 consist of Current Assets of $22,182 and Fixed Assets of $8,324,391 less Accumulated Depreciation of $5,749,714. Total Liabilities of $3,539,074 consist of Current Liabilities of $134,179 and Long Term Liabilities of $3,404.895.

 

The following is a summary of results of operations of the property classified as discontinued operations for the periods ended March 31, 2015 and 2014: Total Revenue was $265,555 and Total Operating Expenses were $188,561 for the period ended March 31, 2015. For the same period in 2014, Total Revenue was $244,847 and Total Operating Expenses were $262,323.

 

Total Cash Flows provided by Operating Activities of the property classified as discontinued operations for the periods ended March 31, 2015 and 2014 were $97,964 and $13,320, respectively.  In addition, Total Cash Flows used in Investing Activities of the property classified as discontinued operations for the periods ended March 31, 2015 and 2014 were $0, and $3,200, respectively.

 

 

  

ITEM 2.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

Critical Accounting Policies

 

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

 

Liquidity and Capital Resources

 

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

 

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

 

The Partnership's capital resources consist primarily of its seven manufactured home communities. As described in Note 2, the Partnership refinanced its existing mortgage note payable and executed seven new mortgage notes payable with StanCorp Mortgage Investors, LLC (the “StanCorp Financing”) in the aggregate amount of $23,225,000 secured by the seven properties of the Partnership in August, 2008. To pay off the prior mortgage balance of $25,277,523 and the costs of refinancing, the Partnership transferred $2,735,555 from cash reserves. The mortgages were payable in monthly installments of interest and principal through September 2033. The Partnership incurred $693,798 in financing costs as a result of the 2008 refinancing which were being amortized over the term of the loans. These costs included a 1% fee payable to an affiliate of the General Partner.

 

On July 18, 2013, the Partnership refinanced two of the existing mortgage notes payable and executed two new mortgages payable in the amount of $19,320,000 secured by Sunshine Village, located in Davie, FL and West Valley, located in Las Vegas, NV with a new lender, namely Cantor Commercial Real Estate. The mortgage notes are payable in monthly installments of interest and principal through August, 2023. The refinanced notes bear interest at a fixed rate of 5.09% with principal payments based on a twenty-five year amortization period. As of March 31, 2015 the balance on these notes was $18,708,365.

 

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

 

Effective September 1, 2013, the interest rate re-set option was accepted on the five remaining notes with StanCorp. The new rate on these five notes is 5.00% and the amortization period is twenty years. Another rate re-set option is available in five years. As of March 31, 2015 the balance on these notes was $9,114,287.

 

The General Partner has decided to distribute $264,271, or $.08 per unit, to the unit holders for the first quarter ended March 31, 2015. The General Partner will continue to monitor cash flow generated by the Partnership’s properties during the coming quarters. If cash flow generated is greater or lesser than the amount needed to maintain the current distribution level, the General Partner may elect to reduce or increase the level of future distributions paid to Unit Holders.

 

As of March 31, 2015, the Partnership’s cash balance amounted to $7,254,343. The level of cash balance maintained is at the discretion of the General Partner.

 

On April 7, 2015, the Partnership entered, into a Contract for Sale and Purchase of Real and Personal Property with Casa Feliz LLC for the sale of El Adobe, one of the Fund’s communities located in Las Vegas, Nevada for a selling price of $8,000,000, following an affirmative recommendation from the Consultant and approval of the Board of Directors. There is a forty-five (45) day Due Diligence period, with a subsequent Closing Date thirty (30) days upon expiration of the Due Diligence period. According to the most recent appraisal in February 2015, the community had a market value of $5,700,000. Net cash proceeds from the sale upon closing, are estimated to be approximately $3,500,000.

 

While the Fund’s management believes that the buyer is financially capable of completing the proposed transaction and fully intends to consummate the purchase, there can be no assurance that the closing will occur.

 

Results of Operations

 

Overall, as illustrated in the following table, the Partnership's seven properties reported combined occupancy of 49% at the end of March 2015, versus 48% at the end of March 2014. The average monthly homesite rent as of March 31, 2015 was approximately $534 versus $523 from March 2014 (average rent not a weighted average).

 

Total Occupied	Occupancy Average*			Capacity Sites			Rate				Rent
Ardmor Village		339			149			44	%		$	568
Camelot Manor		335			112			33	%			433
Dutch Hills		278			107			38	%			428
El Adobe		367			168			46	%			574
Stonegate Manor		308			102			33	%			418
Sunshine Village		356			255			72	%			665
West Valley		421			291			69	%			654
Total on 3/31/15:		2,404			1,184			49	%		$	534
Total on 3/31/14:		2,404			1,182			48	%		$	523

 

*Not a weighted average

 

 

 

 

		Gross Revenue								Net Operating Income  (Loss) and Net Income
		3/31/2015				3/31/2014				3/31/2015				3/31/2014
		three months ended								three months ended
Ardmor		$	275,529			$	249,559			$	138,020			$	110,332
Camelot Manor			202,125				223,956				88,247				89,641
Dutch Hills			175,990				163,480				67,699				57,766
Stonegate			173,720				171,463				50,784				44,121
Sunshine			484,153				509,070				246,196				217,576
West Valley			596,566				596,061				394,788				426,649
			1,908,083				1,913,589				985,734				946.085
Partnership Management			5,172				4,528				(144,946	)			(149,496	)
Other Expense			-				-				(57,255	)			(64,469	)
Interest Expense			-				-				(332,164	)			(339,410	)
Depreciation			-				-				(367,037	)			(360,290	)
Continuing Operations		$	1,913,255			$	1,918,117			$	84,332			$	32,420
Discontinued Operations		$	265,555			$	244,847			$	76,994				($17,476	)
		$	2,178,810			$	2,162,964			$	161,326			$	14,944

 

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

 

Comparison of Quarter Ended March 31, 2015 to Quarter Ended March 31, 2014

 

Gross revenues from continuing operations decreased slightly by $4,862 to $1,913,255 in 2015, from $1,918,117 in 2014. This was mainly due to decreased home sale income, which was offset by increased rental and other income. Gross revenues from discontinued operations increased by $20,708 to $265,555 in 2015 from $244,847 in 2014. This was mainly due to an increase in market rent value from the prior year.

 

As described in the Statements of Operations, total operating expenses from continuing operations decreased $56,774 to $1,828,923 in 2015, as compared to $1,885,697 in 2014. This was mainly due to decreased expenses associated with home sales, and property tax expense, offset by increases in administrative, utilities and property operations expenses. Total operating expenses from discontinued operations decreased $73,762 to $188,561 in 2015, as compared to $262,323 in 2014. This was mainly due to the discontinuance of depreciation expense as an Asset Held for Sale.

 

 

As a result of the aforementioned factors, the Partnership experienced Net Income from continuing operations of $84,332 for the first quarter of 2015 compared to Net Income of $32,420 for the first quarter of 2014. Net Income from discontinued operations for the first quarter of 2015 was $76,994, compared to a Net Loss of $17,476 for the same period in 2014.

 

 

ITEM 3. 

QUANTITATIVE AND QUALITATIVE
DISCLOSURES ABOUT MARKET RISK

 

The Partnership is exposed to interest rate rise 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.

 

Notes Payable: At March 31, 2015 the Partnership had notes payable outstanding in the amount of $27,822,652. Interest on two of these notes is at a fixed annual rate of 5.09% through August 2023. Interest on the five remaining notes is at a fixed rate of 5.00% through August 2018, at which time a rate reset option is available.

 

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

 

ITEM 4.

CONTROLS AND PROCEDURES

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

 

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

 

 

 

PART II - OTHER INFORMATION

 

 

ITEM 1. LEGAL PROCEEDINGS

 

A hearing was held before Judge Stefany Miley on December 9, 2014 in the District Court of Clark County, Nevada. The Plaintiff is Uniprop Manufactured Housing Income Fund II on behalf of El Adobe, and the Defendant is the City of Las Vegas.

 

On March 6, 2015 the Court issued the following orders:

 

Court orders Defendant’s Motion for Summary Judgement GRANTED as to the dismissal of Plaintiff’s Equal Protection Claim and General Applicability Clause claim;

 

Court finds a genuine issue of material fact exists as to whether assessing a service fee on a capped sewer line with no occupant does qualify as a service fee;

 

Court orders Defendants Motion for Summary Judgment DENIED as to the dismissal of Plaintiff’s claim that the city’s sewer billing procedure conflicts with the City charter;

 

Court orders Plaintiff’s Motion for Summary Judgment DENIED as to the claim that the subject provisions of Section 14.04 of the City Code violate the Equal Protection Clause of the 14^th Amendment of the U. S. Constitution as applied to vacant sites in manufactured home communities;

 

Court orders Plaintiff’s Motion for Summary Judgment DENIED as to the claim that the subject provisions of Section 14.04 of the City Code violate the General Applicability Clause of Article 4, Section 21 of the Nevada State Constitution as applied to vacant sites in manufactured home communities.

 

Court orders the Plaintiff’s Motion for Summary Judgement DENIED as to the claim that the provisions of Section 14.04 of the City Code identified herein are invalid because they are not authorized by Section 2.290(3) of the Las Vegas city charter.

 

In summary, the Court denied three of the Plaintiff’s Motions for Summary Judgment, however, the Court found a “genuine issue of material facts exists as to whether assessing a service fee on a capped sewer line with no occupant does qualify as a service fee”, and denied the Defendant’s Motion for Summary Judgment on that issue.

 

We believe our claim still has merit and that the Court allowed us a narrow avenue to pursue a claim regarding a service fee on a vacant site for which Plaintiff has already paid a connection fee, and no service is provided. Clark County reclamation, which provides sewer treatment to West Valley, has already agreed to waive the service fee for West Valley; Clark County reclamation also provides the treatment services for the City of Las Vegas at El Adobe, but the City is the intermediary between El Adobe and Clark County Reclamation. We expect to have a trial in July or August of this year.

 

During the litigation, the City of Las Vegas has placed liens on El Adobe for unpaid sewer service fees. El Adobe has accrued those fees on its financial statements, and management has made arrangements to pay those fees in full, if necessary, in order to close on the sale of El Adobe pursuant to the Purchase and Sale Agreement with Casa Feliz, LLC. Management also made provisions in the Purchase and Sale Agreement for El Adobe to deal with the costs and potential future benefits of the litigation in the event that a sale of the community closes before the outcome of the trial is known.

 

 

ITEM 1A. RISK FACTORS

 

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

  

ITEM 6. EXHIBITS

 

Exhibit 31.1	Principal Executive Officer Certification pursuant to Rule 13a-14(a)/15d-14(a) of The Securities and Exchange Act of 1934, as amended
Exhibit 31.2	Principal Financial Officer Certification pursuant to Rule 13a-14(a)/15d-14(a) of The Securities and Exchange Act of 1934, as amended
Exhibit 32.1	Certifications pursuant to 18 U.S C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes –Oxley Act of 2002.
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema
101.CAL	XBRL Taxonomy Extension Calculation Linkbase
101.DEF	XBRL Taxonomy Extension Definition Linkbase
101.LAB	XBRL Taxonomy Extension Label Linkbase
101.PRE	XBRL Taxonomy Extension Presentation Linkbase

 

 

 

SIGNATURES

 

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

 

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

 

 

Dated: May 8, 2015