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RELATED PARTY TRANSACTIONS | 6 Months Ended
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Jun. 30, 2019
RELATED PARTY TRANSACTIONS |
RELATED PARTY TRANSACTIONS | NOTE 3. RELATED PARTY TRANSACTIONS The Partnership’s properties are managed by an entity that is owned by the majority shareholder of the General Partner. The management fee is equal to 4% of gross receipts of rental revenue and laundry income on the majority of the Partnership’s properties and 3% on Linewt. Total fees paid were approximately $1,188,000 and $1,150,000 for the six months ended June 30, 2019 and 2018, respectively. The Partnership Agreement permits the General Partner or Management Company to charge the costs of professional services (such as counsel, accountants and contractors) to NERA. During the six months ended June 30, 2019 and 2018, approximately $593,000 and $666,000, was charged to NERA for legal, accounting, construction, maintenance, brokerage fees, rental and architectural services and supervision of capital improvements. Of the 2019 expenses referred to above, approximately $210,000 consisted of repairs and maintenance, $193,000 of administrative expense and $1,000 for rental commissions. Approximately $189,000 of expenses for construction, architectural services and supervision of capital projects were capitalized in rental properties. Additionally in 2019, the Hamilton Company received approximately $563,000 from the Investment Properties of which approximately $327,000 was the management fee, approximately $121,000 for rental commissions, approximately $23,000 was for maintenance services, approximately $19,000 was for administrative services and approximately $73,000 for architectural services and supervision of capital projects. The management fee is equal to 4% of gross receipts of rental income on the majority of investment properties and 2% on Dexter Park. The Partnership reimburses the management company for the payroll and related expenses of the employees who work at the properties. Total reimbursement was approximately $1,668,000 and $1,680,000 for the six months ended June 30, 2019 and 2018, respectively. The Management Company maintains a 401K plan for all eligible employees whereby the employees may contribute the maximum allowed by law. The plan also provides for discretionary contributions by the employer. There were no employer contributions during 2018. For the six months ended June 30, 2019, the Partnership accrued $18,000 for the employer’s match portion to the plan. See Note 15. Bookkeeping and accounting functions are provided by the Management Company’s accounting staff, which consists of approximately 14 people. During the six months ended June 30, 2019 and 2018, the Management Company charged the Partnership $62,500 ($125,000 per year) for bookkeeping and accounting services included in administrative expenses above. The former President of the Management Company performed asset management consulting services and received an asset management fee from the Partnership. The Partnership did not have a written agreement with this individual. During the six months ended June 30, 2018 this individual received fees of $37,500. At June 29, 2018, the individual resigned his position. The Partnership has invested in eight limited partnerships, which have invested in mixed use residential apartment complexes. The Partnership has a 40% to 50% ownership interest in each investment property. The other investors are the Estate of Harold Brown, and five current and previous employees of the Management Company. Harold Brown’s ownership interest was between 47.6% and 59%. See Note 14 for a description of the properties and their operations.

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- Definition The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 850 -URI http://asc.fasb.org/topic&trid=2122745 + Details
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