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RECEIVABLE FROM AND PAYABLE TO RELATED PARTIES
 9 Months Ended
Sep. 30, 2021
Related Party Transactions [Abstract]  
RECEIVABLE FROM AND PAYABLE TO RELATED PARTIES

NOTE 3. RECEIVABLE FROM AND PAYABLE TO RELATED PARTIES

 

From time to time, IOR and its related parties have made unsecured advances to each other which include transactions involving the purchase, sale, and financing of property. In addition, we have a cash management agreement with our Advisor. The agreement provides for excess cash to be invested in and managed by our Advisor, Pillar, a related party.

 

The Advisory agreement provides for Pillar or a related party of Pillar to receive fees and cost reimbursements as defined in Part III, Item 10. Directors, Executive Officers and Corporate Governance – The Advisor. Cost reimbursements are allocated based on the relative market values of the Company’s assets. The Company and Pillar entered into an Advisory Agreement and Cash Management Agreement to further define the administration of the Company’s day-to-day investment operations, relationship contacts, flow of funds and deposit and borrowing of funds. The advisory fees and cost reimbursements paid to Pillar, TCI and related parties are detailed below (dollars in thousands):  

 

            
   Period Ended
September 30,
   2021  2020
Fees:      
Advisory  $599   $574 
Net income   250    249 
   $849   $823 
Other Expense:          
Cost reimbursements  $220   $190 
Revenue:          
Interest received  $3,697   $4,071 

 

As of September 30, 2021, IOR has notes and interest receivable of $11.5 million due from Unified Housing Foundation, Inc., and recognized interest income of $1.03 million related to these notes receivable. (See details in Note 2. Notes and Interest Receivable from Related Parties.)

 

The table below reflects the various transactions between IOR, Pillar, and TCI (dollars in thousands):

 

   TCI
   2021  2020
Balance, December 31,  $90,526   $86,221 
Cash transfers   4,314    2,307 
Advisory fees   (599)   (574)
Net income fee   (250)   (249)
Cost reimbursements   (220)   (190)
Expenses Paid by Advisor   (2)   (3)
Interest income   2,664    2,725 
Income Tax   (768)   (762)
AMT Credit   162    — 
Balance, September 30,  $95,827   $89,475 

 

We have historically engaged in and will continue to engage in certain business transactions with related parties, including but not limited to asset acquisitions and dispositions. Transactions involving related parties cannot be presumed to be carried out on an arm’s length basis due to the absence of free market forces that naturally exist in business dealings between two or more unrelated entities. Related party transactions may not always be favorable to our business and may include terms, conditions and agreements that are not necessarily beneficial to or in the best interest of the Company.