Related Parties

ID Status Date Public/Private Industry AHACPA Contact
#7406 Closed public Multifamily Les Sparks
Customer Reply

I have clients who own several 232 facilities within close physical proximity of each other. They are considering using another related party entity to provide shared services for these facilities, such as general staffing, bookkeeping and accounting, marketing, and the like. They already have some related party transactions in addition to the management company fees, but this will make those numbers much higher. How sensitive is HUD to this type of related party transaction, and is there a point where is it just not a good idea, even thought they feel they could save money by controlling these costs ? All related party transactions are disclosed in the financials and in the REAC Submission.

Kathy Christensen

From Les Sparks:
If they have entered into a management agreement (9839-ORCF) I would assume that HUD would be supportive of centralized services provided to the projects. I do not know what the difference would be from a normal multifamily projects being managed in a similar manner. To me it all comes down to what was agreed to and well they manage the process.

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