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first condominium complexes in the New Hampshire seacoast area,
petitioner educated real estate agents and potential buyers about
the benefits of condominium ownership. As units were completed,
petitioner was involved in negotiations with buyers regarding
additional features to be put into the units and approval of the
pricing structure of the features. Petitioner also arranged
customer financing, and attended most of the closings with the
buyers in order to handle any last-minute problems. Petitioner
acted as the liaison with the buyers following the sales. He
followed up to assure that all the features were completed to the
buyer’s satisfaction. He responded to buyers’ complaints, and,
when appropriate, called in subcontractors to redo work which
they guaranteed. If necessary, he negotiated settlements with
the buyers. The partnership sold most of the condominiums by
early 1987. Petitioner did not provide significant management
services to the partnership during 1987, and the partnership did
not accrue any management fees to petitioner after 1986.
White Enterprises provided bookkeeping and accounting
services to the partnership from 1984 through 1987 through its
employee Darius (John) Davis. White Enterprises was compensated
for the arrangement. Initially, Mr. Davis prepared either cash
flow statements or income statements for the partnership
approximately three times per year; subsequently, he prepared
statements monthly. Once prepared, Mr. Davis sent copies of the
statements to petitioner. The statements did not separately list
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