PROPERTY CO-TENANCY
                       OWNERSHIP AGREEMENT
            (Timber Lodge Steakhouse - St. Cloud, MN)


THIS CO-TENANCY AGREEMENT,

Made and entered into as of the 9th day of December, 1999, by and
between  William Jay McNaughtan and Georgeann McNaughtan, married
with  rights  of survivorship, (hereinafter called "McNaughtan"),
and  AEI  Real  Estate Fund XVII Limited Partnership (hereinafter
called  "Fund XVII") (McNaughtan, Fund XVII (and any other  Owner
in   Fee  where  the  context  so  indicates)  being  hereinafter
sometimes collectively called "Co-Tenants" and referred to in the
neuter gender).

WITNESSETH:

WHEREAS,  Fund XVII presently owns an undivided 17.2367% interest
in  and  to, and McNaughtan presently owns an undivided  11.7244%
interest  in and to, and Marshall M. Kilduff and Pat S.  Kilduff,
Trustees  of  the Kilduff 1996 Revocable Trust presently  own  an
undivided  9.5671%  interest in and to, and Kathleen  DeVoe  Hans
presently  owns  an undivided 11.9502% interest in  and  to,  and
Kenneth F. Cairns presently owns an undivided 5.2581% interest in
and  to,  and  VTA Building Company presently owns  an  undivided
11.9502%  interest  in and to, and the Catharine  C.  Whittenburg
Testamentary  Trust for J.A. Whittenburg IV or assigns  presently
owns  an  undivided 11.9502% interest in and to, and  Charles  R.
Amos and Sharon L. Amos, Trustees of the Charles R. and Sharon L.
Amos  Family  Trust  Dated  March 21,  1995,  presently  owns  an
undivided 10.8030% interest in and to, and W. E. and Hazel  Mason
of  the  Mason  Living Trust presently own an  undivided  9.5601%
interest  in and to the land, situated in the City of St.  Cloud,
County  of  Stearns,  and  State of MN, (legally  described  upon
Exhibit A attached hereto and hereby made a part hereof)  and  in
and  to  the  improvements  located thereon  (hereinafter  called
"Premises");

WHEREAS,  The  parties  hereto wish to provide  for  the  orderly
operation   and  management  of  the  Premises  and  McNaughtan's
interest by Fund XVII; the continued leasing of space within  the
Premises;  for the distribution of income from and  the  pro-rata
sharing in expenses of the Premises.

NOW THEREFORE, in consideration of the purchase by McNaughtan  of
an  undivided interest in and to the Premises, for at  least  One
Dollar  ($1.00) and other good and valuable consideration by  the
parties  hereto  to  one another in hand paid,  the  receipt  and
sufficiency of which are hereby acknowledged, and of  the  mutual
covenants and agreements herein contained, it is hereby agreed by
and between the parties hereto, as follows:

1.    The  operation  and  management of the  Premises  shall  be
delegated  to  Fund XVII, or its designated agent, successors  or
assigns.  Provided, however, if Fund XVII shall sell all  of  its
interest in the Premises, the duties and obligations of Fund XVII
respecting  management  of  the Premises  as  set  forth  herein,
including but not limited to paragraphs 2, 3, and 4 hereof, shall
be exercised by the holder or holders of a majority undivided co-
tenancy interest in the Premises. Except as hereinafter expressly
provided to the contrary, each of the parties hereto agrees to be
bound  by  the  decisions  of  Fund  XVII  with  respect  to  all
administrative,  operational  and  management  matters   of   the
property  comprising the Premises, including but not  limited  to
the  management  of  the net lease agreement  for  the  Premises.
McNaughtan  hereto hereby designates Fund XVII as  its  sole  and
exclusive  agent  to deal with, and Fund XVII  retains  the  sole
right to deal with, any property agent or tenant and to negotiate
and  enter  into,  on terms and provisions satisfactory  to  Fund
XVII,  monitor, execute and enforce the terms of leases of  space
within the Premises, including but not limited to any amendments,
consents to assignment, sublet, releases



Co-Tenant Initial: /s/ WJM /s/ GM
Co-Tenancy Agreement for Timber Lodge-St. Cloud, MN



or  modifications to leases or guarantees of lease  or  easements
affecting the Premises, on behalf of McNaughtan. As long as  Fund
XVII  owns  an  interest  in the Premises,  only  Fund  XVII  may
obligate McNaughtan with respect to any expense for the Premises.

As  further set forth in paragraph 2 hereof, Fund XVII agrees  to
require  any  lessee  of the Premises to name  McNaughtan  as  an
insured  or additional insured in all insurance policies provided
for,  or  contemplated by, any lease on the Premises.  Fund  XVII
shall  use  its  best efforts to obtain endorsements  adding  Co-
Tenants   to  said  policies  from  lessee  within  30  days   of
commencement  of  this agreement. In any event, Fund  XVII  shall
distribute  any insurance proceeds it may receive, to the  extent
consistent  with any lease on the Premises, to the Co-Tenants  in
proportion to their respective ownership of the Premises.

2.    Income and expenses shall be allocated among the Co-Tenants
in  proportion to their respective share(s) of ownership.  Shares
of  net income shall be pro-rated for any partial calendar  years
included within the term of this Agreement. Fund XVII may  offset
against,  pay to itself and deduct from any payment due to  under
this  Agreement, and may pay to itself the amount of McNaughtan's
share  of any reasonable expenses of the Premises which  are  not
paid  by McNaughtan to Fund XVII or its assigns, within ten  (10)
days   after  demand  by  Fund  XVII.  In  the  event  there   is
insufficient  operating income from which to deduct  McNaughtan's
unpaid share of operating expenses, Fund XVII may pursue any  and
all legal remedies for collection.

Operating  Expenses  shall include all normal operating  expense,
including  but not limited to: maintenance, utilities,  supplies,
labor, management, advertising and promotional expenses, salaries
and wages of rental and management personnel, leasing commissions
to  third  parties, a monthly accrual to pay insurance  premiums,
real  estate taxes, installments of special assessments  and  for
structural repairs and replacements, management fees, legal  fees
and accounting fees, but excluding all operating expenses paid by
tenant under terms of any lease agreement of the Premises.

McNaughtan has no requirement to, but has, nonetheless elected to
retain, and agrees to annually reimburse, Fund XVII in the amount
of  $700 for the expenses, direct and indirect, incurred by  Fund
XVII  in  providing  McNaughtan  with  quarterly  accounting  and
distributions  of  McNaughtan's  share  of  net  income  and  for
tracking, reporting and assessing the calculation of McNaughtan's
share  of  operating  expenses incurred from the  Premises.  This
invoice   amount  shall  be  pro-rated  for  partial  years   and
McNaughtan  authorizes  Fund  XVII to  deduct  such  amount  from
McNaughtan's  share of revenue from the Premises. McNaughtan  may
terminate  this agreement in this paragraph respecting accounting
and distributions at any time and attempt to collect its share of
rental  income directly from the tenant; however, enforcement  of
all  other provisions of the lease remains the sole right of Fund
XVII  pursuant to Section 1 hereof.  Fund XVII agrees to  perform
its  obligation under this paragraph throughout the term of  this
agreement.

3.    Full, accurate and complete books of account shall be  kept
in  accordance  with generally accepted accounting principles  at
Fund  XVII's  principal  office, and each  Co-Tenant  shall  have
access  to  such books and may inspect and copy any part  thereof
during  normal business hours. Within ninety (90) days after  the
end of each calendar year during the term hereof, Fund XVII shall
prepare  an  accurate income statement for the ownership  of  the
Premises for said calendar year and shall furnish copies  of  the
same to all Co-Tenants. Quarterly, as its share, McNaughtan shall
be  entitled  to  receive 11.7244% of all  items  of  income  and
expense  generated  by  the  Premises.   Upon  receipt  of   said
accounting,  if the payments received by each Co-Tenant  pursuant
to  this  Paragraph 3 do not equal, in the aggregate, the amounts
which  each are entitled to receive proportional to its share  of
ownership  with  respect  to  said  calendar  year  pursuant   to
Paragraph  2 hereof, an appropriate adjustment shall be  made  so
that each Co-Tenant receives the amount to which it is entitled.



Co-Tenant Initial: /s/ WJM /s/ GM
Co-Tenancy Agreement for Timber Lodge-St. Cloud, MN


4.    If  Net Income from the Premises is less than $0.00  (i.e.,
the  Premises  operates  at a loss), or if capital  improvements,
repairs, and/or replacements, for which adequate reserves do  not
exist,  need  to  be made to the Premises, the  Co-Tenants,  upon
receipt  of  a  written request therefor from Fund  XVII,  shall,
within  fifteen (15) business days after receipt of notice,  make
payment to Fund XVII sufficient to pay said net operating  losses
and  to provide necessary operating capital for the premises  and
to   pay   for   said   capital  improvements,   repairs   and/or
replacements, all in proportion to their undivided  interests  in
and to the Premises.

5.    Co-Tenants  may, at any time, sell, finance,  or  otherwise
create  a lien upon their interest in the Premises but only  upon
their  interest  and not upon any part of the interest  held,  or
owned, by any other Co-Tenant.  All Co-Tenants reserve the  right
to escrow proceeds from a sale of their interests in the Premises
to obtain tax deferral by the purchase of replacement property.

6.    If any Co-Tenant shall be in default with respect to any of
its  obligations hereunder, and if said default is not  corrected
within  thirty  (30)  days after receipt by said  defaulting  Co-
Tenant  of written notice of said default, or within a reasonable
period  if  said default does not consist solely of a failure  to
pay money, the remaining Co-Tenant(s) may resort to any available
remedy to cure said default at law, in equity, or by statute.

7.    This Co-Tenancy agreement shall continue in full force  and
effect  and shall bind and inure to the benefit of the  Co-Tenant
and  their respective heirs, executors, administrators,  personal
representatives, successors and permitted assigns until  November
30,  2032  or upon the sale of the entire Premises in  accordance
with  the  terms hereof and proper disbursement of  the  proceeds
thereof,   whichever  shall  first  occur.   Unless  specifically
identified  as  a  personal contract right or obligation  herein,
this  agreement shall run with any interest in the  Property  and
with  the  title thereto. Once any person, party  or  entity  has
ceased  to  have an interest in fee in any portion of the  Entire
Property,  it  shall not be bound by, subject to or benefit  from
the  terms  hereof;  but  its  heirs, executors,  administrators,
personal representatives, successors or assigns, as the case  may
be, shall be substituted for it hereunder.

8.    Any notice or election required or permitted to be given or
served by any party hereto to, or upon any other, shall be  given
to  all known Co-Tenants and deemed given or served in accordance
with  the  provisions  of  this  Agreement,  if  said  notice  or
elections addressed as follows;

If to Fund XVII:

AEI Real Estate Fund XVII Limited Partnership
1300 Minnesota World Trade Center
30 E. Seventh Street
St. Paul, Minnesota  55101

If to McNaughtan:

William Jay McNaughtan and Georgeann McNaughtan
1695 E. Center Street
Heber City, UT  84032



Co-Tenant Initial: /s/ WJM /s/ GM
Co-Tenancy Agreement for Timber Lodge-St. Cloud, MN




If to Kilduff:

Marshall M. Kilduff, Trustee
Pat S. Kilduff, Trustee
321 Lake Street
San Francisco, CA  94118-1320

If to Hans:

Kathleen DeVoe Hans
310 Desert Meadow Court
Reno, NV  89502

If to Cairns:

Kenneth F. Cairns
24600 SE Ladd Hill Road
Sherwood, OR  97140

If to VTA :

VTA Building Company
12825 Falcon Drive
Apple Valley, MN  55124

If to Amos:

Charles R. Amos and Sharon L. Amos, Trustees
30033 Knoll View Drive
Rancho Palos Verdes, CA  90275

If to Mason:

Mason Living Trust
136 Baltusrol Road
Franklin, TN  37069

If to Whittenburg:

The Catharine C. Whittenburg Testamentary Trust for
J. A.  Whittenburg IV or Assigns
Post Office Box 26
Amarillo, TX  79105

Each mailed notice or election shall be deemed to have been given
to,  or served upon, the party to which addressed on the date the
same  is  deposited in the United States certified  mail,  return
receipt  requested,  postage prepaid, or given  to  a  nationally
recognized  courier  service guaranteeing overnight  delivery  as
properly addressed in the manner above provided. Any party hereto
may  change  its address for the service of notice  hereunder  by
delivering  written notice of said change to  the  other  parties
hereunder, in the manner above specified, at least ten (10)  days
prior to the effective date of said change.


Co-Tenant Initial: /s/ WJM /s/ GM
Co-Tenancy Agreement for Timber Lodge-St. Cloud, MN



9.    This  Agreement shall not create any partnership  or  joint
venture  among or between the Co-Tenants or any of them, and  the
only  relationship  among  and between the  Co-Tenants  hereunder
shall  be  that  of owners of the premises as tenants  in  common
subject to the terms hereof.

10.    The  unenforceability or invalidity of  any  provision  or
provisions  of  this Agreement as to any person or  circumstances
shall  not render that provision, nor any other provision hereof,
unenforceable or invalid as to any other person or circumstances,
and  all  provisions hereof, in all other respects, shall  remain
valid and enforceable.

11.   In  the  event  any litigation arises between  the  parties
hereto  relating  to  this Agreement, or any  of  the  provisions
hereof, the party prevailing in such action shall be entitled  to
receive  from the losing party, in addition to all other  relief,
remedies  and  damages  to  which it is otherwise  entitled,  all
reasonable  costs  and expenses, including reasonable  attorneys'
fees,  incurred by the prevailing party in connection  with  said
litigation.
IN WITNESS WHEREOF, The parties hereto have caused this Agreement
to be executed and delivered, as of the day and year first above
written.

McNaughtan

          By:/s/ William Jay McNaughtan
                 William Jay McNaughtan

,         By:/s/ Georgeann McNaughtan
                 Georgeann McNaughtan



                        WITNESS:
                   (as to both signers)


                   /s/ Sherman Smoot


                       Sherman Smoot
                       (Print Name)



STATE OF UTAH)
                              ) ss
COUNTY OF WASATCH)

I,  a Notary Public in and for the state and county of aforesaid,
hereby  certify there appeared before me this 6 day of  December,
1999,  William  Jay  McNaughtan  and  Georgeann  McNaughtan   who
executed the foregoing instrument in said capacity.

                              /s/ Lyle Gertsch
                                  Notary Public

                                              [notary seal]

Co-Tenant Initial: /s/ WJM /s/ GM
Co-Tenancy Agreement for Timber Lodge-St. Cloud, MN




Fund XVII  AEI Real Estate Fund XVII Limited Partnership

           By:  AEI Fund Management XVII, Inc., its corporate general partner

           By:/s/ Robert P Johnson
                  Robert P. Johnson, President

          WITNESS:

          /s/ Jill Rayburn

              Jill Rayburn
              (Print Name)


State of Minnesota )
                                   ) ss.
County of Ramsey  )

I,  a Notary Public in and for the state and county of aforesaid,
hereby certify there appeared before me this 9th day of November,
1999,  Robert P. Johnson, President of AEI Fund Management  XVII,
Inc.,  corporate  general partner of AEI Real  Estate  Fund  XVII
Limited Partnership who executed the foregoing instrument in said
capacity  and  on  behalf of the corporation in its  capacity  as
corporate general partner, on behalf of said limited partnership.

                              /s/ Linda A Bisdorf
                                   Notary Public


                              [notary seal]


Co-Tenant Initial: /s/ WJM /s/ GM
Co-Tenancy Agreement for Timber Lodge-St. Cloud, MN



                                 EXHIBIT A

           That  part  of  Lot  Two (2), Block  One  (1)  Fischer
     Additions, a duly recorded plat in the office of the  County
     Recorder/Registar   of  titles in Stearns County, Minnesota,
     lying  North  of a line drawn parallel with and 327.20 feet
     Southerly  of,  as  measured at right angles  to,  the most
     Northerly line of said Lot Two (2); together with the rights
     of  ingress, egress, utilites easements and such other rights
     which constitute an interest in real property  as created in
     that  certain Easement and Maintenance Agreement dated Dec.
     10,  1996,  file  of record Dec. 13, 1996  as  Document  No.
     835857, and in torrens as Document No. 24060.