FORM 10-QSB--QUARTERLY OR TRANSITIONAL REPORT UNDER SECTION 13 OR 15(d) OF

                       THE SECURITIES EXCHANGE ACT OF 1934
                        Quarterly or Transitional Report
                      U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   Form 10-QSB

(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
    ACT OF 1934

                   For the quarterly period ended March 31, 2000

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
    ACT OF 1934

                For the transition period from _________to _________

                         Commission file number 0-14369

                     SHELTER PROPERTIES VII LIMITED PARTNERSHIP

         (Exact name of small business issuer as specified in its charter)

         South Carolina                                          57-0784852
(State or other jurisdiction of                               (I.R.S. Employer
 incorporation or organization)                              Identification No.)

                          55 Beattie Place, P.O. Box 1089
                         Greenville, South Carolina 29602
                      (Address of principal executive offices)

                                 (864) 239-1000

                           (Issuer's telephone number)

Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Exchange  Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports),  and (2) has been
subject to such filing requirements for the past 90 days. Yes X No


                         PART I - FINANCIAL INFORMATION

ITEM 1.     FINANCIAL STATEMENTS

a)

                     SHELTER PROPERTIES VII LIMITED PARTNERSHIP
                           CONSOLIDATED BALANCE SHEET

                                   (Unaudited)

                        (in thousands, except per unit data)

                                 March 31, 2000

Assets

   Cash and cash equivalents                                            $   473
   Receivables and deposits                                                 295
   Restricted escrows                                                        39
   Other assets                                                             149
   Investment properties:
      Land                                               $  1,774
      Buildings and related personal property              21,181
                                                           22,955

      Less accumulated depreciation                       (11,793)        11,162
                                                                        $ 12,118

Liabilities and Partners' (Deficit) Capital
Liabilities

   Accounts payable                                                      $    93
   Tenant security deposit liabilities                                        84
   Accrued property taxes                                                    254
   Other liabilities                                                         154
   Mortgage notes payable                                                 10,674

Partners' (Deficit) Capital

   General partners                                       $ (141)
   Limited partners (17,343 units issued and
      outstanding)                                          1,000            859
                                                                        $ 12,118

            See Accompanying Notes to Consolidated Financial Statements

b)

                     SHELTER PROPERTIES VII LIMITED PARTNERSHIP
                      CONSOLIDATED STATEMENTS OF OPERATIONS

                                   (Unaudited)

                          (in thousands, except unit data)



                                                              Three Months Ended
                                                                   March 31,
                                                               2000        1999
Revenues:
   Rental income                                               $ 957       $ 933
   Other income                                                   45          44
      Total revenues                                           1,002         977

Expenses:
   Operating                                                     398         322
   General and administrative                                     37          43
   Depreciation                                                  208         211
   Interest                                                      201         224
   Property taxes                                                 76          51
      Total expenses                                             920         851

Net income                                                     $ 82        $ 126

Net income allocated to general partners (1%)                   $ 1         $ 1
Net income allocated to limited partners (99%)                    81         125

                                                               $ 82        $ 126
Net income per limited partnership unit                       $ 4.73      $ 7.21

Distributions per limited partnership unit                     $ --       $34.25

            See Accompanying Notes to Consolidated Financial Statements


c)

                     SHELTER PROPERTIES VII LIMITED PARTNERSHIP
          CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' (DEFICIT) CAPITAL
                                   (Unaudited)

                          (in thousands, except unit data)


<TABLE>
<CAPTION>

                                      Limited
                                     Partnership     General      Limited
                                        Units        Partners    Partners     Total

<S>                                     <C>            <C>        <C>        <C>
Original capital contributions          17,343       $    2       $17,343    $17,345

Partners' (deficit) capital at
   December 31, 1999                    17,343       $ (142)      $   919    $   777

Net income for the three months
   ended March 31, 2000                     --            1            81         82

Partners' (deficit) capital at
   March 31, 2000                       17,343       $ (141)      $ 1,000    $   859

            See Accompanying Notes to Consolidated Financial Statements

</TABLE>

d)

                     SHELTER PROPERTIES VII LIMITED PARTNERSHIP
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                                   (Unaudited)

                                   (in thousands)

<TABLE>
<CAPTION>

                                                                 Three Months Ended
                                                                       March 31,

                                                                  2000        1999
Cash flows from operating activities:

<S>                                                           <C>          <C>
   Net income                                                 $    82      $   126
   Adjustments to reconcile net income to net
     cash provided by operating activities:
        Depreciation                                              208          211
        Amortization of discounts and loan costs                   11           14
        Change in accounts:
            Receivables and deposits                             (115)         (18)
            Other assets                                          (34)           1
            Accounts payable                                       20          (10)
            Tenant security deposit liabilities                     5            5
            Accrued property taxes                                 34           13
            Other liabilities                                     (35)          21

               Net cash provided by operating activities          171          363

Cash flows from investing activities:

   Property improvements and replacements                        (121)         (70)
   Net deposits to restricted escrows                              --           (1)

               Net cash used in investing activities             (121)         (71)

Cash flows from financing activities:

   Payments on mortgage notes payable                             (56)         (51)
   Distributions to partners                                       --         (600)

               Net cash used in financing activities              (56)        (651)

Net decrease in cash and cash equivalents                          (1)        (359)
Cash and cash equivalents at beginning of period                  474        1,201
Cash and cash equivalents at end of period                    $   473      $   842

Supplemental disclosure of cash flow information:

   Cash paid for interest                                     $   205      $   210

            See Accompanying Notes to Consolidated Financial Statements

</TABLE>

e)

                     SHELTER PROPERTIES VII LIMITED PARTNERSHIP
                     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

Note A - Basis of Presentation

The  accompanying   unaudited   consolidated  financial  statements  of  Shelter
Properties VII Limited Partnership (the "Partnership" or "Registrant") have been
prepared in accordance with generally accepted accounting principles for interim
financial  information and with the instructions to Form 10-QSB and Item 310 (b)
of Regulation S-B.  Accordingly,  they do not include all of the information and
footnotes  required by generally  accepted  accounting  principles  for complete
financial  statements.  In the opinion of Shelter  Realty VII  Corporation  (the
"Corporate  General Partner"),  all adjustments  (consisting of normal recurring
accruals)  considered  necessary  for a fair  presentation  have been  included.
Operating  results for the three month  period  ended  March 31,  2000,  are not
necessarily  indicative  of the results that may be expected for the fiscal year
ending  December 31, 2000. For further  information,  refer to the  consolidated
financial  statements and footnotes thereto included in the Partnership's Annual
Report on Form 10-KSB for the year ended December 31, 1999

Principles of Consolidation:

The Registrant's financial statements include all the accounts of the Registrant
and its  99.9%  owned  partnership.  The  general  partner  of the  consolidated
partnership is Shelter Realty VII  Corporation.  Shelter Realty VII  Corporation
may be removed by the Registrant;  therefore,  the  consolidated  partnership is
controlled and consolidated by the Registrant. All significant  interpartnership
transactions have been eliminated.

Note B - Transfer of Control

Pursuant  to a series  of  transactions  which  closed  on  October  1, 1998 and
February 26, 1999,  Insignia Financial Group, Inc. and Insignia Properties Trust
merged into Apartment  Investment and Management Company  ("AIMCO"),  a publicly
traded real estate investment trust, with AIMCO being the surviving  corporation
(the "Insignia Merger").  As a result, AIMCO acquired 100% ownership interest in
the Corporate  General Partner.  The Corporate  General Partner does not believe
that this  transaction has had or will have a material effect on the affairs and
operations of the Partnership.

Note C - Reconciliation of Cash Flows

The  following  is  a  reconciliation   of  the  subtotal  on  the  accompanying
consolidated  statements of cash flows captioned "net cash provided by operating
activities"  to "net cash used in  operations",  as defined  in the  Partnership
Agreement.  However,  "net cash used in operations"  should not be considered an
alternative  to  net  income  as an  indicator  of the  Partnership's  operating
performance or to cash flows as a measure of liquidity.

                                                         Three Months Ended
                                                             March 31,
                                                       2000             1999
                                                           (in thousands)
Net cash provided by operating activities              $ 176           $  363
   Payments on mortgage notes payable                    (56)             (51)
   Property improvements and replacements               (121)             (70)
   Change in restricted escrows, net                      --               (1)
   Changes in reserves for net operating
      liabilities                                        125              (12)
   Additional reserves                                  (124)            (229)

      Net cash used in operations                       $ --            $  --

The Corporate  General Partner  reserved an additional  $124,000 and $229,000 at
March 31, 2000 and 1999, respectively,  to fund capital improvements and repairs
at the Partnership's two investment properties.

Note D - Transactions with Affiliated Parties

The  Partnership  has no employees  and is dependent  on the  Corporate  General
Partner  and  its  affiliates  for  the  management  and  administration  of all
partnership  activities.  The  Partnership  Agreement  provides  for (i) certain
payments to affiliates for services and (ii)  reimbursement  of certain expenses
incurred by affiliates on behalf of the Partnership. The following payments were
paid or accrued to the Corporate General Partner and affiliates during the three
months ended March 31, 2000 and 1999:

                                                          2000       1999
                                                          (in thousands)

Property management fees (included in
  operating expenses)                                     $ 52       $ 49
Reimbursements for services of affiliates
  (included in general and administrative
  and operating expenses and investment properties)         22         21

During  the three  months  ended  March 31,  2000 and  1999,  affiliates  of the
Corporate  General  Partner were  entitled to receive 5% of gross  receipts from
both of the Registrant's  properties for providing property management services.
The Registrant paid to such affiliates approximately $52,000 and $49,000 for the
three months ended March 31, 2000 and 1999, respectively.

An  affiliate  of the  Corporate  General  Partner  received  reimbursements  of
accountable  administrative  expenses  amounting  to  approximately  $22,000 and
$21,000 for the three months ended March 31, 2000 and 1999, respectively.

AIMCO and its affiliates  currently own 9,039 limited  partnership  units in the
Partnership  representing  52.12% of the  outstanding  units.  A number of these
units were acquired  pursuant to tender offers made by AIMCO or its  affiliates.
It is possible  that AIMCO or its  affiliates  will make one or more  additional
offers to acquire  additional limited  partnership  interests in the Partnership
for cash or in exchange for units in the operating  partnership of AIMCO.  Under
the  Partnership  Agreement,  unitholders  holding a  majority  of the Units are
entitled to take action with respect to a variety of matters. As a result of its
ownership  of  52.12%  of the  outstanding  units,  AIMCO  is in a  position  to
influence all voting  decisions with respect to the  Registrant.  When voting on
matters,  AIMCO would in all  likelihood  vote the Units it acquired in a manner
favorable  to the interest of the  Corporate  General  Partner  because of their
affiliation with the Corporate General Partner.

Note E - Segment Reporting

Description  of the types of products  and  services  from which the  reportable
segment derives its revenues:

The  Partnership  has  one  reportable  segment:   residential  properties.  The
Partnership's  residential property segment consists of two apartment complexes,
located in Tennessee and Colorado.  The  Partnership  rents  apartment  units to
tenants for terms that are typically twelve months or less.

Measurement of segment profit or loss:

The  Partnership  evaluates  performance  based on segment  profit (loss) before
depreciation.  The accounting policies of the reportable segment are the same as
those of the Partnership as described in the Partnership's Annual Report on Form
10-KSB for the year ended December 31, 1999.

Factors management used to identify the enterprise's reportable segment:

The  Partnership's  reportable  segment  consists of investment  properties that
offer similar products and services.  Although each of the investment properties
is  managed  separately,  they have been  aggregated  into one  segment  as they
provide services with similar types of products and customers.

Segment information for the three month periods ended March 31, 2000 and 1999 is
shown  in  the  tables   below.   The  "Other"   column   includes   partnership
administration  related  items and  income  and  expense  not  allocated  to the
reportable segment.
<TABLE>
<CAPTION>

                     2000                        Residential      Other       Totals
                                                            (in thousands)
<S>                                                 <C>            <C>        <C>
Rental income                                       $ 957          $ --       $  957
Other income                                            43             2          45
Interest expense                                       201            --         201
Depreciation                                           208            --         208
General and administrative expense                      --            37          37
Segment profit (loss)                                  117           (35)         82
Total assets                                        12,018           100      12,118
Capital expenditures for investment
  properties                                           121            --         121
</TABLE>


<TABLE>
<CAPTION>

                     1999                        Residential      Other       Totals
                                                            (in thousands)
<S>                                                 <C>            <C>        <C>
Rental income                                       $ 933          $ --       $  933
Other income                                            40             4          44
Interest expense                                       224            --         224
Depreciation                                           211            --         211
General and administrative expense                      --            43          43
Segment profit (loss)                                  165           (39)        126
Total assets                                        12,208           186      12,394
Capital expenditures for investment
  properties                                            70            --          70
</TABLE>

Note F - Legal Proceedings

In March 1998, several putative unit holders of limited partnership units of the
Partnership  commenced an action  entitled  Rosalie  Nuanes,  et al. v. Insignia
Financial  Group,  Inc., et al. in the Superior Court of the State of California
for the County of San Mateo. The plaintiffs  named as defendants,  among others,
the Partnership,  the Corporate  General Partner and several of their affiliated
partnerships  and corporate  entities.  The action  purports to assert claims on
behalf of a class of limited  partners and derivatively on behalf of a number of
limited  partnerships  (including  the  Partnership)  which are named as nominal
defendants,  challenging  the  acquisition  by Insignia  Financial  Group,  Inc.
("Insignia")  and  entities  which  were,  at one time,  affiliates  of Insignia
("Insignia  Affiliates") of interests in certain general partner entities,  past
tender offers by Insignia  Affiliates to acquire limited  partnership units, the
management of partnerships  by Insignia  Affiliates and the Insignia Merger (see
"Note B - Transfer  of  Control").  The  plaintiffs  seek  monetary  damages and
equitable relief, including judicial dissolution of the Partnership. On June 25,
1998,  the Corporate  General  Partner filed a motion  seeking  dismissal of the
action.  In lieu of  responding  to the  motion,  the  plaintiffs  have filed an
amended complaint.  The Corporate General Partner filed demurrers to the amended
complaint which were heard February 1999.  Pending the ruling on such demurrers,
settlement negotiations commenced. On November 2, 1999, the parties executed and
filed a  Stipulation  of  Settlement  settling  claims,  subject to final  court
approval, on behalf of the Partnership and all limited partners who own units as
of November 3, 1999.  Preliminary  approval of the  settlement  was  obtained on
November 3, 1999 from the Superior Court of the State of  California,  County of
San Mateo, at which time the Court set a final approval hearing for December 10,
1999.  Prior to the  December  10,  1999  hearing  the  Court  received  various
objections to the settlement,  including a challenge to the Court's  preliminary
approval based upon the alleged lack of authority of class  plaintiffs'  counsel
to enter the settlement. On December 14, 1999, the Corporate General Partner and
its affiliates terminated the proposed settlement. Certain plaintiffs have filed
a motion to  disqualify  some of the  plaintiffs'  counsel  in the  action.  The
Corporate  General Partner does not anticipate  that costs  associated with this
case will be material to the Partnership's overall operations.

The  Partnership is unaware of any other pending or outstanding  litigation that
is not of a routine nature arising in the ordinary course of business.

Item 2.     Management's Discussion and Analysis or Plan of Operation

The  matters  discussed  in this Form  10-QSB  contain  certain  forward-looking
statements  and  involve  risks and  uncertainties  (including  changing  market
conditions,   competitive  and  regulatory   matters,   etc.)  detailed  in  the
disclosures  contained  in this  Form  10-QSB  and the  other  filings  with the
Securities and Exchange Commission made by the Registrant from time to time. The
discussion of the  Registrant's  business and results of  operations,  including
forward-looking  statements  pertaining  to such  matters,  does not  take  into
account the effects of any changes to the  Registrant's  business and results of
operation.  Accordingly,  actual  results  could  differ  materially  from those
projected in the forward-looking  statements as a result of a number of factors,
including those identified herein.

The Partnership's  investment properties consist of two apartment complexes. The
following table sets forth the average occupancy of the properties for the three
months ended March 31, 2000 and 1999:

                                                             Average
                                                            Occupancy

Property                                                2000          1999

Hickory Ridge Apartments                                95%           94%
  Memphis, Tennessee
Governor's Park Apartments                              92%           94%
  Ft. Collins, Colorado

Results of Operations

The  Partnership's net income for the three months ended March 31, 2000 and 1999
was approximately $82,000 and $126,000, respectively. The decrease in net income
is due to an  increase  in total  expenses  which  was  partially  offset  by an
increase  in  total  revenues.  Total  revenues  increased  primarily  due to an
increase in rental income.  The increase in rental income is due primarily to an
increase in the average  rental  rates at both of the  Partnership's  investment
properties  and to a slight  increase in the average  occupancy  rate at Hickory
Ridge Apartments which more than offset the small decrease in average  occupancy
at Governor's Park Apartments.  Other income remained  relatively  constant over
the comparable periods.

Total  expenses  increased  during the  comparable  periods due to  increases in
operating and property tax expense which were  partially  offset by decreases in
interest and general and administrative expenses.  Depreciation expense remained
relatively  constant.  The increase in operating  expense is due primarily to an
increase  in  maintenance  expense,  which was due  primarily  to  increases  in
interior contract painting at both of the Partnership's properties. The increase
in property  tax expense is due to the City of Memphis  annexing  Hickory  Ridge
Apartments  into the city limits during the last quarter of 1999. The annexation
of Hickory Ridge Apartments  resulted in the property being responsible for city
taxes  during the three  months  ended March 31, 2000 which were not  applicable
during the three months ended March 31, 1999.  Interest  expense  decreased as a
result of decreasing  balances on the mortgage  principal as a result of monthly
mortgage payments.

General  and  administrative  decreased  primarily  as a result of a decrease in
legal costs for the three  months  ended March 31, 2000 as compared to the three
months  ended March 31, 1999,  due to the  Partnership's  portion of  settlement
costs  disclosed in previous  quarters.  Included in general and  administrative
expense at both March 31,  2000 and 1999 are  management  reimbursements  to the
Corporate General Partner allowed under the Partnership Agreement.  In addition,
costs associated with the quarterly and annual communications with investors and
regulatory  agencies  and  the  annual  audit  and  appraisals  required  by the
Partnership Agreement are also included.

As part of the ongoing business plan of the Partnership,  the Corporate  General
Partner  monitors  the  rental  market  environment  of each  of its  investment
properties  to assess  the  feasibility  of  increasing  rents,  maintaining  or
increasing  occupancy  levels and protecting the  Partnership  from increases in
expenses.  As part of this plan,  the  Corporate  General  Partner  attempts  to
protect  the  Partnership  from the  burden of  inflation-related  increases  in
expenses by increasing  rents and  maintaining a high overall  occupancy  level.
However,  due to  changing  market  conditions,  which can  result in the use of
rental  concessions and rental reductions to offset softening market conditions,
there is no guarantee that the Corporate General Partner will be able to sustain
such a plan.

Liquidity and Capital Resources

At March 31, 2000, the Registrant had cash and cash equivalents of approximately
$473,000  compared to approximately  $842,000 at March 31, 1999. The decrease in
cash and cash  equivalents  of  approximately  $1,000 for the three months ended
March  31,  2000,  from the  Partnership's  year  end,  is due to  approximately
$121,000 of cash used in investing activities and approximately  $56,000 of cash
used in  financing  activities  which  was  partially  offset  by  approximately
$176,000  of cash  provided  by  operating  activities.  Cash used in  financing
activities  consisted  primarily of  principal  payments  made on the  mortgages
encumbering  the  Registrant's  properties.  Cash used in  investing  activities
consisted of property improvements and replacements.  The Registrant invests its
working capital reserves in a money market account.

The sufficiency of existing  liquid assets to meet future  liquidity and capital
expenditure   requirements   is  directly   related  to  the  level  of  capital
expenditures  required at both of the  properties  to  adequately  maintain  the
physical  assets and other  operating needs of the Registrant and to comply with
Federal, state, local, legal and regulatory  requirements.  Capital improvements
planned for both of the Registrant's properties are detailed below.

Hickory Ridge Apartments:  The Partnership has budgeted  approximately  $166,000
for  the  year  2000  for  capital  improvements,  consisting  primarily  of air
conditioning   upgrades,   floor  covering  and  appliance   replacements.   The
Partnership  completed  approximately $99,000 in capital expenditures at Hickory
Ridge  Apartments as of March 31, 2000,  consisting  primarily of floor covering
replacement. These improvements were funded primarily from operations.

Governor's Park Apartments:  The Partnership has budgeted approximately $117,000
for the year 2000 for capital  improvements,  consisting  primarily  of plumbing
enhancements  and appliance and floor  covering  replacements.  The  Partnership
completed  approximately  $22,000 in capital  expenditures  at  Governor's  Park
Apartments as of March 31, 2000, consisting primarily of appliance replacements.
These  improvements  were  funded  primarily  from  operations  and  replacement
reserves.

The  additional  capital  improvements  planned  for  2000 at the  Partnership's
properties  will be incurred only if cash is available  from  operations or from
Partnership  reserves. To the extent that such budgeted capital improvements are
completed,  the Registrant's  distributable  cash flow, if any, may be adversely
affected at least in the short term.

The  Registrant's  current assets are thought to be sufficient for any near term
needs  (exclusive  of capital  improvements)  of the  Registrant.  The  mortgage
indebtedness of approximately  $10,674,000,  net of discount,  is amortized over
varying periods with balloon payments due at maturity, March 1, 2001 and October
15,  2003.  The  Corporate  General  Partner  will  attempt  to  refinance  such
indebtedness  and/or sell the  properties  prior to such  maturity  date. If the
properties cannot be refinanced or sold for a sufficient  amount, the Registrant
will risk losing such properties through foreclosure.

In  January   1999,   the   Partnership   distributed   approximately   $594,000
(approximately  $34.25 per limited partnership unit) to the limited partners and
approximately $6,000 to the general partners.  No distributions were made during
the  corresponding  period  of 2000.  The  Registrant's  distribution  policy is
reviewed on a semi-annual  basis.  Future cash  distributions will depend on the
levels of net cash generated from operations, the availability of cash reserves,
and the timing of debt maturities,  refinancings,  and/or property sales.  There
can be no assurance, however, that the Registrant will generate sufficient funds
from  operations  after required  capital  expenditures to permit any additional
distributions to its partners in 2000 or subsequent  periods.  Distributions may
also be  restricted  by the  requirement  to deposit  net  operating  income (as
defined in the mortgage note) into the reserve account until the reserve account
is funded by an amount equal to $200 per  apartment  unit or $37,600 in total at
Governor's Park. The reserve account is currently fully funded.


                           PART II - OTHER INFORMATION

ITEM 1.     LEGAL PROCEEDINGS

In March 1998, several putative unit holders of limited partnership units of the
Partnership  commenced an action  entitled  Rosalie  Nuanes,  et al. v. Insignia
Financial  Group,  Inc., et al. in the Superior Court of the State of California
for the County of San Mateo. The plaintiffs  named as defendants,  among others,
the Partnership,  the Corporate  General Partner and several of their affiliated
partnerships  and corporate  entities.  The action  purports to assert claims on
behalf of a class of limited  partners and derivatively on behalf of a number of
limited  partnerships  (including  the  Partnership)  which are named as nominal
defendants,  challenging  the  acquisition  by Insignia  Financial  Group,  Inc.
("Insignia")  and  entities  which  were,  at one time,  affiliates  of Insignia
("Insignia  Affiliates") of interests in certain general partner entities,  past
tender offers by Insignia  Affiliates to acquire limited  partnership units, the
management of partnerships  by Insignia  Affiliates and the Insignia Merger (see
"Part I - Financial Information, Item 1. Financial Statements. Note B - Transfer
of  Control").  The  plaintiffs  seek  monetary  damages and  equitable  relief,
including  judicial  dissolution  of the  Partnership.  On June  25,  1998,  the
Corporate  General  Partner filed a motion seeking  dismissal of the action.  In
lieu  of  responding  to the  motion,  the  plaintiffs  have  filed  an  amended
complaint.  The  Corporate  General  Partner  filed  demurrers  to  the  amended
complaint which were heard February 1999.  Pending the ruling on such demurrers,
settlement negotiations commenced. On November 2, 1999, the parties executed and
filed a  Stipulation  of  Settlement  settling  claims,  subject to final  court
approval, on behalf of the Partnership and all limited partners who own units as
of November 3, 1999.  Preliminary  approval of the  settlement  was  obtained on
November 3, 1999 from the Superior Court of the State of  California,  County of
San Mateo, at which time the Court set a final approval hearing for December 10,
1999.  Prior to the  December  10,  1999  hearing  the  Court  received  various
objections to the settlement,  including a challenge to the Court's  preliminary
approval based upon the alleged lack of authority of class  plaintiffs'  counsel
to enter the settlement. On December 14, 1999, the Corporate General Partner and
its affiliates terminated the proposed settlement. Certain plaintiffs have filed
a motion to  disqualify  some of the  plaintiffs'  counsel  in the  action.  The
Corporate  General Partner does not anticipate  that costs  associated with this
case will be material to the Partnership's overall operations.

ITEM 6.     EXHIBITS AND REPORTS ON FORM 8-K

            a)    Exhibits:

                  Exhibit 27, Financial Data Schedule, is filed as an exhibit to
                  this report.

            b)    Reports on Form 8-K:

                  None filed during the quarter ended March 31, 2000.


<PAGE>


                                   SIGNATURES

In accordance with the  requirements of the Exchange Act, the registrant  caused
this  report to be  signed on its  behalf  by the  undersigned,  thereunto  duly
authorized.

                                 SHELTER PROPERTIES VII LIMITED PARTNERSHIP

                                 By:     Shelter Realty VII Corporation
                                         Corporate General Partner

                                 By:     /s/Patrick J. Foye
                                         Patrick J. Foye
                                         Executive Vice President

                                 By:     /s/Martha L. Long
                                         Martha L. Long
                                         Senior Vice President
                                         and Controller

                                Date: May 4, 2000