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, 2001


[ ] 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, 2001

<TABLE>
<CAPTION>


Assets
<S>                                                            <C>           <C>
   Cash and cash equivalents                                                 $   307
   Receivables and deposits                                                      146
   Restricted escrows                                                             78
   Other assets                                                                  224
   Investment properties:
      Land                                                    $  1,774
      Buildings and related personal property                   21,963
                                                                23,737
      Less accumulated depreciation                            (12,594)       11,143
                                                                             $11,898

Liabilities and Partners' (Deficit) Capital
Liabilities
   Accounts payable                                                          $    33
   Tenant security deposit liabilities                                            98
   Accrued property taxes                                                        132
   Other liabilities                                                             149
   Due to affiliates                                                             152
   Mortgage notes payable                                                     10,455

Partners' (Deficit) Capital
   General partners                                            $ (141)
   Limited partners (17,343 units issued and
      outstanding)                                               1,020           879
                                                                            $ 11,898


            See Accompanying Notes to Consolidated Financial Statements
</TABLE>

<PAGE>




b)

                     SHELTER PROPERTIES VII LIMITED PARTNERSHIP
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)
                          (in thousands, except unit data)



                                                              Three Months Ended
                                                                   March 31,
                                                               2001        2000
Revenues:
   Rental income                                               $ 967       $ 957
   Other income                                                   86          45
   Casualty gain (Note E)                                         18          --
      Total revenues                                           1,071       1,002

Expenses:
   Operating                                                     433         398
   General and administrative                                     48          37
   Depreciation                                                  217         208
   Interest                                                      214         201
   Property taxes                                                 86          76
      Total expenses                                             998         920

Net income                                                     $  73       $  82

Net income allocated to general partners (1%)                  $   1       $   1
Net income allocated to limited partners (99%)                    72          81

                                                               $  73       $  82
Net income per limited partnership unit                        $4.15       $4.67

Distributions per limited partnership unit                     $4.90       $  --


            See Accompanying Notes to Consolidated Financial Statements

<PAGE>


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, 2000                    17,343       $ (141)      $ 1,033     $ 892

Distributions to partners                  --             (1)         (85)       (86)

Net income for the three months
   ended March 31, 2001                     --             1           72         73

Partners' (deficit) capital at
   March 31, 2001                       17,343       $ (141)      $ 1,020     $ 879


            See Accompanying Notes to Consolidated Financial Statements
</TABLE>

<PAGE>


d)

                     SHELTER PROPERTIES VII LIMITED PARTNERSHIP
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
                                   (in thousands)
<TABLE>
<CAPTION>

                                                                 Three Months Ended
                                                                       March 31,
                                                                  2001        2000
Cash flows from operating activities:
<S>                                                           <C>          <C>
   Net income                                                 $    73      $    82
   Adjustments to reconcile net income to net
     cash provided by operating activities:
        Depreciation                                              217          208
        Amortization of discounts and loan costs                   11           11
        Casualty gain                                             (18)          --
        Change in accounts:
            Receivables and deposits                               56         (115)
            Other assets                                          (88)         (34)
            Accounts payable                                      (43)          20
            Tenant security deposit liabilities                     6            5
            Accrued property taxes                                (94)          34
            Other liabilities                                       9          (35)
            Due to affiliates                                       2           --

               Net cash provided by operating activities          131          176

Cash flows from investing activities:
   Property improvements and replacements                        (173)        (121)
   Insurance proceeds                                              18           --

               Net cash used in investing activities             (155)        (121)

Cash flows from financing activities:
   Payments on mortgage notes payable                             (45)         (56)
   Advance from affiliate                                         150           --
   Loan costs                                                     (32)          --
   Distributions to partners                                      (86)          --

               Net cash used in financing activities              (13)         (56)

Net decrease in cash and cash equivalents                         (37)          (1)
Cash and cash equivalents at beginning of period                  344          474
Cash and cash equivalents at end of period                    $   307      $   473

Supplemental disclosure of cash flow information:
   Cash paid for interest                                     $   164      $   205



Included in property  improvements  and  replacements for the three months ended
March 31, 2001 are approximately  $60,000 of improvements which were included in
accounts payable at December 31, 2000.


            See Accompanying Notes to Consolidated Financial Statements
</TABLE>

<PAGE>




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,  2001,  are not
necessarily  indicative  of the results that may be expected for the fiscal year
ending  December 31, 2001. 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,  2000.  Shelter  Realty
Corporation  is the Corporate  General  Partner and is a subsidiary of Apartment
Investment and Management Company ("AIMCO").

Principles of Consolidation

The Registrant's financial statements include all the accounts of the Registrant
and its 99.9% owned partnership. The Corporate General Partner may be removed by
the  Registrant;  therefore,  the  consolidated  partnership  is controlled  and
consolidated by the Registrant.  All significant  interpartnership  transactions
have been eliminated.

Segment Reporting

Statement of Financial  Accounting Standards ("SFAS") No. 131, "Disclosure about
Segments of an Enterprise and Related Information" established standards for the
way that public business enterprises report information about operating segments
in annual  financial  statements  and  requires  that those  enterprises  report
selected  information about operating segments in interim financial reports.  It
also establishes  standards for related disclosures about products and services,
geographic  areas, and major customers.  As defined in SFAS 131, the Partnership
has only one reportable  segment.  The Corporate  General Partner  believes that
segment based disclosures will not result in a more meaningful presentation than
the consolidated financial statements as currently presented.


<PAGE>




Note B - 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.

<TABLE>
<CAPTION>

                                                            Three Months Ended
                                                                March 31,
                                                           2001             2000
                                                              (in thousands)
<S>                                                       <C>                <C>
Net cash provided by operating activities                 $  131             $ 176
   Payments on mortgage notes payable                        (45)              (56)
   Property improvements and replacements                   (173)             (121)
   Changes in reserves for net operating
      liabilities                                            152               125
   Additional reserves                                       (65)             (124)

      Net cash used in operations                          $  --             $  --
</TABLE>

The Corporate  General  Partner  reserved an additional  $65,000 and $124,000 at
March 31, 2001 and 2000, respectively,  to fund capital improvements and repairs
at the Partnership's two investment properties.

Note C - 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, 2001 and 2000:

                                                          2001       2000
                                                          (in thousands)

Property management fees (included in
  operating expenses)                                     $ 53       $ 52
Reimbursements for services of affiliates
  (included in general and administrative
  and operating expenses)                                   32         22
Due to affiliates                                          152         --

Affiliates of the Corporate  General Partner are 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
$53,000  and  $52,000  for the  three  months  ended  March  31,  2001 and 2000,
respectively.

An  affiliate  of the  Corporate  General  Partner  received  reimbursements  of
accountable  administrative  expenses  amounting  to  approximately  $32,000 and
$22,000 for the three months ended March 31, 2001 and 2000, respectively.

During the three  months ended March 31,  2001,  an  affiliate of the  Corporate
General  Partner  advanced  $150,000 to Hickory Ridge  Apartments.  This advance
bears  interest at the prime rate plus 2%. At March 31,  2001,  the  Partnership
owed such affiliate approximately $152,000, including accrued interest.

In addition to its  indirect  ownership of the general  partner  interest in the
Partnership,  AIMCO and its affiliates  owned 10,480 limited  partnership  units
(the "Units") in the Partnership representing 60.43% of the outstanding units at
March 31, 2001. 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,  which would include without  limitation,  voting on certain
amendments  to the  Partnership  Agreement  and voting to remove  the  Corporate
General  Partner.  As a result of its  ownership  of  60.43% 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 its affiliation with the Corporate General Partner.

Note D - Distributions

During the three months ended March 31, 2001, the Partnership  declared and paid
distributions from operations of approximately $86,000 (approximately $85,000 to
the limited  partners or $4.90 per limited  partnership  unit). No distributions
were made during the three months ended March 31, 2000.

Note E - Casualty Gain

During  the  three  months  ended  March  31,  2001,  a  net  casualty  gain  of
approximately  $18,000 was recognized at Hickory Ridge Apartments.  The casualty
gain related to a fire that damaged 5 apartment  units in May 2000. The gain was
a result of final  insurance  proceeds  of  approximately  $18,000  received  in
February  2001.  The  related  assets  were  written  off  during the year ended
December 31, 2000; therefore, the entire proceeds were recognized as a gain.

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,  its 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,  among other things,  the  acquisition of interests in
certain general partner entities by Insignia Financial Group, Inc.  ("Insignia")
and entities which were, at one time, affiliates of Insignia; past tender offers
by the Insignia affiliates to acquire limited  partnership units;  management of
the  partnerships  by the  Insignia  affiliates;  and the Insignia  Merger.  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 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 court approval, on behalf of the Partnership and all
limited partners who owned units as of November 3, 1999. Preliminary approval of
the  settlement  was obtained on November 3, 1999 from the Court,  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 prior lead counsel to enter the settlement.  On
December 14, 1999, the Corporate  General Partner and its affiliates  terminated
the  proposed  settlement.  In  February  2000,  counsel  for some of the  named
plaintiffs filed a motion to disqualify plaintiff's lead and liaison counsel who
negotiated  the  settlement.  On June  27,  2000,  the  Court  entered  an order
disqualifying  them  from the case and an  appeal  was  taken  from the order on
October 5, 2000. On December 4, 2000, the Court  appointed the law firm of Lieff
Cabraser  Heimann & Bernstein  LLP as new lead  counsel for  plaintiffs  and the
putative class.  Plaintiffs filed a third amended complaint on January 19, 2001.
On March 2, 2001,  the  Corporate  General  Partner and its  affiliates  filed a
demurrer to the third amended  complaint.  The demurrer is scheduled to be heard
on May 14,  2001.  The Court has also  scheduled a hearing on a motion for class
certification  for August 27, 2001.  Plaintiffs must file their motion for class
certification  no later than June 15, 2001. 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.


<PAGE>




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, 2001 and 2000:

                                                             Average
                                                            Occupancy
Property                                                2001          2000

Hickory Ridge Apartments (1)                            90%           95%
  Memphis, Tennessee
Governor's Park Apartments                              93%           92%
  Ft. Collins, Colorado

(1)   The  Corporate  General  Partner  attributes  the decrease in occupancy to
      increased competition in the local market.

Results of Operations

The  Partnership's net income for the three months ended March 31, 2001 and 2000
was approximately $73,000 and $82,000,  respectively. The decrease in net income
is due to an  increase  in total  revenues  which  was more  than  offset  by an
increase in total expenses.  Total revenues  increased due to increases in other
income and to a lesser extent rental income and a casualty gain. The increase in
other income is due to an increase in tenant and utility related  reimbursements
and fees.  The increase in rental  income is due primarily to an increase in the
average rental rates at both the Partnership's  investment  properties partially
offset by a decrease in occupancy at Hickory Ridge.

During  the  three  months  ended  March  31,  2001,  a  net  casualty  gain  of
approximately  $18,000 was recognized at Hickory Ridge Apartments.  The casualty
gain related to a fire that damaged 5 apartment  units in May 2000. The gain was
a result of final  insurance  proceeds  of  approximately  $18,000  received  in
February  2001.  The  related  assets  were  written  off  during the year ended
December 31, 2000; therefore, the entire proceeds were recognized as a gain.

Total  expenses  increased  during the  comparable  periods due to  increases in
operating,  general and administrative,  depreciation and property tax expenses.
The increase in operating expenses is due to increases in maintenance,  property
and advertising  expenses.  Maintenance  expense increased  primarily at Hickory
Ridge Apartments due to increases in contract labor.  Property expense increased
due to an increase in salary expenses at both of the  Partnership's  properties.
Advertising  expense  increased  primarily  at Hickory  Ridge as a result of the
property's  decrease in occupancy rate.  Depreciation  expense  increased due to
capital  improvements  and  replacements  placed in  service  during the past 12
months.  Property  tax  expense  increased  due to the timing of the  receipt of
property tax bills from the taxing authorities.

General and  administrative  expense increased due to an increase in the cost of
services  included in the  management  reimbursements  to the  Managing  General
Partner  as  allowed  under the  Partnership  Agreement.  In  addition  to these
reimbursements,  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  in  general  and
administrative expenses.

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, 2001, the Registrant had cash and cash equivalents of approximately
$307,000  compared to  approximately  $473,000 at March 31, 2000.  Cash and cash
equivalents decreased approximately $37,000 for the three months ended March 31,
2001 from the Partnership's  year end due to approximately  $155,000 and $13,000
of cash used in investing  and  financing  activities,  respectively,  which was
partially  offset  by  approximately  $131,000  of cash  provided  by  operating
activities.  Cash used in  financing  activities  consisted  primarily of a cash
distribution  to partners,  loan costs paid and  principal  payments made on the
mortgages  encumbering the Registrant's  properties offset by an advance from an
affiliate.  Cash used in investing activities consisted of property improvements
and replacements  partially offset by insurance proceeds due to a casualty.  The
Registrant invests its working capital reserves in interest bearing accounts.

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  $169,000
for the year 2001 for capital improvements and enhancements consisting primarily
of perimeter  fencing,  new appliances and air  conditioning  replacements.  The
Partnership completed  approximately $103,000 in capital expenditures at Hickory
Ridge  Apartments  during the three  months  ended  March 31,  2001,  consisting
primarily  of the  aforementioned  improvements  and  reconstruction  from  fire
damage.  These  improvements were funded primarily from operations and insurance
proceeds.

Governor's Park Apartments:  The Partnership has budgeted  approximately $52,000
for the year  2001  for  capital  improvements,  consisting  primarily  of floor
covering and appliance  replacements.  The Partnership  completed  approximately
$10,000 in capital  expenditures at Governor's Park Apartments  during the three
months  ending  March  31,  2001,  consisting  primarily  of the  aforementioned
improvements.  These  improvements  were funded  primarily  from  operations and
replacement reserves.

The  additional  capital  improvements  planned  for  2001 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  Partnership.  The mortgage
indebtedness of approximately  $10,455,000,  net of discount,  is amortized over
varying periods with balloon payments due at maturity, March 1, 2001 and October
15, 2003. In February 2001, the Partnership paid approximately $32,000 to extend
the  balloon  payment on the  mortgage  encumbering  Hickory  Ridge  Apartments,
originally due March 1, 2001, to August 1, 2001. The Corporate  General  Partner
will attempt to refinance such remaining indebtedness and/or sell the properties
prior to such maturity dates. If the properties cannot be refinanced or sold for
a sufficient  amount,  the  Registrant may risk losing such  properties  through
foreclosure.  During the three  months  ended March 31,  2001,  the  Partnership
recognized  approximately  $648,000 in total revenues and approximately $644,000
in total expenses at Hickory Ridge Apartments.

During the three months ended March 31, 2001, the Partnership  declared and paid
distributions from operations of approximately $86,000 (approximately $85,000 to
the limited  partners or $4.90 per limited  partnership  unit). No distributions
were  made  during  the  three  months   ended  March  31,  2000.   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  that  the
Registrant will generate sufficient funds from operations after required capital
expenditures to permit any additional  distributions  to its partners in 2001 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 a minimum of
$200 and a maximum of $400 per apartment  unit or $37,600 to $75,200 in total at
Governor's Park. The reserve account is currently fully funded.

In addition to its  indirect  ownership of the general  partner  interest in the
Partnership,  AIMCO and its affiliates  owned 10,480 limited  partnership  units
(the "Units") in the Partnership representing 60.43% of the outstanding units at
March 31, 2001. 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,  which would include without  limitation,  voting on certain
amendments  to the  Partnership  Agreement  and voting to remove  the  Corporate
General  Partner.  As a result of its  ownership  of  60.43% 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 its affiliation with the Corporate General Partner.


<PAGE>


                           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,  its 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,  among other things,  the  acquisition of interests in
certain general partner entities by Insignia Financial Group, Inc.  ("Insignia")
and entities which were, at one time, affiliates of Insignia; past tender offers
by the Insignia affiliates to acquire limited  partnership units;  management of
the  partnerships  by the  Insignia  affiliates;  and the Insignia  Merger.  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 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 court approval, on behalf of the Partnership and all
limited partners who owned units as of November 3, 1999. Preliminary approval of
the  settlement  was obtained on November 3, 1999 from the Court,  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 prior lead counsel to enter the settlement.  On
December 14, 1999, the Corporate  General Partner and its affiliates  terminated
the  proposed  settlement.  In  February  2000,  counsel  for some of the  named
plaintiffs filed a motion to disqualify plaintiff's lead and liaison counsel who
negotiated  the  settlement.  On June  27,  2000,  the  Court  entered  an order
disqualifying  them  from the case and an  appeal  was  taken  from the order on
October 5, 2000. On December 4, 2000, the Court  appointed the law firm of Lieff
Cabraser  Heimann & Bernstein  LLP as new lead  counsel for  plaintiffs  and the
putative class.  Plaintiffs filed a third amended complaint on January 19, 2001.
On March 2, 2001,  the  Corporate  General  Partner and its  affiliates  filed a
demurrer to the third amended  complaint.  The demurrer is scheduled to be heard
on May 14,  2001.  The Court has also  scheduled a hearing on a motion for class
certification  for August 27, 2001.  Plaintiffs must file their motion for class
certification  no later than June 15, 2001. 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.



<PAGE>



ITEM 6.     EXHIBITS AND REPORTS ON FORM 8-K

            a)    Exhibits:

                  None.

            b)    Reports on Form 8-K:

                  None filed during the quarter ended March 31, 2001.


<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 11, 2001