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, 2002


[ ]   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___



<PAGE>



                         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, 2002
<TABLE>
<CAPTION>

Assets
<S>                                                                         <C>
   Cash and cash equivalents                                                $ 2,561
   Receivables and deposits                                                      23
   Other assets                                                                 310
   Investment property:
      Land                                                     $ 714
      Buildings and related personal property                   7,333
                                                                8,047
      Less accumulated depreciation                            (4,128)        3,919
                                                                            $ 6,813

Liabilities and Partners' Deficit
Liabilities
   Accounts payable                                                           $ 8
   Tenant security deposit liabilities                                           34
   Accrued property taxes                                                        64
   Other liabilities                                                            148
   Mortgage note payable                                                      6,990

Partners' Deficit
   General partners                                            $ (101)
   Limited partners (17,343 units issued and
      outstanding)                                               (330)         (431)
                                                                            $ 6,813

         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)

<TABLE>
<CAPTION>
                                                                 Three Months Ended
                                                                       March 31,
                                                                2002           2001
Revenues:                                                                   (Restated)
<S>                                                             <C>           <C>
  Rental income                                                 $ 381         $ 378
  Other income                                                      49            45
      Total revenues                                               430           423

Expenses:
  Operating                                                        126           110
  General and administrative                                        40            48
  Depreciation                                                      58            59
  Interest                                                         106            95
  Property taxes                                                    20            22
      Total expenses                                               350           334

Income before discontinued operations and extraordinary
  loss                                                              80            89
Loss from discontinued operations (Note E)                          --           (16)
Extraordinary loss on early extinguishment of debt                (241)           --

Net (loss) income                                              $ (161)         $ 73

Net (loss) income allocated to general partners (1%)            $ (2)          $ 1
Net (loss) income allocated to limited partners (99%)             (159)           72
                                                               $ (161)         $ 73

Per limited partnership unit:
  Income before discontinued operations and
    extraordinary loss                                         $ 4.55         $ 5.07
  Loss from discontinued operations                                 --         (0.92)
  Extraordinary loss                                            (13.72)           --
                                                               $ (9.17)       $ 4.15

Distributions per limited partnership unit                      $ --          $ 4.90

         See Accompanying Notes to Consolidated Financial Statements

</TABLE>

<PAGE>

c)

                  SHELTER PROPERTIES VII LIMITED PARTNERSHIP
            CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' DEFICIT
                                   (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 at
   December 31, 2001                    17,343        $ (99)      $ (171)     $ (270)

Net loss for the three months
   ended March 31, 2002                     --            (2)        (159)      (161)

Partners' deficit at
   March 31, 2002                       17,343        $ (101)     $ (330)     $ (431)

         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,
                                                                    2002         2001
Cash flows from operating activities:
<S>                                                                <C>           <C>
  Net (loss) income                                                $ (161)       $ 73
  Adjustments to reconcile net (loss) income to net
   cash provided by operating activities:
     Depreciation                                                       58          217
     Amortization of discounts and loan costs                            5           11
     Extraordinary loss on early extinguishment of debt                241           --
     Casualty gain                                                      --          (18)
     Change in accounts:
      Receivables and deposits                                          64           56
      Other assets                                                     (25)         (88)
      Accounts payable                                                 (11)         (43)
      Tenant security deposit liabilities                               (1)           6
      Accrued property taxes                                           (41)         (94)
      Other liabilities                                                 17            9
      Due to affiliates                                                 --            2
         Net cash provided by operating activities                     146          131

Cash flows from investing activities:
   Property improvements and replacements                              (18)        (173)
   Net withdrawals from restricted escrows                              76           --
   Net insurance proceeds                                               --           18
         Net cash provided by (used in) investing activities            58         (155)

Cash flows from financing activities:
   Repayment of mortgage notes payable                              (4,381)          --
   Advance from affiliate                                               --          150
   Proceeds from mortgage note payable                               6,990           --
   Payments on mortgage notes payable                                   (7)         (45)
   Loan costs paid                                                    (278)         (32)
   Debt extinguishment costs                                          (179)          --
   Distributions to partners                                            --          (86)
         Net cash provided by (used in) financing activities         2,145          (13)

Net increase (decrease) in cash and cash equivalents                 2,349          (37)
Cash and cash equivalents at beginning of period                       212          344
Cash and cash equivalents at end of period                         $ 2,561       $ 307

Supplemental disclosure of cash flow information:
   Cash paid for interest                                           $ 87         $ 164

         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,  2002,  are not
necessarily  indicative  of the results that may be expected for the fiscal year
ending  December 31, 2002. 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,  2001.  The  Corporate
General Partner is a subsidiary of Apartment  Investment and Management  Company
("AIMCO"), a publicly traded real estate investment trust.

Effective  January 1, 2002,  the  Partnership  adopted  Statement  of  Financial
Accounting  Standards  No. 144,  "Accounting  for the  Impairment or Disposal of
Long-Lived Assets", which established standards for the way that public business
enterprises  report  information  about long-lived  assets that are either being
held for sale or have  already  been  disposed  of by sale or other  means.  The
standard  requires  that results of  operations  for a long-lived  asset that is
being  held  for  sale  or  has  already  been  disposed  of  be  reported  as a
discontinued  operation  on  the  statement  of  operations.  As a  result,  the
accompanying  consolidated  statements  of  operations  have been restated as of
January  1,  2001 to  reflect  the  operations  of  Hickory  Ridge as loss  from
discontinued operations.

Note B - Reconciliation of Cash Flows

The  following  is  a  reconciliation   of  the  subtotal  in  the  accompanying
consolidated  statements of cash flows captioned "net cash provided by operating
activities"  to "net  cash  from  operations",  as  defined  in the  Partnership
Agreement.  However,  "net cash from  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,
                                                           2002        2001
                                                            (in thousands)
Net cash provided by operating activities                 $ 146       $ 131
  Payments on mortgage notes payable                          (7)       (45)
  Property improvements and replacements                     (18)      (173)
  Changes in restricted escrows                               76         --
  Changes in reserves for net operating
    liabilities                                                3        152
  Additional reserves                                       (200)       (65)

      Net cash used in operations                          $ --        $ --

The Corporate  General  Partner  reserved an additional  $200,000 and $65,000 at
March 31, 2002 and 2001, respectively,  to fund capital improvements and repairs
at the Partnership's investment property.

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.

Affiliates of the Corporate  General Partner are entitled to receive 5% of gross
receipts from the  Registrant's  properties  for providing  property  management
services.  The  Registrant  paid to such  affiliates  approximately  $22,000 and
$53,000 for the three months ended March 31, 2002 and 2001, respectively,  which
is included in operating expenses.

An  affiliate  of the  Corporate  General  Partner  received  reimbursements  of
accountable  administrative  expenses  amounting  to  approximately  $30,000 and
$32,000 for the three months ended March 31, 2002 and 2001, respectively,  which
is included in general and administrative expenses.

Beginning in 2001,  the  Partnership  began  insuring its property up to certain
limits through coverage provided by AIMCO which is generally  self-insured for a
portion of losses and  liabilities  related  to workers  compensation,  property
casualty and vehicle liability.  The Partnership  insures its property above the
AIMCO  limits  through  insurance  policies  obtained  by  AIMCO  from  insurers
unaffiliated with the Corporate  General Partner.  During the three months ended
March 31, 2002 and 2001, the Partnership was charged by AIMCO and its affiliates
approximately $17,000 and $50,000, respectively, for insurance coverage and fees
associated with policy claims administration.

Note D - Refinancing of Mortgage Note Payable

On  February  8, 2002,  the  Partnership  refinanced  the  mortgage  encumbering
Governor's  Park. The refinancing  replaced the first mortgage of  approximately
$4,234,000 and the second mortgage of approximately $147,000 with a new mortgage
balance of $6,990,000.  The new mortgage carries a stated interest rate of 7.12%
compared to the 7.83% interest rate on the old mortgages. Principal and interest
payments on the mortgage of approximately $55,000 are due monthly until the loan
matures in March of 2022 at which time the loan will be fully  amortized.  Total
capitalized loan costs were approximately  $278,000.  The Partnership recognized
an  extraordinary  loss on the  early  extinguishment  of debt of  approximately
$241,000 due to the  write-off of  unamortized  loan costs and debt discount and
prepayment penalties.

Note E - Sale of Discontinued Operations

On July 16, 2001, the Partnership  sold Hickory Ridge Apartments to an unrelated
third  party for net  proceeds of  approximately  $11,333,000  after  payment of
closing costs. The Partnership realized a gain of approximately  $4,173,000 as a
result of the sale. The  Partnership  used  approximately  $5,990,000 of the net
proceeds to repay the  mortgage  encumbering  the  property.  In  addition,  the
Partnership  recorded an extraordinary  loss on early  extinguishment of debt of
approximately $7,000 as a result of unamortized loan costs being written off. As
a result of the sale,  the  operations  of the property are being shown as "Loss
from  discontinued  operations"  for the three  months  ended  March  31,  2001.
Included in this amount is  approximately  $648,000 of revenue  generated by the
property.

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. (the "Nuanes action") 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  Corporate  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 series of  transactions  which  closed on
October 1, 1998 and February 26, 1999 whereby  Insignia and Insignia  Properties
Trust,  respectively,  were merged  into AIMCO.  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.  On May 14, 2001,  the Court heard the
demurrer to the third amended  complaint.  On July 10, 2001, the Court issued an
order  sustaining  defendants'  demurrer on certain  grounds.  On July 20, 2001,
Plaintiffs filed a motion for reconsideration of the Court's July 10, 2001 order
granting in part and denying in part defendants' demurrer. On September 7, 2001,
Plaintiffs  filed a fourth amended class and  derivative  action  complaint.  On
September 12, 2001, the Court denied Plaintiffs' motion for reconsideration.  On
October 5, 2001, the Corporate General Partner and affiliated defendants filed a
demurrer to the fourth amended complaint,  which was heard on December 11, 2001.
On February 2, 2002,  the Court served its order  granting in part the demurrer.
The  Court has  dismissed  without  leave to amend  certain  of the  plaintiffs'
claims.  On February 11, 2002,  plaintiffs  filed a motion  seeking to certify a
putative  class  comprised of all  non-affiliated  persons who own or have owned
units  in  the  partnerships.  The  Corporate  General  Partner  and  affiliated
defendants oppose the motion. On April 29, 2002, the Court heard argument on the
motion and ordered  further  briefing  after which time the matter will be taken
under submission. The Court has set the matter for trial in January 2003.
Note F - Legal Proceedings (continued)

During the third  quarter of 2001, a complaint  (the "Heller  action") was filed
against  the same  defendants  that are named in the  Nuanes  action,  captioned
Heller v. Insignia Financial Group. On or about August 6, 2001, plaintiffs filed
a first amended  complaint.  The first amended complaint in the Heller action is
brought as a purported  derivative  action,  and asserts  claims for among other
things  breach  of  fiduciary  duty;  unfair  competition;   conversion,  unjust
enrichment;  and judicial  dissolution.  Plaintiffs in the Nuanes action filed a
motion to  consolidate  the Heller action with the Nuanes action and stated that
the Heller action was filed in order to preserve the derivative claims that were
dismissed  without  leave to amend in the Nuanes action by the Court order dated
July 10, 2001. On October 5, 2001, the Corporate  General Partner and affiliated
defendants  moved to strike the first  amended  complaint  in its  entirety  for
violating  the Court's July 10, 2001 order  granting in part and denying in part
defendants'  demurrer in the Nuanes action, or alternatively,  to strike certain
portions of the complaint based on the statute of limitations.  Other defendants
in the action  demurred to the fourth  amended  complaint,  and,  alternatively,
moved to strike the complaint. On December 11, 2001, the court heard argument on
the motions  and took the matters  under  submission.  On February 4, 2002,  the
Court  served  notice of its order  granting  defendants'  motion to strike  the
Heller complaint as a violation of its July 10, 2001 order in the Nuanes action.
On March 27, 2002,  the plaintiffs  filed a notice  appealing the order striking
the complaint.

The Corporate General Partner does not anticipate that any costs,  whether legal
or  settlement  costs,  associated  with  these  cases 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  property consists of one apartment  complex.  The
following  table sets forth the average  occupancy of the property for the three
months ended March 31, 2002 and 2001:

                                                             Average
                                                            Occupancy
Property                                                2002          2001

Governor's Park Apartments                              91%           93%
  Ft. Collins, Colorado

Results of Operations

The  Partnership's  net loss for the  three  months  ended  March  31,  2002 was
approximately  $161,000 compared to net income of approximately  $73,000 for the
corresponding  period  in  2001.  The  decrease  in  net  income  is  due to the
recognition of a loss on the early  extinguishment  of debt from the refinancing
of the mortgage  encumbering  Governor's  Park Apartments in 2002 and due to the
sale of Hickory Ridge  Apartments on July 16, 2001.  Effective  January 1, 2002,
the Partnership  adopted  Statement of Financial  Accounting  Standards No. 144,
"Accounting  for  the  Impairment  or  Disposal  of  Long-Lived  Assets",  which
established  standards  for the way  that  public  business  enterprises  report
information  about long-lived assets that are either being held for sale or have
already been  disposed of by sale or other means.  The  standard  requires  that
results of operations for a long-lived  asset that is being held for sale or has
already  been  disposed  of be  reported  as a  discontinued  operation  on  the
statement of operations.  As a result, the accompanying  consolidated statements
of operations have been restated as of January 1, 2001 to reflect the operations
of Hickory Ridge as loss from discontinued operations.

Excluding  the loss on the  early  extinguishment  of debt and the  discontinued
operations  the income for the three  months  ended  March 31, 2002 and 2001 was
approximately $80,000 and $89,000,  respectively.  The decrease in income is due
to an increase in total expenses.  Total revenue  remained  relatively  constant
during the period.  Total expenses  increased due to an increase in interest and
operating  expenses.  Interest  expense  increased due to the refinancing of the
mortgage  encumbering  Governor's Park Apartments.  Operating expenses increased
due to an increase in legal fees.

Included in general and administrative  expense for the three months ended March
31, 2002 and 2001 are management reimbursements to the Corporate General Partner
as allowed under the Partnership  Agreement.  In addition,  cost associated with
the quarterly and annual  communications  with investors and regulatory agencies
and the annual audit 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 its  investment  property 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, 2002, the Registrant had cash and cash equivalents of approximately
$2,561,000  compared to approximately  $307,000 at March 31, 2001. Cash and cash
equivalents increased approximately  $2,349,000 for the three months ended March
31,  2002  from  the  Partnership's  year end due to  approximately  $2,145,000,
$146,000 and $58,000 of cash  provided by  financing,  operating  and  investing
activities,  respectively.  Cash  provided  by  financing  activities  consisted
primarily of proceeds from  refinancing of Governor's Park Apartments  offset by
the repayment of the mortgage notes encumbering Governor's Park Apartments,  the
payment of debt  extinguishment  and loan costs,  and principal  payments on the
mortgage  encumbering  Governor's  Park  Apartments.  Cash provided by investing
activities  consisted  of net  withdrawals  from  restricted  escrows  offset by
property  improvements  and  replacements.  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 the property to adequately maintain the physical assets
and other operating  needs of the Registrant and to comply with Federal,  state,
and local legal and regulatory  requirements.  Capital  improvements planned for
the Registrant's property are detailed below.

Governor's Park Apartments:  The Partnership has budgeted  approximately $66,000
for the year 2002 for capital improvements, consisting primarily of parking area
improvements  and floor  covering and appliance  replacements.  The  Partnership
completed  approximately  $18,000 in capital  expenditures  at  Governor's  Park
Apartments during the three months ending March 31, 2002,  consisting  primarily
of floor covering and appliance  replacements.  These  improvements  were funded
primarily from operations and replacement reserves.

The  additional  capital  improvements  planned  for  2002 at the  Partnership's
property  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  $6,990,000  is  amortized  over 240  months and
matures on March 15, 2022 at which time it will be fully amortized.

The Partnership  distributed the following amounts during the three months ended
March 31, 2002 and 2001 (in thousands, except per unit data):

                                   Per Limited                       Per Limited
               Three Months Ended  Partnership   Three Months Ended  Partnership
                 March 31, 2002        Unit        March 31, 2001        Unit

Operations            $ --             $ --             $ 86            $ 4.90

Subsequent to March 31, 2002, the  Partnership  declared and paid a distribution
to the limited  partners of  approximately  $2,080,000.  Of this,  approximately
$1,442,000  (or $83.15 per limited  partnership  unit) was from the  refinancing
proceeds of Governor's  Park and  approximately  $638,000 (or $36.79 per limited
partnership  unit) was from  additional  sales  proceeds of Hickory  Ridge.  The
Partnership's  cash available for  distribution  is reviewed on a monthly basis.
Future cash  distributions  will depend on the levels of net cash generated from
operations,  the  availability  of cash  reserves,  and the  timing  of the debt
maturity,  refinancing  and/or property sale. There can be no assurance that the
Registrant will generate sufficient funds from operations after required capital
expenditures to permit any  distributions  to its partners in 2002 or subsequent
periods.

In addition to its  indirect  ownership of the general  partner  interest in the
Partnership,  AIMCO and its affiliates  owned 10,554 limited  partnership  units
(the "Units") in the Partnership representing 60.86% of the outstanding units at
March 31, 2002. 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  voting on certain  amendments  to the
Partnership  Agreement and voting to remove the Corporate General Partner.  As a
result  of its  ownership  of  60.86% of the  outstanding  units,  AIMCO is in a
position to control all such 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. (the "Nuanes action") 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  Corporate  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 series of  transactions  which  closed on
October 1, 1998 and February 26, 1999 whereby  Insignia and Insignia  Properties
Trust,  respectively,  were merged  into AIMCO.  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.  On May 14, 2001,  the Court heard the
demurrer to the third amended  complaint.  On July 10, 2001, the Court issued an
order  sustaining  defendants'  demurrer on certain  grounds.  On July 20, 2001,
Plaintiffs filed a motion for reconsideration of the Court's July 10, 2001 order
granting in part and denying in part defendants' demurrer. On September 7, 2001,
Plaintiffs  filed a fourth amended class and  derivative  action  complaint.  On
September 12, 2001, the Court denied Plaintiffs' motion for reconsideration.  On
October 5, 2001, the Corporate General Partner and affiliated defendants filed a
demurrer to the fourth amended complaint,  which was heard on December 11, 2001.
On February 2, 2002,  the Court served its order  granting in part the demurrer.
The  Court has  dismissed  without  leave to amend  certain  of the  plaintiffs'
claims.  On February 11, 2002,  plaintiffs  filed a motion  seeking to certify a
putative  class  comprised of all  non-affiliated  persons who own or have owned
units  in  the  partnerships.   The  Managing  General  Partner  and  affiliated
defendants oppose the motion. On April 29, 2002, the Court heard argument on the
motion and ordered  further  briefing  after which time the matter will be taken
under submission. The Court has set the matter for trial in January 2003.

During the third  quarter of 2001, a complaint  (the "Heller  action") was filed
against  the same  defendants  that are named in the  Nuanes  action,  captioned
Heller v. Insignia Financial Group. On or about August 6, 2001, plaintiffs filed
a first amended  complaint.  The first amended complaint in the Heller action is
brought as a purported  derivative  action,  and asserts  claims for among other
things  breach  of  fiduciary  duty;  unfair  competition;   conversion,  unjust
enrichment;  and judicial  dissolution.  Plaintiffs in the Nuanes action filed a
motion to  consolidate  the Heller action with the Nuanes action and stated that
the Heller action was filed in order to preserve the derivative claims that were
dismissed  without  leave to amend in the Nuanes action by the Court order dated
July 10, 2001. On October 5, 2001, the Corporate  General Partner and affiliated
defendants  moved to strike the first  amended  complaint  in its  entirety  for
violating  the Court's July 10, 2001 order  granting in part and denying in part
defendants'  demurrer in the Nuanes action, or alternatively,  to strike certain
portions of the complaint based on the statute of limitations.  Other defendants
in the action  demurred to the fourth  amended  complaint,  and,  alternatively,
moved to strike the complaint. On December 11, 2001, the court heard argument on
the motions  and took the matters  under  submission.  On February 4, 2002,  the
Court  served  notice of its order  granting  defendants'  motion to strike  the
Heller complaint as a violation of its July 10, 2001 order in the Nuanes action.
On March 27, 2002,  the plaintiffs  filed a notice  appealing the order striking
the complaint.

The Corporate General Partner does not anticipate that any costs,  whether legal
or  settlement  costs,  associated  with  these  cases will be  material  to the
Partnership's overall operations.

ITEM 2.     EXHIBITS AND REPORTS ON FORM 8-K

            a)    Exhibits:

                  None.

            b)    Reports on Form 8-K:

                  None filed during the quarter ended March 31, 2002.


<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: