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 June 30, 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 unit data)

                                  June 30, 2001


<TABLE>
<CAPTION>

Assets
<S>                                                           <C>            <C>
   Cash and cash equivalents                                                 $   275
   Receivables and deposits                                                      210
   Restricted escrows                                                             79
   Other assets                                                                  152
   Investment properties:
      Land                                                    $  1,774
      Buildings and related personal property                   22,018
                                                                23,792
      Less accumulated depreciation                            (12,813)       10,979
                                                                            $ 11,695

Liabilities and Partners' (Deficit) Capital
Liabilities
   Accounts payable                                                         $     52
   Tenant security deposit liabilities                                            98
   Accrued property taxes                                                        181
   Other liabilities                                                             146
   Mortgage notes payable                                                     10,398

Partners' (Deficit) Capital
   General partners                                            $  (141)
   Limited partners (17,343 units issued and
      outstanding)                                                 961           820
                                                                            $ 11,695


            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            Six Months Ended
                                           June 30,                     June 30,
                                     2001           2000           2001          2000
Revenues:
<S>                                  <C>           <C>            <C>           <C>
   Rental income                     $  949        $  908         $1,916        $1,865
   Other income                          71            67            157           112
   Casualty gain                         --            --             18            --
       Total revenues                 1,020           975          2,091         1,977

Expenses:
   Operating                            398           352            831           750
   General and administrative            62            42            110            79
   Depreciation                         219           213            436           421
   Interest                             225           215            439           416
   Property taxes                        95            85            181           161
       Total expenses                   999           907          1,997         1,827

   Net income                        $   21        $   68         $   94        $  150

Net income allocated
   to general partners (1%)          $   --        $    1         $    1        $    2
Net income allocated
   to limited partners (99%)             21            67             93           148

                                     $   21        $   68         $   94        $  150
Net income per limited
   partnership unit                  $ 1.21        $ 3.86         $ 5.36        $ 8.53

Distributions per limited
   partnership unit                  $ 4.61        $11.42         $ 9.51        $11.42


            See Accompanying Notes to Consolidated Financial Statements
</TABLE>

<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)        (165)      (166)

Net income for the six months
   ended June 30, 2001                      --             1           93         94

Partners' (deficit) capital at
   June 30, 2001                        17,343       $ (141)       $ 961     $   820


            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>

                                                                  Six Months Ended
                                                                        June 30,
                                                                  2001        2000
Cash flows from operating activities:
<S>                                                           <C>          <C>
   Net income                                                 $    94      $   150
   Adjustments to reconcile net income to net
     cash provided by operating activities:
        Depreciation                                              436          421
        Amortization of discounts and loan costs                   34           22
        Casualty gain                                             (18)          --
        Change in accounts:
            Receivables and deposits                               (8)         (36)
            Other assets                                          (37)         (54)
            Accounts payable                                      (24)          32
            Tenant security deposit liabilities                     6            1
            Accrued property taxes                                (45)         (59)
            Other liabilities                                       6          (37)

               Net cash provided by operating activities          444          440

Cash flows from investing activities:
   Property improvements and replacements                        (228)        (286)
   Insurance proceeds received                                     18           --
   Net deposits to restricted escrows                              (1)         (30)

               Net cash used in investing activities             (211)        (316)

Cash flows from financing activities:
   Payments on mortgage notes payable                            (104)        (111)
   Distributions to partners                                     (166)        (200)
   Loan costs paid                                                (32)          --

               Net cash used in financing activities             (302)        (311)
Net decrease in cash and cash equivalents                         (69)        (187)
Cash and cash equivalents at beginning of period                  344          474
Cash and cash equivalents at end of period                    $   275      $   287

Supplemental disclosure of cash flow information:
   Cash paid for interest                                     $   367      $   409

Included in property improvements and replacements for the six months ended June
30,  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 and six month periods ended June 30, 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.
The  Corporate  General  Partner is a  subsidiary  of Apartment  Investment  and
Management Company ("AIMCO"), a publicly traded real estate investment trust.

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 partnership may be
removed by the Registrant;  therefore,  it 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 established  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>

                                                             Six Months Ended
                                                                 June 30,
                                                           2001             2000
                                                              (in thousands)
<S>                                                       <C>                <C>
Net cash provided by operating activities                 $  444             $ 440
   Payments on mortgage notes payable                       (104)             (111)
   Property improvements and replacements                   (228)             (286)
   Change in restricted escrows, net                          (1)              (30)
   Changes in reserves for net operating
      liabilities                                            102               153
   Additional reserves                                      (213)             (166)

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

The Corporate  General Partner  reserved an additional  $213,000 and $166,000 at
June 30, 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 six
months ended June 30, 2001 and 2000:

                                                          2001       2000
                                                          (in thousands)

Property management fees (included in
  operating expenses)                                     $107       $102
Reimbursements for services of affiliates
  (included in general and administrative
  and operating expenses)                                   74         41

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
$107,000  and  $102,000  for the six  months  ended  June  30,  2001  and  2000,
respectively.

An  affiliate  of the  Corporate  General  Partner  received  reimbursements  of
accountable  administrative  expenses  amounting  to  approximately  $74,000 and
$41,000 for the six months ended June 30, 2001 and 2000, respectively.

In addition to its  indirect  ownership of the general  partner  interest in the
Partnership,  AIMCO and its affiliates  owned 10,504 limited  partnership  units
(the "Units") in the Partnership representing 60.57% of the outstanding units at
June 30, 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  60.57% 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 six months ended June 30,  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).  The Partnership
also paid a  distribution  of  previously  undistributed  refinance  proceeds of
approximately  $80,000  ($4.61  per  limited  partnership  unit) to the  limited
partners during the six months ended June 30, 2001.  During the six months ended
June 30, 2000, the Partnership  declared and paid  distributions from operations
of  approximately  $200,000  (approximately  $198,000 to the limited partners or
$11.42 per limited partnership unit).

Note E - Casualty Gain

During the six months ended June 30, 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 - Subsequent Event

On July 16, 2001, the Partnership  sold Hickory Ridge Apartments to an unrelated
third party, for the net proceeds of approximately  $11,435,000 after payment of
closing costs. The Partnership realized a gain of approximately  $4,122,000 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 $8,000 as a result of unamortized loan costs being written off.

The following pro-forma  information  reflects the operations of the Partnership
as if Hickory  Ridge  Apartments  had been sold  January 1, 2000 (in  thousands,
except unit data).

                                                    June 30, 2001
     Assets
        Cash and cash equivalents                      $   101
        Other assets                                       153
        Fixed assets, net                                3,998
                                                       $ 4,252

     Liabilities and partners' deficit
        Liabilities                                    $   181
        Mortgage notes payable                           4,395
        Partners' deficit                                 (324)
                                                       $ 4,252


                                   Six Months Ended             Year Ended
                             June 30, 2001  June 30, 2000   December 31, 2000

  Revenues                       $  838         $  737            $1,566
  Total expenses                    694            672             1,455

  Net income                     $  144         $   65            $  111
  Net income per limited
    partnership unit             $ 8.25         $ 3.69            $ 6.34

Note G - Legal Proceedings

In March 1998, several putative  unitholders 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 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.  Plaintiffs have until
August  16,  2001 to file a fourth  amended  complaint.  The  Corporate  General
Partner does not anticipate that any costs,  whether legal or settlement  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 six
months ended June 30, 2001 and 2000:

                                                             Average
                                                            Occupancy
Property                                                2001          2000

Hickory Ridge Apartments                                91%           94%
  Memphis, Tennessee
Governor's Park Apartments                              92%           91%
  Ft. Collins, Colorado

The  decrease in  occupancy  at Hickory  Ridge  Apartments  is  attributable  to
increased competition in the local market.

Results of Operations

The  Partnership's  net income for the three and six months  ended June 30, 2001
was   approximately   $21,000  and   $94,000,   respectively,   as  compared  to
approximately $68,000 and $150,000,  respectively,  for the three and six months
ended June 30,  2000.  The  decrease in net income for both periods is due to an
increase in total expenses  partially  offset by an increase in total  revenues.
Total  expenses  increased  during the  comparable  periods due to  increases in
operating,  interest, property tax, and general and administrative expenses. The
increase in operating  expenses is due to increases in maintenance and insurance
expenses offset by a decrease in administrative  expenses.  Maintenance expenses
increased  at Hickory  Ridge  Apartments  due to  increases  in contract  labor.
Insurance expense  increased  primarily due to increased claims at Hickory Ridge
Apartments. Administrative expenses decreased primarily as a result of decreased
legal expenses at Hickory Ridge.  Interest expense  increased for the comparable
periods due to the  amortization of a maturity  extension fee paid to extend the
maturity of the mortgage  encumbering  Hickory  Ridge during 2001.  Property tax
expense  increased  due to the timing of the receipt of property  tax bills from
the taxing authorities.

General and administrative  expense increased for the three and six months ended
June  30,  2001  due to an  increase  in the cost of  services  included  in the
management  reimbursements to the Corporate 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.

Total  revenues  increased due to an increase in rental revenue and other income
and the  recognition  of a casualty  gain  during the six months  ended June 30,
2001.  Rental  income  increased  primarily  due to an increase in  occupancy at
Governor's  Park and increase of average  rental rates at both of the properties
offset by a decrease in occupancy at Hickory Ridge.  Other income  increased due
to an  increase  in  tenant  and  utility  related  reimbursements  and  fees at
Governor's Park.

During the six months ended June 30, 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.

On July 16, 2001, the Partnership  sold Hickory Ridge Apartments to an unrelated
third party,  for net proceeds of  approximately  $11,435,000  after  payment of
closing costs. The Partnership realized a gain of approximately  $4,122,000 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 $8,000 as a result of unamortized loan costs being written off.

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 June 30, 2001, the Registrant had cash and cash  equivalents of approximately
$275,000  compared to  approximately  $287,000 at June 30, 2000. The decrease in
cash and cash  equivalents of  approximately  $69,000 since December 31, 2000 is
due to  approximately  $211,000  and  $302,000  of cash  used in  investing  and
financing activities,  respectively,  partially offset by approximately $444,000
of cash  provided by operating  activities.  Cash used in  financing  activities
consisted  of  principal   payments  made  on  the  mortgages   encumbering  the
Registrant's properties, distributions to the partners and loan costs paid. Cash
used in investing activities consisted of property improvements and replacements
and net deposits to escrow accounts  maintained by the mortgage lender partially
offset by  insurance  proceeds  received.  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 completed  approximately  $140,000 in
capital  expenditures  at Hickory Ridge  Apartments  during the six months ended
June  30,  2001,   consisting   primarily  of  floor   covering  and   appliance
replacements,  fencing  improvements and reconstruction from fire damage.  These
improvements were funded primarily from operations and insurance  proceeds.  The
Partnership sold this property to an unaffiliated third party subsequent to June
30, 2001.

Governor's Park Apartments:  The Partnership has budgeted approximately $116,000
for the year 2001 for capital  improvements,  consisting primarily of structural
and parking lot enhancements and appliance and floor covering replacements.  The
Partnership   completed   approximately   $28,000  in  capital  expenditures  at
Governor's Park Apartments during the six months ended June 30, 2001, consisting
primarily of carpet and appliance  replacements.  These improvements were funded
primarily from operations and replacement reserves.

Additional capital improvements planned for 2001 at the Partnership's  remaining
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 Registrant. Governor's Park has
mortgage  indebtedness  of  approximately  $4,395,000,  net of  discount,  which
matures October 15, 2003 with a balloon payment of approximately  $4,230,000 due
at  that  time.   Hickory  Ridge   Apartments  has  mortgage   indebtedness   of
approximately  $6,003,000,  which matured on August 1, 2001.  Subsequent to June
30, 2001,  this  property was sold and the mortgage was repaid with a portion of
the sales proceeds.  The Corporate General Partner will attempt to refinance the
Governor's  Park  indebtedness  and/or sell the  property  prior to its maturity
date. If the property cannot be refinanced or sold for a sufficient  amount, the
Registrant will risk losing the property through foreclosure.

During the six months ended June 30,  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).  The Partnership
also paid a  distribution  of  previously  undistributed  refinance  proceeds of
approximately  $80,000  ($4.61  per  limited  partnership  unit) to the  limited
partners during the six months ended June 30, 2001.  During the six months ended
June 30, 2000, the Partnership  declared and paid  distributions from operations
of  approximately  $200,000  (approximately  $198,000 to the limited partners or
$11.42 per limited  partnership unit). The Registrant's  distribution  policy is
reviewed on a quarterly  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  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. As of June 30,
2001, the reserve account had a balance of approximately $78,000.

In addition to its  indirect  ownership of the general  partner  interest in the
Partnership,  AIMCO and its affiliates  owned 10,504 limited  partnership  units
(the "Units") in the Partnership representing 60.57% of the outstanding units at
June 30, 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  60.57% 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  unitholders 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 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.  Plaintiffs have until
August  16,  2001 to file a fourth  amended  complaint.  The  Corporate  General
Partner does not anticipate that any costs,  whether legal or settlement  costs,
associated  with  this  case  will  be  material  to the  Partnership's  overall
operations.


<PAGE>



ITEM 6.     EXHIBITS AND REPORTS ON FORM 8-K

            a)    Exhibits:

                  None.

            b)    Reports on Form 8-K:

                  On July 18, 2001,  the  Registrant  filed a report on Form 8-K
                  disclosing  the  sale  of  Hickory  Ridge   Apartments  to  an
                  unrelated third party.


<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:   August 9, 2001