SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                                    FORM 10-Q


(X)                   QUARTERLY REPORT PURSUANT TO SECTION 13
                  OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
                For the quarterly period ended September 30, 1996

                                       OR

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


Commission file number:  0-17695


                           HEALTHCARE PROPERTIES, L.P.
             (Exact name of Registrant as specified in its charter)


                      DELAWARE                        62-1317327
          (State or other jurisdiction of         (I.R.S. Employer
           incorporation or oganization)         Identification Number)


              14160 DALLAS PARKWAY, SUITE 300, DALLAS, TEXAS 75240
                     (Address of principal executive office)


                                 (972) 770-5600
              (Registrant's telephone number, including area code)


         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  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 at least the past 90 days. YES x NO ___


<PAGE>


                        See notes to financial statements
                                                   1
PART I.  FINANCIAL INFORMATION


Item 1.  Financial Statements

                           HEALTHCARE PROPERTIES, L.P.
                             (A Limited Partnership)

                                 BALANCE SHEETS

<TABLE>
<CAPTION>

                                                           September 30, 1996             December 31, 1995
                                                              (Unaudited)                     (Audited)
                                     ASSETS

<S>                                                       <C>                             <C>            
Cash and cash equivalents                                 $      8,966,688                $     7,606,857

Accounts receivable, less allowance
  for doubtful accounts of
  $4,200,344
  and $3,489,937                                                   571,429                        210,409

Prepaid Expenses and other                                         103,140                        129,714

Deferred charges, less accumulated
  amortization of $736,884 and
  $734,146                                                         528,470                        614,051

Property and improvements, net                                  22,451,669                     25,251,255
                                                          ----------------                ---------------

  Total assets                                            $     32,621,396                $    33,812,286
                                                          ================                ===============
</TABLE>



                       LIABILITIES AND PARTNERSHIP EQUITY
<TABLE>
<CAPTION>

Accounts payable and accrued
<S>                                                       <C>                             <C>            
  expenses                                                $      1,165,096                $     1,526,209

Operating facility accounts payable                                101,844                         83,194

Mortgage loans payable-in-default                                        0                      2,068,539

Mortgage loans payable                                           7,335,039                      7,707,062
                                                          ----------------                ---------------

   Total liabilities                                             8,601,979                     11,385,004

Partnership equity - 4,172,457 and
  4,172,457 Partnership units
  outstanding                                                   24,019,417                     22,427,282
                                                          ----------------                ---------------

   Total liabilities and equity                           $     32,621,396                $    33,812,286
                                                          ================                ===============
</TABLE>


<PAGE>


                       See notes to finanaical statements
                                                   5

                           HEALTHCARE PROPERTIES, L.P.
                             (A Limited Partnership)

                             STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>

                                                            Three months ended,          Three months ended,
                                                            September 30, 1996           September 30, 1995
                                                            ------------------           ------------------

Revenues:
<S>                                                           <C>                          <C>            
   Rental                                                     $     1,115,121              $     1,237,352
   Net patient services                                               936,423                      777,062
                                                              ---------------              ---------------
                                                                    2,051,544                    2,014,414
                                                              ---------------              ---------------


Expenses:
   Facility operating expenses                                        916,522                      867,094
   Depreciation                                                       342,901                      402,157
   Lease default expenses                                              45,869                      112,419
   Administrative and other                                           250,516                      129,746
   Bad debts                                                          294,898                      697,016
                                                              ---------------              ---------------
                                                                    1,850,706                    2,208,432
                                                              ---------------              ---------------
       Income from operations                                         200,838                     (194,018)
                                                              ---------------              ---------------


Other Income (expenses):
   Gain on sale                                                             0                      363,785
   Interest income                                                     59,526                       52,618
   Interest expenses                                                 (178,142)                    (267,539)
   Amortization                                                       (28,527)                     (38,572)
                                                              ---------------              ---------------
                                                                     (147,143)                     110,292
                                                              ---------------              ---------------

         Net Income (Loss) before extraordinary item                   53,695                      (83,726)

         Extraordinary item - gain on
            extinguishment of debt                                          0                    2,006,309
                                                              ---------------              ---------------

         Net Income                                           $        53,695              $     1,922,583
                                                              ===============              ===============

NET EARNINGS PER UNIT                                         $           .01              $           .45
                                                              ===============              ===============

WEIGHTED AVERAGE
   NUMBER OF UNITS                                                  4,172,457                    4,172,457
                                                              ===============              ===============
</TABLE>


<PAGE>



                           HEALTHCARE PROPERTIES, L.P.
                             (A Limited Partnership)

                             STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>

                                                           Nine Months ended             Nine months ended
                                                          September 30, 1996             September 30, 1995
                                                          ------------------             ------------------

Revenues:
<S>                                                        <C>                            <C>            
   Rental                                                  $     3,563,789                $     3,893,335
   Net patient services                                          1,722,662                      3,027,937
                                                           ---------------                ---------------
                                                                 5,286,451                      6,921,272
                                                           ---------------                ---------------


Expenses:
   Facility operating expenses                                   1,653,479                      2,870,603
   Depreciation                                                  1,076,809                      1,351,858
   Lease default expenses                                          104,084                        243,730
   Administrative and other                                        969,788                        857,971
   Bad debts                                                       710,407                      1,033,845
                                                           ---------------                ---------------
                                                                 4,514,567                      6,358,007
                                                           ---------------                ---------------
         Income from operations                                    771,884                        563,265
                                                           ---------------                ---------------


Other Income (expenses):
   Gain on sale                                                    637,528                        363,785
   Interest income                                                 174,067                        130,836
   Interest expenses                                              (608,455)                    (1,087,453)
   Amortization                                                    (85,581)                      (134,934)
                                                           ---------------                ---------------
                                                                   117,559                       (727,766)
                                                           ---------------                ---------------

         Net Income (Loss) before
            extraordinary item                                     889,443                       (164,501)

         Extraordinary item-gain on
            extinguishment of debt                                 702,692                      2,006,309
                                                           ---------------                ---------------

         Net Income                                        $     1,592,135                $     1,841,808
                                                           ===============                ===============

NET EARNINGS PER UNIT                                      $           .37                $           .43
                                                           ===============                ===============

WEIGHTED AVERAGE
   NUMBER OF UNITS                                               4,172,457                      4,172,457
                                                           ===============                ===============
</TABLE>











                           HEALTHCARE PROPERTIES, L.P.
                             (A Limited Partnership)

                   STATEMENTS OF PARTNERSHIP EQUITY (DEFICIT)

<TABLE>
<CAPTION>

                                                Limited                  General
                                                Partners                Partners                     Total
Allocation of Net Earnings
   (Loss)                                             98%                     2%                      100%
                                                      ===                     ==                      ====


EQUITY (DEFICIT) at
<S>         <C> <C>                         <C>                     <C>                      <C>           
   December 31, 1995                        $   22,449,617          $    (22,335)            $   22,427,282

Net Income                                          38,283                   781                     39,064
                                            --------------          ------------             --------------

EQUITY (DEFICIT) at
   March 31, 1996                               22,487,900               (21,554)                22,466,346

Net Income                                       1,469,388                29,988                  1,499,376
                                            --------------          ------------             --------------

EQUITY (DEFICIT) at
   June 30, 1996                                23,957,288                 8,434                 23,965,722

Net Income                                          52,621                 1,074                     53,695
                                            --------------          ------------             --------------

EQUITY at
   September 30, 1996                       $   24,009,909          $      9,508             $   24,019,417
                                            ==============          ============             ==============
</TABLE>


<PAGE>



                           HEALTHCARE PROPERTIES, L.P.
                             (A Limited Partnership)

                            STATEMENTS OF CASH FLOWS


<TABLE>
<CAPTION>

                                                                    Nine months ended          Nine months ended
                                                                   September 30, 1996         September 30, 1995
CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                                   <C>                       <C>          
   Net Income                                                         $   1,592,135             $   1,841,808
   Adjustments to reconcile net loss to
     net cash provided by operating activities:
         Gain on extinguishment of debt                                    (702,692)               (2,006,309)
         Gain sale                                                         (637,528)                 (363,785)
         Bad debts                                                          710,407                 1,033,845
         Depreciation and amortization                                    1,162,390                 1,486,792
         Changes in assets and liabilities:
             Accounts receivable                                         (1,071,427)                 (420,177)
             Prepaid expenses                                                25,802                    10,756
             Accounts payable &
               accrued expenses                                             494,816                  (357,041)
                                                                      -------------             -------------

                    NET CASH PROVIDED BY
                    OPERATING ACTIVITIES                                  1,573,903                 1,225,889
                                                                      -------------             -------------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Proceeds on sale of property                                            2,246,114                 2,958,287
  Purchases of property and improvement                                     (19,624)                     (760)
  Cash forfeiture on transfer of properties                                       0                   (68,219)
                                                                      -------------             -------------
                    NET CASH PROVIDED
                    IN INVESTING  ACTIVITIES                              2,226,490                 2,889,308
                                                                      -------------             -------------

CASH FLOWS FROM FINANCING ACTIVITIES:
       Payments on mortgage loans payable                                (2,440,562)               (1,850,559)
                                                                      -------------             -------------
                    NET CASH USED
                    FINANCING ACTIVITIES                                 (2,440,562)               (1,850,559)
                                                                      -------------             -------------

NET INCREASE IN CASH
AND CASH EQUIVALENTS                                                      1,359,831                 2,264,638

CASH AND CASH EQUIVALENTS
   Beginning of Period                                                    7,606,857                 5,606,274
                                                                      -------------             -------------

CASH AND CASH EQUIVALENTS
   End of Period                                                      $   8,966,688             $   7,870,912
                                                                      =============             =============
</TABLE>




<PAGE>


                                              
                           HEALTHCARE PROPERTIES, L.P.
                             (A Limited Partnership)

                          NOTE TO FINANCIAL STATEMENTS
                      Nine months ended September 30, 1996
                                   (Unaudited)

A.       ACCOUNTING POLICIES

         The accompanying  unaudited  condensed  financial  statements have been
prepared in accordance with generally accepted accounting principles for interim
financial  information and with the  instructions to Form 10-Q and Article 10 of
Regulation  S-X.  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 management,  all adjustments (consisting
of normal recurring accruals) considered necessary have been included. Operating
results are not  necessarily  indicative of the results that may be expected for
the year ending  December 31, 1996. The financial  statements  should be read in
conjunction with the consolidated financial statements and the footnotes thereto
included in Registrant's  annual report on Form 10-K for the year ended December
31, 1995.

B.        TRANSACTIONS WITH THE GENERAL PARTNER AND AFFILIATES OF THE GENERAL 
          PARTNER

         Effective  July  1,  1993,  Capital  Realty  Group  Senior  Housing,  
Inc.  ("CRGSH")  replaced Jacques-Miller, Inc. and Jacques and Associates, L.P. 
as the sole General Partner of the Registrant.

         Personnel  working  at the  Property  sites  and  certain  home  office
personnel who perform  services for the  Registrant are employees as of February
1, 1995 of Capital Senior Living, Inc. (CSL), an affiliate of CRGSH and prior to
February 1, 1995 were employees of CRGSH. The Registrant reimburses CRGSH or CSL
for  the  salaries,  related  benefits,  and  overhead  reimbursements  of  such
personnel as reflected in the accompanying financial statements.  Reimbursements
and fees paid to the general  partner and affiliates of the general  partner are
as follows:
<TABLE>
<CAPTION>

                                                        Nine months ended          Nine months ended
                                                       September 30, 1996         September 30, 1995

<S>                                                       <C>                       <C>           
Salary and benefit reimbursements                         $    1,066,835            $    1,865,718
Administrative reimbursements                                    220,019                   187,609
Asset management fees                                            560,477                   530,518
Property management fees                                         117,465                   209,134
General partner management fees                                   48,485                    63,695
                                                          --------------            --------------
                                                          $    2,013,281            $    2,856,674
                                                           =============            ==============
</TABLE>

C.       VALUATION OF RENTAL PROPERTY

         During  1991 and the first  half of 1992,  the  Registrant  experienced
defaults by the lessee/operators  under eight of its property leases. The result
of these  numerous  defaults is that many of the  Registrant's  leases have been
restructured  or the  properties  have been sold or deeded back to their lender.
Specifically,  Countryside,  with a carrying value of $1,815,932 was sold on May
1, 1996 to a third party buyer for $2,200,000.  The Foothills  property,  with a
carrying value of $2,122,179, was deeded to the lender in lieu of foreclosure on
July 19, 1995. Diablo/Tamarack,  with a carrying value of $2,071,332, was deeded
to the  lender  in lieu of  foreclosure  on August 1,  1995.  Additionally,  the
Cambridge facility,  which had been under a Chapter 11 Reorganization  Plan, was
discharged from Bankruptcy Court on August 1, 1996.
         As a result of the market  conditions  in the real estate  industry and
the historically  unsatisfactory  operating performance of certain of the rental
properties,   the   carrying   values  of  the   Foothills,   Countryside,   and
Diablo/Tamarack   properties   were  written  down  $3,458,384  to  the  related
non-recourse  debt value on these  properties  at December 31, 1993. At December
31, 1994, the Partnership  concluded that the carrying value exceeded  estimated
fair value on the Cambridge  facility.  As a result,  the carrying  value of the
Cambridge  facility was written down  $2,185,381  to the  estimated  fair market
value.

         The balance sheet of the  Registrant  as of September  30, 1996,  shows
total assets of  $32,621,396,  total  liabilities of $8,601,979,  and Registrant
equity of $24,019,417.


Item 2.           Management's Discussion and Analysis of Financial Condition 
and Results of Operations

Liquidity and Capital Resources

         Registrant  commenced an offering to the public on August 31, 1987,  of
depository  units  representing  beneficial  assignments of limited  partnership
interests  ("Units").  On October 14,  1987,  Registrant  commenced  operations,
having previously accepted  subscriptions for more than the specified minimum of
120,000  Units.  As of August 30, 1989, the offering was closed except for Units
for sale to existing  investors  under the terms of a distribution  reinvestment
plan.  As  of  September  30,  1995,   Registrant  had  sold  Units  aggregating
approximately  $43.4  million.   Due  to  the  suspension  of  the  distribution
reinvestment  plan,  Registrant  does not anticipate  any  additional  inflow of
investment.

         As of September 30, 1996, the Registrant  purchased eight nursing homes
and four  rehabilitation  centers for a combined price of  approximately  $ 51.0
million.  After completing these  acquisitions,  Registrant's  capital resources
consisted of ownership interests in these facilities subject to mortgage debt in
the  aggregate  amount of  approximately  $16 million  which  mortgage  debt was
secured by eight of its properties in amounts equal to 40% - 60% of Registrant's
purchase price of the respective property. Most of these loans were non-recourse
to Registrant.  As of September 30, 1996, Registrant owns four nursing homes and
four rehabilitation centers. Four of these properties have mortgage debt.

         Potential  sources of liquidity for  Registrant  include  collection of
outstanding  receivables and/or revenue  participation related to various leased
facilities,  collection on defaulted rent and/or damage  settlements  related to
leases  in  default,  new  mortgage  financing  on one or more  of  Registrant's
unencumbered  assets,  and a potential  sale of one or more of the  Registrant's
assets.

         As of September  30,  1996,  Registrant  had cash and cash  equivalents
aggregating  $8,966,688.  The cash and cash equivalents will be used for working
capital,  negative cash flow, balloon notes due by 1997, emergency reserves, and
other restructuring requirements.

         Registrant's  general  policy is to maintain  sufficient  cash and cash
equivalents  to address  disruptions  of its lease revenues and to have adequate
additional  funds for  investment in existing  assets for  improvements.  To the
extent that Registrant  deems it necessary to take over the operations of any of
its facilities  currently  under long term net lease,  such action would require
additional  investment  in  working  capital  for  operating  reserves,  capital
expenditures  and related debt  payments.  As a consequence  of prior  defaults,
Registrant  suspended cash  distributions  on July 1, 1991,  pending  successful
resolution of the various problems within its portfolio.  Due to the uncertainty
of the  timing and  conditions  under  which the  Liquidity  Reserve  (which was
suspended in March of 1991) might be reactivated, on August 15, 1991, Registrant
ceased accepting additional liquidation requests. As required by the Partnership
Agreement  for  Limited  Partners to be paid their  portion  for federal  income
taxes,  a  $250,000  cash  distribution  was  made in  June  1993.  Future  cash
distributions will be dependent upon improved  operational income and successful
refinancing on certain Registrant  mortgages.  The Units are not publicly traded
and as a result the liquidity of each Limited Partner's individual investment is
limited.

          Discussion of Three and Nine Months Ending September 30, 1996

         Rental revenues for the nine months ended September 30, 1996, decreased
$329,546 from the  comparable  nine months ended  September 30, 1995, due to the
sale of Heritage Manor on July 5, 1995 and the termination of its  corresponding
rental  revenues.  Net patient  services for the nine months ended September 30,
1996, decreased $1,305,275 from the nine months ended September 30, 1995, due to
the loss of operations on the Foothills  facility to a court appointed  receiver
in December,  1994, the sale of the Countryside  facility on May 1, 1996 and the
loss of the  Diablo/Tamarack  facility on August 1, 1995. The Registrant  gained
patient revenues from the inclusion of operations of the Cambridge  Nursing Home
on August 1, 1996.  Interest income for the nine months ended September 30, 1996
increased $43,231 from the nine months ended September 30, 1995 primarily due to
rising interest rates and increasing cash available for investment.

         In July 1995, the  Partnership  incurred a $363,785 gain on sale of the
Heritage  Manor  facility.  In addition,  during the third quarter of 1995,  the
Partnership incurred a $2,006,309  extraordinary gain on extinguishment of debt,
comprising a $895,005 gain on the transfer of the Diablo/Tamarack facility and a
$1,111,304 gain on the transfer of the Foothills  facility.  On May 1, 1996, the
Registrant sold the Countryside  facility to a third party buyer for $2,200,000,
incurring  a  $637,528  gain  on  sale  and a  $702,692  extraordinary  gain  on
extinguishment of debt.

         Facility  operating  expenses for the nine months ended  September  30,
1996,  decreased by $1,217,124 from the comparable 1995 period  primarily due to
the loss of operations of the Foothills facility,  the Countryside  facility and
the Diablo/Tamarack facility.  Facility operating expenses include the operating
expenses of the Cambridge  Nursing Home as of August 1, 1996.  Depreciation  for
the nine months ended September 30, 1996, decreased $275,049 from the comparable
1995  period and is  primarily  due to the loss of the  Foothills,  Countryside,
Diablo/Tamarack,  and Heritage Manor facilities. Lease default expense decreased
$139,646 for the nine months ended  September 30, 1996 from the comparable  1995
period due to  decreasing  legal fees  incurred on the  resolution  of defaulted
leases.   Administrative  expenses,  including  fees  to  the  General  Partner,
increased $111,817 for the nine months ended September 30, 1996 in comparison to
1995  and  is  primarily  due to  increased  administrative  reimbursements  and
professional fees. Bad debt expense for the nine months ended September 30, 1996
decreased  $323,438  from  the  comparable  1995  period  primarily  due  to the
decreasing bad debt provision on Partnership advances and rent provisions to the
Cambridge facility.  Interest expense and amortization for the nine months ended
September  30, 1996  decreased by $478,998 and $49,353,  respectively,  from the
comparable  1995  period,  and is  primarily  due to the loss of the  Foothills,
Countryside, Diablo/Tamarack, and Heritage Manor facilities.

         For the three  months  ended  September  30, 1996 as compared  with the
three months ended September 30, 1995, the  Partnership's  revenue and operating
expenses  were  impacted by the same shifts of revenue and expenses as discussed
above,  with the exception of increased  patient revenue and facility  operating
expenses due to the inclusion of the Cambridge facility.

         Cash and cash equivalents as of September 30, 1996 increased $1,359,831
over the balance at December 31, 1995. Increased cash for the nine months ending
September 30, 1996 in comparison to 1995 is primarily due to improved  operating
cash flow from  discontinued  operations of the Foothills and sale proceeds from
the sale of the  Heritage  Manor  facility  and the  Countryside  facility.  Net
accounts  receivable  of $571,429 at  September  1996  reflected  an increase of
$361,020  over  1995  year-end  balances  and is due  to  the  inclusion  of the
Cambridge facility  operations as of August 1, 1996.  Accounts payable,  accrued
expenses, and facility accounts payable balances decreased $342,463 at September
30, 1996,  from December 31, 1995 and is primarily  due to accrued  interest and
vacation  expense  write-offs  on the transfer and sale of the  Diablo/Tamarack,
Foothills, and Countryside facilities.

         The  following  is a brief  discussion  of the  status of  Registrant's
properties:

         Cedarbrook,  Cane Creek,  Crenshaw Creek and Sandy Brook facilities.  
Rebound, Inc. ("Rebound") leased the  Cedarbrook,  Cane  Creek,  Crenshaw  Creek
and Sandy Brook  properties  pursuant to a master lease with the Registrant.

         Effective  November 30, 1992,  the  Registrant  and Rebound  reached an
amended master lease agreement whereby Rebound agreed to resume increased rental
payments to the  Registrant,  the terms of the lease were  extended from five to
nine  years,   Registrant  gained  a  10%  ownership  position  in  Rebound  and
substantial  penalty  provisions were placed on Rebound in the event of default.
Additionally,  Registrant  forgave notes  receivable from Rebound and received a
promissory note for $1,900,000  payable over three years that was convertible on
certain default  conditions at the option of the Registrant to additional shares
of Rebound. During the second quarter ended June 30, 1993, Relife, Inc. acquired
Rebound resulting in payment of the $1,900,000 promissory note to the Registrant
and sale of Rebound stock for $939,025 in cash. The master lease negotiated with
Rebound was  guaranteed by Relife,  Inc. Due to low occupancy of the  Sandybrook
facility,  it was temporarily  closed in 1994 and at this time Registrant cannot
determine  when it might  reopen.  During  1994,  Relife,  Inc.  was acquired by
HealthSouth Rehabilitation Corporation.  Rental payments in March and April 1995
were  discontinued  by the new ownership  causing an  interruption in the master
lease.   Registrant   met  with  the  new  ownership  and  those  payments  were
subsequently made in the second quarter of 1995. Subsequent to that time period,
all payments have been made on a timely basis.

         Two recourse loans, Cedarbrook and Cane Creek, were due in January 1996
in the aggregate amount of approximately $2,400,000.

         The lender of both the Cane Creek and Cedarbrook notes agreed to extend
their loan to December 1, 2001, pending completion of final paperwork.

         Foothills facility.  The mortgage loan on Foothills was in default from
April 1992 onward. During December 1994, the Registrant was ordered to turn over
management of the Foothills facility to a court appointed receiver.  On July 19,
1995, the Registrant transferred the property to the lender,  pursuant to a deed
in lieu of foreclosure. The documents for this transfer include a release of all
potential liability to the Registrant.

         Countryside  facility.  The mortgage  loan on  Countryside  was also in
default from April 1992 onward. On May 1, 1996,  Registrant sold the Countryside
facility  to a third  party  buyer  for  $2,200,000.  With  the  sale  proceeds,
Registrant  paid off the lender on Countryside an amount agreed to by the lender
in full settlement of all obligations to the lender.  Registrant  netted $26,000
as a result of this agreed upon sale. Registrant also obtained a full release of
all potential liability from the lender.

         Diablo/Tamarack  facility.  The  mortgage  loan on the  Diablo/Tamarack
facility  was also in default  from April 1992  onward.  In November  1994,  the
lender attempted to appoint a receiver. The Registrant  successfully opposed the
Motion and  negotiated  for a transition of this property which will not involve
ongoing  liability to the Registrant.  On July 31, 1995, the facility was deeded
to the lender in lieu of foreclosure and a release of all potential liability to
Registrant was obtained.

         Cambridge  facility.  The  lessee of the  Cambridge  facility,  Nursing
Centers of America-Cambridge ("NCAC") , filed a voluntary petition under Chapter
11 of the Federal  Bankruptcy  Code in February  of 1992.  Registrant  commenced
litigation  against NCAC seeking full payment of future  rentals under the lease
or the removal of NCAC from the direct operational control of the facility.

         Based on certain  interpretations of state regulations,  the Registrant
could have become liable for  approximately  $1,400,000  in connection  with the
recovery of prior Medicaid overpayments.  Additionally, property taxes were owed
to the City of Cambridge.  On May 24, 1993, Registrant reached an agreement with
the  bankrupt  operator of the  Cambridge  facility to repossess  that  facility
pending  emergence  from  Bankruptcy  Court.  It became  the  responsibility  of
Registrant  to  file  a  bankruptcy  plan  to  take  this  property  out  of the
jurisdiction  of the Bankruptcy  Court. In December 1995,  Registrant  reached a
settlement with the State of Massachusetts and the City of Cambridge with regard
to the  outstanding  issues facing the Cambridge  facility.  This settlement was
approved by the United States  Bankruptcy Court in Florida in the fourth quarter
of 1995. On August 1, 1996,  Cambridge Nursing Home Limited Liability Company, a
subsidiary  of the  Registrant,  acquired the assets of Cambridge  Nursing Home,
thus releasing the current  operations of the facility from the jurisdictions of
the  Bankruptcy  Court.  The subsidiary of the Registrant now has the assets and
operates the property.

         Heritage  Manor  facility.  The Heritage Manor facility was sold in May
1995 for $3,075,000 and the Partnership  netted $1,458,287 after payment of fees
and mortgage balance.

         Trinity Hills,  McCurdy, and Hearthstone  facilities.  The Registrant's
other  facility  lessees  are all  current  in their  lease  obligations  to the
Registrant.  In addition,  the  Registrant  believes it likely that two of these
lessees will pay additional rental amounts to the Registrant during future years
based upon  increased  revenues at those  facilities.  However,  there can be no
assurance  of such  increased  revenue.  Two of these  facilities  appear  to be
generating  cash flow  sufficient to fund their lease  obligations,  but Trinity
Hills is, at this time,  not generating  sufficient  cash flow to fund its lease
obligations from property operations.  However, the lessee continues to fund the
deficit lease cash flow.


         PART II.  OTHER INFORMATION

Item 1.  Legal Proceedings

         Registrant  has been  engaged  in  litigation  in an attempt to recover
damages from  defaulting  lessees and their  guarantors.  Such  actions  involve
claims  against a prior  operator of the  Diablo/Tamarack  facility.  In certain
cases  counterclaims  against  Registrant have been either  threatened or filed.
Registrant  does not believe any materially  adverse  judgements are likely from
these counter claims.

Item 2.  Changes in Securities

         None.

Item 3.  Defaults Upon Senior Securities

         None.

Item 4.  Submission of Matters to a Vote of Security Holders

         None.

Item 5.  Other Information

         None.

Item 6.  Exhibits and Reports on Form 8-K

         None.
         SIGNATURES

         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
the  Registrant  has duly  caused  this report to be signed on its behalf by the
undersigned duly authorized.



HEALTHCARE PROPERTIES, L.P.

By:      CAPITAL REALTY GROUP SENIOR HOUSING, INC.
          General Partner



By:
         Keith Johannessen
         President

Date: