UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                     --------------------------------------

                                    FORM 10-K
(Mark One)
    [X]    ANNUAL  REPORT  PURSUANT  TO SECTION  13 OR 15(d) OF  THE  SECURITIES
           EXCHANGE  ACT OF 1934 [NO FEE REQUIRED]

           For the fiscal year ended             December 31, 2001
                                     ------------------------------------------

                                       OR

           TRANSITION REPORT  PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
           EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

           For the transition period from                   to
                                          -----------------    ----------------

                         Commission File number 0-14377
                         ------------------------------

                      Krupp Realty Limited Partnership-VII
-------------------------------------------------------------------------------

Massachusetts                                             04-2842924
-------------------------------------------   ---------------------------------
(State or other jurisdiction of               (IRS employer identification no.)
incorporation or organization

One Beacon Street, Boston, Massachusetts                   02108
-------------------------------------------   ---------------------------------
(Address of principal executive                          (Zip code)
offices)

(Registrant's telephone number, including area code)       (617) 523-7722
                                                     --------------------------

Securities registered pursuant to Section 12(b) of the Act:   None

Securities registered pursuant to Section 12(g) of the Act:   Units of Investor
                                                               Limited Partner
                                                               Interest

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  preceeding 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 [ ]


Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ X ]

Aggregate market value of voting securities held by
 non-affiliates: Not Applicable.

Documents incorporated by reference: Part IV, Item 14.

The exhibit index is located on pages 11-12.

The total number of pages in this document is 30.

<PAGE>

                                     PART I

     This Form 10-K contains  forward-looking  statements  within the meaning of
Section 27A of the  Securities  Act of 1933 and  Section  21E of the  Securities
Exchange  Act of  1934.  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.

ITEM 1.    BUSINESS

     Krupp Realty Limited Partnership-VII  ("KRLP-VII") was formed on August 21,
1984 by filing a  Certificate  of Limited  Partnership  in the  Commonwealth  of
Massachusetts.  KRLP-VII  issued all of the  General  Partner  Interests  to two
General Partners, The Krupp Corporation,  a Massachusetts  corporation,  and The
Krupp Company  Limited  Partnership-II,  a  Massachusetts  limited  partnership.
KRLP-VII also issued all of the Original Limited Partner  Interests to The Krupp
Company  Limited  Partnership-II.  On November 2, 1984,  KRLP-VII  commenced  an
offering  of up to  40,000  units of  Investor  Limited  Partner  Interest  (the
"Units") for $1,000 per Unit. The public  offering was closed on April 25, 1986,
at which time 27,184 Units had been sold. For additional details,  see Note A to
Consolidated  Financial  Statements  included  in  Item 8  (Appendix  A) of this
report. The primary business of KRLP-VII is to invest in, operate, refinance and
ultimately  dispose of a  diversified  portfolio  of  residential  real  estate.
KRLP-VII considers itself to be engaged in only one industry segment, investment
in real estate.

     On December 19, 1984 the General  Partners  formed Krupp Realty  Courtyards
Limited  Partnership  ("Realty-VII")  as a prerequisite  for the  refinancing of
Courtyards Village East Apartments ("Courtyards Village"). At the same time, the
General Partners transferred ownership of Courtyards Village to Realty-VII.  The
General  Partner of Realty-VII is KRLP-VII.  The Limited  Partners of Realty-VII
are  KRLP-VII  and The  Krupp  Corporation  ("Krupp  Corp.").  Krupp  Corp.  has
beneficially assigned its interest in Realty-VII to KRLP-VII.

     On March 31, 1994, the General  Partners  formed Windsor  Partners  Limited
Partnership  ("Windsor  L.P.") as a prerequisite  for the refinancing of Windsor
Apartments.  At the same time, the General Partners transferred ownership of the
property to Windsor L.P. In exchange  for the  property,  KRLP-VII  received 99%
Limited Partnership interest in Windsor L.P. The General Partner of Windsor L.P.
is ST. Windsor Corporation,  which has a 1% interest in Windsor L.P. and is 100%
owned by KRLP-VII.

     KRLP-VII,  Realty-VII  and Windsor  L.P.  are  collectively  known as Krupp
Realty Limited Partnership-VII and Subsidiaries (collectively referred to herein
as the "Partnership").

     On August 29, 2001, the Partnership sold Courtyards Village East Apartments
("Courtyards"),   a  224-unit   multi-family   apartment  community  located  in
Naperville, Illinois, to an unaffiliated third party (see Note E to Consolidated
Financial Statements, included in Item 8 (Appendix A) of this report).

     On November 20, 2001, the Partnership sold Windsor Apartments  ("Windsor"),
a 300-unit  apartment  community  located in Garland,  Texas, to an unaffiliated
third party (see Note E to Consolidated Financial Statements, included in Item 8
(Appendix A) of this report).

     The future  performance of the  Partnership  will depend upon factors which
cannot be predicted.  Such factors include general economic,  both on a national
basis and in those areas where the  Partnership's  real estate  investments were
located,  liquidation  expenses,  government  regulations  and federal and state
income tax laws as well as the ultimate  settlement  of  contingent  liabilities
associated   with  the  sale  of  certain  of  the   Partnerships   real  estate
investments..  The  requirements  for compliance  with federal,  state and local
regulations  to  date  have  not  had an  adverse  effect  on the  Partnership's
operations, and no adverse effect therefrom is anticipated in the future.

     As of  December  31,  2001,  the  Partnership  has  no  investment  in  any
multi-family apartment communities (see Note E).

     As of December 31, 2001, the Partnership did not employ any personnel.



                                       2
<PAGE>



ITEM 2.    PROPERTIES

     As of  December  31,  2001,  the  Partnership  has  no  investment  in  any
multi-family apartment communities.

     A summary of the Partnership's  real estate  investments as of December 31,
2001 is  presented  below.  Schedule III included in Item 8 (Appendix A) to this
report  contains  additional  detailed  information  with respect to  individual
properties.

                                            Average Occupancy For the Year Ended
                                                        December 31,
                        Year of      Total  ------------------------------------
     Description        Acquisition  Units   2001   2000   1999   1998   1997
----------------------- -----------  -----  ------ ------ ------ ------ ------

Courtyards Village East
Apartments
Naperville, Illinois      1985        224     N/A    95%    95%    97%    97%

Windsor Apartments
Garland, Texas            1984        300     N/A    95%    96%    97%    96%
                                     -----
                                      524  Units
                                     =====



ITEM 3.    LEGAL PROCEEDINGS

     There are no material pending legal proceedings to which the Partnership is
a party or of which any of its property is the subject.


ITEM 4.    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     None.



                                       3
<PAGE>



                                     PART II

ITEM 5.    MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
           MATTERS


     The  transfer of Units is subject to certain  limitations  contained in the
Partnership  Agreement.  There is no public  market  for the Units and it is not
anticipated that any such public market will develop.

     The  number of  Investor  Limited  Partners  as of  December  31,  2001 was
approximately 1,260.

     One of the objectives of the  Partnership is to generate cash available for
distribution.  In 1999 and thereafter, the semiannual distributions were paid at
an annual rate of $18.28 per Unit.

     In 2001,  the  Partnership  distributed  $218.80 per Unit with the proceeds
received from the sale of  Courtyards.  Pursuant to the  Partnership  Agreement,
distributions  from capital  transactions,  such as the sale of Courtyards,  are
allocated 99% to Investor Limited Partners and 1% to the General  Partners.  For
details,  see Note H to  Consolidated  Financial  Statements  included in Item 8
(Appendix A) of this report.

     The Partnership made the following distributions to its Partners during the
years ended December 31, 2001 and 2000:

                                            Year Ended December 31,
                                ----------------------------------------------
                                         2001                    2000
                                ----------------------  ----------------------
                                  Amount     Per Unit     Amount     Per Unit
                                ----------  ----------  ----------  ----------
Limited Partners:

  Investor Limited Partners
    (27,184 Units outstanding)  $6,444,825  $   237.08  $  496,852  $    18.28

  Original Limited Partner          44,150                  44,164

General Partners                    71,120                  11,042
                                ----------              ----------

                                $6,560,095              $  552,058
                                ==========              ==========





                                       4
<PAGE>



ITEM 6.       SELECTED FINANCIAL DATA

     The following table sets forth selected financial information regarding the
Partnership's  financial position and operating results. This information should
be used in conjunction  with  Management's  Discussion and Analysis of Financial
Condition and Results of Operations and the  Consolidated  Financial  Statements
and  Notes  thereto,  which  are  included  in  Items  7 and 8 of  this  report,
respectively.

                    2001         2000         1999         1998         1997
                -----------  -----------  -----------  -----------  -----------
                $ 3,370,568  $ 4,202,751  $ 3,997,617  $ 3,989,189  $ 4,795,059
Total revenue

Loss before gain
 on sale of
 property and
 extraordinary
 loss              (347,038)    (279,488)    (549,227)    (298,630)    (151,137)

Gain on sale of
 property        17,780,327            -            -      676,316            -

Extraordinary
 loss from early
 extinguishment
 of debt            (90,922)           -            -            -            -

Net income
 (loss)          17,342,367     (279,488)    (549,227)     377,686     (151,137)

Net income (loss)
 allocated to:

  Investor
   Limited
   Partners      16,243,960     (276,693)    (543,735)     373,909     (149,626)
     Per Unit        597.56       (10.18)      (20.00)       13.75        (5.50)

  Original
   Limited
   Partner          614,081            -            -            -            -

  General
   Partners         484,326       (2,795)      (5,492)       3,777       (1,511)

Total assets at
   December 31,   9,045,723    8,985,092    9,837,297   10,974,526   17,995,610

Long-term
 obligations at
 December 31,             -    5,028,109   10,108,246   10,220,786   14,345,624

Distributions:

  Investor
   Limited
   Partners       6,444,825      496,852      496,853    2,885,312      543,679
     Per Unit        237.08        18.28        18.28       106.14        20.00

  Original
   Limited
   Partner           44,150       44,164       44,165       48,327       48,327

  General
   Partners          71,120       11,042       11,041       35,460       12,082

Operating  results for the periods  presented are not comparable due to the sale
of Nora Corners on January 30, 1998,  the sale of Courtyards on August 29, 2001,
and the sale of Windsor on November 20, 2001.

The per Unit  distributions  for the years ended December 31, 2001,  2000, 1999,
1998,  and  1997  and  were  $237.08,   $18.28,  $18.28,  $106.14,  and  $20.00,
respectively,  of which  $218.80 and $86.14  represented  a return of capital in
2001 and 1998, respectively.

Prior  performance of the  Partnership is not  necessarily  indicative of future
operations.



                                       5
<PAGE>

ITEM 7.    MANAGEMENT'S  DISCUSSION AND  ANALYSIS  OF  FINANCIAL  CONDITION  AND
           RESULTS OF OPERATIONS

     This  Management's  Discussion  and  Analysis of  Financial  Condition  and
Results  of  Operations  contains  forward-looking  statements  including  those
concerning Management's  expectations regarding the future financial performance
and future events. These forward-looking statements involve significant risk and
uncertainties,  including  those  described  herein.  Actual  results may differ
materially from those anticipated by such forward-looking statements.

Liquidity and Capital Resources

     On November 20, 2001, the Partnership sold Windsor, a 300-unit multi-family
apartment  community to an unaffiliated  third party.  The Partnership  received
$12,235,336,  net of closing costs of $80,518 and payoff of mortgage payable and
accrued interest of $4,971,598.

     On  August  29,  2001,  the  Partnership   sold   Courtyards,   a  224-unit
multi-family  apartment complex to an unaffiliated  third party. The Partnership
received  $7,608,399  for the sale,  net of closing costs of $83,648 and debt of
$5,075,953  assumed by the  buyer,  and repaid the  mortgage  note  payable  and
accrued interest of $30,106.

     As of  December  31,  2001,  the  Partnership  has  no  investment  in  any
multi-family apartment communities.

Operations

     The following  discussion  relates to the operations of the Partnership and
its properties  (Courtyards  Village and Windsor Apartments) for the years ended
December 31, 2001,  2000, and 1999.  The sale of Courtyards  Village and Windsor
Apartments as of December 31, 2001  significantly  impacts the  comparability of
the Partnership's operations between these periods.

2001 compared to 2000

     Net  income  increased  in 2001  when  compared  to 2000 as a result of the
Partnership recognizing a gain on the sale of its remaining real estate assets.

     Total  expenses  decreased  in  2001  when  compared  to  2000  due  to the
Partnership's  sale of its remaining  real estate assets in August and November.
General and  administrative  costs  increased as a result of increased  investor
communication  costs,  including copying and mailing investor letters and annual
reports.

2000 compared to 1999

     Net loss  decreased in 2000 when compared  1999 as total revenue  increased
and total  expenses  decreased.  The  increase in total  revenue is  primarily a
result  of  rental  rate  increases  implemented  at all  of  the  Partnership's
properties at the end of the first quarter of 2000. Interest income decreased in
2000 due to a lower  average cash and cash  equivalent  balances  available  for
investment when compared to 1999.

     Total  expenses  for 2000  decreased  when  compared to 1999.  Depreciation
expense  decreased as fixed asset  additions  purchased  in the  previous  years
became  fully  depreciated.  Maintenance  expenses  decreased in 2000 as capital
expenditures  reduced  the need  for  repairs  and  maintenance  in some  areas.
Operating  expenses  increased  primarily  as a result of  increases in leasing,
utilities, and insurance costs.




                                       6
<PAGE>



ITEM 7A.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     The Partnership's  future earnings,  cash flows and fair values relevant to
financial  instruments are dependent upon prevalent market rates. Market risk is
the risk of loss from adverse changes in market prices and interest  rates.  The
Partnership  manages its market risk by matching  projected  cash  inflows  from
operating  activities,   investing  activities  and  financing  activities  with
projected   cash  outflows  to  fund  debt   payments,   acquisitions,   capital
expenditures, distributions and other cash requirements.

     All of the Partnership's debt has been repaid as of December 31, 2001.

ITEM 8.    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     The financial  statements and supplementary data are listed in the Index to
Financial  Statements and Financial  Statement Schedule appearing on Page F-2 of
this Annual Report on Form 10-K.

ITEM 9.    CHANGES  IN  AND  DISAGREEMENTS  WITH  ACCOUNTANTS ON  ACCOUNTING AND
           FINANCIAL DISCLOSURE

     None.



                                       7
<PAGE>



                                    PART III

ITEM 10.   DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     The Partnership has no directors or executive  officers.  Information as to
the  directors  and  executive  officers  of The Krupp  Corporation,  which is a
General Partner of KRLP-VII, and The Krupp Company Limited  Partnership-II,  the
other General Partner of KRLP-VII, is as follows:

        Name and Age                   Position with The Krupp Corporation
        -------------------            ------------------------------------
        Douglas Krupp (55)             Co-Chairman of the Board
        George Krupp (57)              Co-Chairman of the Board
        Frank Apeseche (44)            President
        David C. Quade (58)            Treasurer and Executive Vice President

     Douglas Krupp  co-founded  and serves as  Co-Chairman  and Chief  Executive
Officer of The Berkshire  Group,  an integrated real estate  financial  services
firm engaged in real estate acquisitions, property management, mortgage banking,
investment sponsorship,  venture capital investing and financial management. Mr.
Krupp  has held the  position  of  Co-Chairman  since  The  Berkshire  Group was
established  as The  Krupp  Companies  in 1969 and he has  served  as the  Chief
Executive  Officer  since  1992.  Mr.  Krupp  serves as a member of the Board of
Trustees at Brigham & Women's Hospital. He is a graduate of Bryant College where
he received an honorary Doctor of Science in Business Administration in 1989 and
was elected trustee in 1990.

     George  Krupp,  the  brother  of  Douglas  Krupp,  is  the  Co-Founder  and
Co-Chairman of The Berkshire Group, an integrated real estate financial services
firm engaged in real estate acquisitions, property management, mortgage banking,
investment sponsorship,  venture capital investing and financial management. Mr.
Krupp  has held the  position  of  Co-Chairman  since  The  Berkshire  Group was
established as The Krupp  Companies in 1969. Mr. Krupp has been an instructor of
history at the New Jewish High School in Waltham,  Massachusetts since September
of  1997.  Mr.  Krupp  attended  the  University  of  Pennsylvania  and  Harvard
University and holds a Master's Degree in History from Brown University.

     Frank Apeseche is the President of The Berkshire Group. Mr. Apeseche joined
The  Berkshire  Group in 1986.  He served as Chief  Financial  Officer and Chief
Planning  Officer from 1992 to 1995.  Mr.  Apeseche  was the  founding  Managing
Partner of BG Affiliates, a private equity investment firm. Prior to joining The
Berkshire Group, Mr. Apeseche served as a manager with Andersen Consulting where
he specialized  in providing  technology  solutions to Fortune 500 clients.  Mr.
Apeseche received a BA with distinction from Cornell  University and an MBA with
Honors from the University of Michigan.

     David  C.  Quade is the  Treasurer  and  Executive  Vice  President  of The
Berkshire  Group. Mr. Quade joined The Berkshire Group in 1998. Prior to joining
The Berkshire Group, he was a Principal and Executive  V.P./CFO at Leggat McCall
Properties  for eighteen  years.  At Leggatt  McCall,  Mr.  Quade had  extensive
experience in business strategic planning, financial workouts, funds management,
and corporate  financing  regarding asset  management.  Prior to that, Mr. Quade
worked in senior  financial  capacities for two NYSE  companies,  North American
Mortgage  Investors and Equitable Life Mortgage & Realty Investors,  and he also
worked at Coopers & Lybrand.  He has a P.A.P.  from the Northwestern  University
Graduate School of Business, and a B.S. degree and a Master's degree in Business
Administration from Central Michigan University.


ITEM 11.   EXECUTIVE COMPENSATION


     The Partnership has no directors or executive officers.




                                       8
<PAGE>



ITEM 12.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     As of February 15, 2002, beneficial owners of record owning more than 5% of
the Partnership's 27,184 outstanding Units were as follows:

  Title                       Name and Address    Amount and Nature    Percent
    of                               Of                Of                 of
  Class                       Beneficial Owner   Beneficial Ownership   Class
--------- -------------------------------------  -------------------- ----------
Investor   Equity Resources Group, Incorporated   1,664.00 Units (1)     6.12%
 Limited
 Partner   14 Story Street
 Units     Cambridge, MA 02138

Investor   Madison Avenue Investment Partners, LLC
 Limited
 Partner   P.O. Box 7533                          1,812.90  Units(2)(3)  6.70%
 Units     Incline Village, NV 89452

Investor   First Equity Realty, LLC
 Limited
 Partner   555 Fifth Avenue, 9th Floor            1,812.90  Units(2)(4)  6.70%
 Units     New York, NY 10017

Investor   The Harmony Group II, LLC
 Limited
 Partner   P.O. Box 7533                          1,812.90  Units(2)(5)  6.70%
 Units     Incline Village, NV 89452

Investor   Ronald M. Dickerman
 Limited
 Partner   555 Fifth Avenue, 9th Floor            1,812.90  Units(2)(6)  6.70%
 Units     New York, NY 10017

Investor   Bryan E. Gordon
 Limited
 Partner   P.O. Box 7533                          1,812.90  Units(2)(7)  6.70%
 Units     Incline Village, NV 89542


(1)  According to the  statement on Schedule  13D  originally  filed on April 3,
     1996 by Equity Resources  Group,  Incorporated,  Equity Resource  Cambridge
     Fund Limited Partnership, Equity Resource General Fund Limited Partnership,
     Equity Resource Brattle Fund Limited  Partnership,  Equity Resource Fund XV
     Limited Partnership,  Equity Resource Fund XVI Limited Partnership,  Equity
     Resource Fund XVII Limited Partnership,  Equity Resource Fund XVIII Limited
     Partnership, Equity Resource Fund XIX Limited Partnership, James E. Brooks,
     Mark S.  Thompson and Eggert  Dagbjartsson,  as amended by Amendment  No. 1
     thereto dated December 12, 1996 and Amendment No. 2 thereto dated April 21,
     1997,  Equity  Resources  Group,  Incorporated,  James E.  Brooks,  Mark S.
     Thompson and Eggert  Dagbjartsson,  in their capacities as General Partners
     of each of Equity  Resource  Cambridge  Fund  Limited  Partnership,  Equity
     Resource  General Fund Limited  Partnership,  Equity Resource  Brattle Fund
     Limited Partnership,  Equity Resource Fund XV Limited  Partnership,  Equity
     Resource Fund XVI Limited  Partnership,  Equity  Resource Fund XVII Limited
     Partnership,  Equity  Resource  Fund XVIII Limited  Partnership  and Equity
     Resource  Fund XIX Limited  Partnership,  respectively,  share the power to
     vote or direct  the vote and to dispose  of or direct  the  disposition  of
     1,664 units.

(2)  According to the statement on Schedule 13G originally  filed on February 9,
     2000 by Madison Avenue  Investment  Partners,  LLC ("MAIP"),  Madison Value
     Fund, LLC ("MVF"),  Madison Investment Partners 11, LLC ("MIP 11"), Madison
     Investment  Partners  10 ("MIP  10"),  First  Equity  Realty,  LLC  ("First
     Equity"),  The Harmony Group II, LLC  ("Harmony"),  Ronald M. Dickerman and
     Bryan E. Gordon  (collectively,  the  "Reporting  Persons"),  as amended by
     Amendment  No. 1 therto dated  February 9, 2001 and Amendment No. 2 thereto
     dated February 14, 2002 (as amended,  the "Madison  Schedule 13G"), each of
     MAIP,  First Equity,  Harmony Group and Reporting  Persons may be deemed to
     constitute a "group" within the meaning of Section 13(d)(3) of the Exchange
     Act. According to the Amended Madison Schedule 13G, MAIP is the controlling
     person  of  various  entities  that  are  the  nominee  owners  of,  or the
     successors  by merger to the assets of nominee  owners of, Units of Limited
     Partner  Interest  (the  "Units") of the  Issuer.  As stated in the Amended
     Madison Schedule 13G, these nominees,  none of which beneficially own 5% or
     more  of  the  Units,  are  Madison/AG



                                       9
<PAGE>

     Value Partners III, Cobble Hill  Investments,  L.P.,  Madison/WP Value Fund
     IV, LLC,  Madison/WP  Value Fund V, Madison  Liquidity  Investors 100, LLC,
     Madison  Liquidity  Investors 103, LLC, Madision  Liquidity  Investors 111,
     LLC, and Madison Liquidity  Investors 107, LLC. Madison Liquidity Investors
     112, LLC is the nominee  holder of  approximately  0.5% of the Units and is
     controlled by MVF.

     According to the Madison Schedule 13G, the controlling  members of MAIP are
     First Equity,  of which Mr. Dickerman is the Managing Member,  and Harmony,
     of which Mr. Gordon is the Managing Member.  The controlling  member of MVF
     is MIP 11. The controlling member of MIP 11 is MAIP. The controlling member
     of MIP 10 is MAIP.

(3)  According to the Madison Schedule 13G, Madison Avenue Investment  Partners,
     LLC has sole voting and dispositive power with respect to 1,812.90 units of
     the Partnership.

(4)  According to the Madison Schedule 13G, First Equity Realty,  LLC has shared
     voting  and  dispositive  power  with  respect  to  1,812.90  units  of the
     Partnership.

(5)  According to the Madison Schedule 13G, The Harmony Group II, LLC has shared
     voting  and  dispositive  power  with  respect  to  1,812.90  units  of the
     Partnership.

(6)  According  to the Madison  Schedule  13G,  Ronald M.  Dickerman  has shared
     voting  and  dispositive  power  with  respect  to  1,812.90  units  of the
     Partnership.

(7)  According to the Madison  Schedule  13G,  Bryan E. Gordon has shared voting
     and dispositive power with respect to 1,812.90 units of the Partnership.

The only interests  held by management or its affiliates  consist of its General
Partner and Original Limited Partner Interests.


ITEM 13.   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     The Partnership does not have any directors, executive officers or nominees
for  election  as  director.  Please  see Note I to the  Consolidated  Financial
Statements (Appendix A).





                                       10
<PAGE>
                                     PART IV

ITEM 14.   EXHIBITS,  CONSOLIDATED FINANCIAL  STATEMENT SCHEDULES AND REPORTS ON
           FORM 8-K


 (a) 1.   Consolidated   Financial  Statements  -  see  Index  to   Consolidated
          Financial  Statements and Schedule included under Item 8 (Appendix A),
          on page F-2 to this report.

     2.   Consolidated Financial Statement Schedules - see Index to Consolidated
          Financial  Statements and Schedule included under Item 8 (Appendix A),
          on page F-2 to this report.  All other  schedules  are omitted as they
          are not  applicable or not required or the  information is provided in
          the Consolidated Financial Statements or the Notes thereto.

 (b)      Reports on Form 8-K

          On December 5, 2001, the Partnership filed Form 8-K regarding the sale
          of Windsor Apartments.

 (c)      Exhibits:

          Number and Description Under Regulation S-K

          The following reflects all applicable exhibits required under Item 601
          of Regulation S-K:

          (4)  Instruments  defining  the rights of security  holders  including
               indentures:

               (4.1)Amended Agreement of Limited Partnership dated as of October
                    23, 1984 [Exhibit A to Prospectus  included in  Registrant's
                    Registration Statement on Form S-11 (File 2-92889)].*

               (4.2)Thirty-Second  Amendment and  Restatement  of Certificate of
                    Limited  Partnership filed with the Massachusetts  Secretary
                    of State on June 4, 1986 [Exhibit 4.2 to Registrant's Report
                    on Form 10-K dated October 31, 1986 (File No. 0-14377)].*

          (10) Material Contracts

               Windsor Apartments

               (10.1) Purchase  and Sale  Agreement  dated June 3, 1983  between
                    Douglas Krupp, on behalf of himself and others,  and Garland
                    Land Joint Venture [Exhibit 1 to Registrant's Report on Form
                    8-K dated December 27, 1984 (File No. 2-92889)].*

               (10.2) Property  Management  Agreement,  dated  December 27, 1984
                    between Krupp Realty Limited  Partnership-VII,  as Owner and
                    BRI OP  Limited  Partnership,  formerly  known as  Berkshire
                    Property  Management,   a  subsidiary  of  Berkshire  Realty
                    Company,  Inc. [Exhibit 10.4 to Registrant's  Report on Form
                    10-K for the fiscal  year ended  October  31, 1984 (File No.
                    2-92889)].*

               (10.3)  Promissory  Note  dated  April  13,  1994 by and  between
                    Windsor Partners Limited  Partnership and Sun Life Insurance
                    Company of America  [Exhibit 10.1 to Registrant's  Report on
                    Form 10-Q dated June 30, 1994 (File No. 0-14377)].*

               (10.4)  Deed  of  Trust,  Security  Agreement,   Fixture  Filing,
                    Financing Statement and Assignment of Leases and Rents dated
                    April 13, 1994 from the grantor,  Windsor  Partners  Limited
                    Partnership, to the Trustee, Brian C. Rider [Exhibit 10.2 to
                    Registrant's  Report on Form 10-Q dated June 30,  1994 (File
                    No. 0-14377)].*



                                       11
<PAGE>

               Courtyards Village East Apartments

               (10.5) Purchase and Sale Agreement dated October 12, 1984 between
                    Douglas  Krupp on  behalf of  himself  and  others,  and The
                    Courtyards  Village  and  The  Courtyards  Village  Inn-East
                    Apartments  Partnership [Exhibit 1 to Registrant's Report on
                    Form 8-K dated April 1, 1985 (File 2-92889)].*

               (10.6) Amended  Trust  Agreement  dated May 6, 1976  between  The
                    Courtyards  Village  and  The  Courtyards  Village  Inn-East
                    Apartments  Partnership and American National Bank and Trust
                    Company of Chicago [Exhibit 2 to Registrant's Report on Form
                    8-K dated April 1, 1985 (File No. 2-92889)].*

               (10.7) Assignment  of Trust of American  National  Bank and Trust
                    Company  of  Chicago  dated  April  1,  1985  [Exhibit  3 to
                    Registrant's  Report on Form 8-K dated  April 1, 1985  (File
                    No. 2-92889)].*

               (10.8) Mortgage  Note  dated  January  1, 1973  between  American
                    National  Bank and Trust  Company  of Chicago  and  Republic
                    Realty Mortgage Company [Exhibit 4 to Registrant's Report on
                    Form 8-K dated April 1, 1985 (File No. 2-92889)].*

               (10.9) Modification  Agreement dated May 1, 1975 between American
                    National  Bank and Trust  Company  of Chicago  and  Republic
                    Realty  Mortgage  Corporation.  [Exhibit  5 to  Registrant's
                    Report on Form 8-K dated April 1, 1985 (File No. 2-92889)].*

               (10.10)  Mortgage  Note  dated  May  18,  1976  between  American
                    National  Bank and Trust  Company  of Chicago  and  Republic
                    Realty Mortgage Company [Exhibit 6 to Registrant's Report on
                    Form 8-K dated April 1, 1985 (File No. 2-92889)].*

               (10.11) Mortgage  Agreement  dated May 18, 1976 between  American
                    National  Bank and Trust  Company  of Chicago  and  Republic
                    Realty  Mortgage  Corporation  [Exhibit  7  to  Registrant's
                    Report on Form 8-K dated April 1, 1985 (File No. 2-92889)].*

               (10.12)  Amended  HUD  Regulatory  Agreement  dated May 18,  1976
                    between American  National Bank and Trust Company of Chicago
                    and  Republic  Realty  Mortgage  Corporation  [Exhibit  8 to
                    Registrant's  Report on Form 8-K dated  April 1, 1985  (File
                    No. 2-92889)].*

               (10.13)  Consolidation  Agreement  dated  June 14,  1976  between
                    American Bank and Trust Company of Chicago, as Trustee,  and
                    Republic   Realty   Mortgage   Corporation   [Exhibit  9  to
                    Registrant's  Report on Form 8-K dated  April 1, 1985  (File
                    No. 2-92889)].*

               (10.14)  Property  Management  Agreement,  dated  April  1,  1985
                    between Krupp Realty Limited  Partnership-VII,  as Owner and
                    BRI OP  Limited  Partnership,  formerly  known as  Berkshire
                    Property  Management,   an  affiliate  of  Berkshire  Realty
                    Company,  Inc. [Exhibit 10.20 to Registrant's Report on Form
                    10-K  for  the  year  ended   October  31,  1985  (File  No.
                    2-92889)].*

               (10.15)  Promissory  Note dated July 30,  1997  between  American
                    National  Bank and  Trust  Company  of  Chicago  and  Reilly
                    Mortgage Group, Inc.*

               (10.16) Multifamily  Mortgage,  Assignment of Rents, and Security
                    Agreement dated July 30, 1997 between American National Bank
                    and Trust  Company of Chicago  and  Reilly  Mortgage  Group,
                    Inc.*

               *    Incorporated by reference


                                       12
<PAGE>


                                   SIGNATURES


     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the  undersigned,  thereunto  duly  authorized,  on the 1st day of
April, 2002.

                                       Krupp Realty Limited Partnership-VII
                                       ----------------------------------------
                                                    (Registrant)

                                   BY: The Krupp Corporation, a General Partner
                                       ----------------------------------------

                                   BY:  /s/ Douglas Krupp
                                       ----------------------------------------
                                       Douglas Krupp
                                       Co-Chairman (Principal Executive Officer)
                                       and Director of The Krupp Corporation

     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
report  has  been  signed  below  by the  following  persons  on  behalf  of the
registrant and in the capacities indicated, on the 1st day of April, 2002.

Signatures                                        Titles

/s/ Douglas Krupp                      Co-Chairman (Principal Executive Officer)
-----------------------------------     and Director of The  Krupp Corporation,a
Douglas Krupp                           General Partner.



/s/ George Krupp                       Co-Chairman (Principal Executive Officer)
-----------------------------------     and Director of the Krupp Corporation, a
George Krupp                            General Partner.



/s/ Frank Apeseche                     President of the Krupp Corporation, a
-----------------------------------     General Partner.
Frank Apeseche

/s/ David Quade                        Treasurer  (Principal  Financial   and
-----------------------------------     Accounting Officer) of the Krupp
David Quade                             Corporation, a General Partner.






                                       13
<PAGE>




















                                   APPENDIX A

              KRUPP REALTY LIMITED PARTNERSHIP-VII AND SUBSIDIARIES















                 CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULE
                               ITEM 8 OF FORM 10-K

             ANNUAL REPORT TO THE SECURITIES AND EXCHANGE COMMISSION
                      For the Year Ended December 31, 2001



                                      F-1
<PAGE>



              KRUPP REALTY LIMITED PARTNERSHIP-VII AND SUBSIDIARIES

             INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULE





Report of Independent Accountants                                          F-3


Consolidated Balance Sheets
 at December 31, 2001 and December 31, 2000                                F-4


Consolidated Statements of Operations
 for the Years Ended December 31, 2001, 2000 and 1999                F-5 - F-6


Consolidated Statements of Changes in Partners' Equity (Deficit)
 for the Years Ended December 31, 2001, 2000 and 1999                      F-7


Consolidated Statements of Cash Flows
 for the Years Ended December 31, 2001, 2000 and 1999                      F-8


Notes to Consolidated Financial Statements                           F-9 - F-16


Schedule III - Real Estate and Accumulated Depreciation                    F-17



All other schedules are omitted as they are not applicable, not required, or the
information is provided in the  consolidated  financial  statements or the notes
thereto.





                                      F-2
<PAGE>












                        REPORT OF INDEPENDENT ACCOUNTANTS




To the Partners of
Krupp Realty Limited Partnership-VII and Subsidiaries:


     In  our  opinion,  the  consolidated  financial  statements  listed  in the
accompanying  index  present  fairly,  in all material  respects,  the financial
position  of  Krupp  Realty  Limited   Partnership-VII   and  Subsidiaries  (the
"Partnership")  at  December  31,  2001  and  2000,  and the  results  of  their
operations  and their cash flows for each of the three years in the period ended
December 31, 2001 in conformity with accounting principles generally accepted in
the United  States of  America.  In  addition,  in our  opinion,  the  financial
statement  schedule listed in the  accompanying  index presents  fairly,  in all
material  respects,  the  information set forth therein when read in conjunction
with the related consolidated  financial statements.  These financial statements
and financial  statement  schedule are the  responsibility  of the Partnership's
management;  our  responsibility  is to express  an  opinion on these  financial
statements and financial  statement  schedule based on our audits.  We conducted
our audits of these statements in accordance with auditing  standards  generally
accepted in the United States of America, which require that we plan and perform
the audit to obtain reasonable  assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence  supporting the amounts and  disclosures  in the financial  statements,
assessing the  accounting  principles  used and  significant  estimates  made by
management,  and evaluating the overall  financial  statement  presentation.  We
believe that our audits provide a reasonable basis for our opinion.

     As explained in Note A, the Partnership  implemented a liquidation  plan to
dispose of the remaining real estate assets of the Partnership.  At December 31,
2001, the  Partnership  has completed its  disposition of its real estate assets
and expects to complete the  liquidation  and  dissolution of the Partnership in
2002. As such, at December 31, 2001, the Partnership has adopted the liquidation
basis of accounting.

/s/ PricewaterhouseCoopers LLP

Boston, Massachusetts
March 26, 2002



                                      F-3
<PAGE>


              KRUPP REALTY LIMITED PARTNERSHIP-VII AND SUBSIDIARIES

                  CONSOLIDATED BALANCE SHEETS (In Liquidation)
                           December 31, 2001 and 2000


                                     ASSETS

                                                2001              2000
                                            -------------    -------------
Multi-family apartment complexes, net of
  accumulated depreciation
  of $0 and $15,671,250, respectively
  (Note F)                                  $           -    $   7,766,297
Cash and cash equivalents (Note C)              8,968,487          456,851

Cash restricted for tenant security
  deposits                                              -           27,800
Replacement reserve escrow (Note F)                     -           56,043
Due from affiliates (Note I)                       28,737           31,115
Prepaid expenses and other assets                  48,499          476,014
Investment in securities                                -           65,340
Deferred expenses, net of accumulated
  amortization of $0 and $210,020,
  respectively                                          -          105,632
                                            -------------    -------------
         Total assets                       $   9,045,723    $   8,985,092
                                            =============    =============

                   LIABILITIES AND PARTNERS' EQUITY (DEFICIT)

Liabilities:
  Mortgage notes payable (Notes E and F)    $           -    $  10,107,446
  Accrued expenses and other liabilities
   (Note G)                                       103,342          717,537
                                            -------------    -------------
         Total liabilities                        103,342       10,824,983

Commitment (Note H)

Partners' equity (deficit) (Note H):
  Investor Limited Partners (27,184 Units
   outstanding)                                 8,852,957         (946,178)
  Original Limited Partner                              -         (569,931)
  General Partners                                 89,424         (323,782)
                                            -------------    -------------
         Total partners' equity (deficit)       8,942,381       (1,839,891)
                                            -------------    -------------
         Total liabilities and partners'
           equity (deficit)                 $   9,045,723    $   8,985,092
                                            =============    =============


               The accompanying notes are an integral part of the
                       consolidated financial statements.




                                      F-4
<PAGE>



              KRUPP REALTY LIMITED PARTNERSHIP-VII AND SUBSIDIARIES

             CONSOLIDATED STATEMENTS OF OPERATIONS (In Liquidation)
              For the Years Ended December 31, 2001, 2000 and 1999


                                         2001           2000           1999
                                     ------------   ------------   ------------
Revenue:
     Rental                          $  3,312,178   $  4,184,217   $  3,970,170
     Interest income                       58,390         18,534         27,447
                                     ------------   ------------   ------------

         Total revenue                  3,370,568      4,202,751      3,997,617
                                     ------------   ------------   ------------

Expenses:
  Operating (Notes E and I)               892,526      1,045,932      1,010,972
  Maintenance                             294,118        321,259        341,331
  Real estate taxes                       367,532        418,345        428,806
  General and administrative (Note I)     282,316        197,064        176,664
  Management fees (Note I)                166,052        185,038        157,467
  Depreciation and amortization         1,013,097      1,444,361      1,552,134
  Interest (Note F)                       701,965        870,240        879,470
                                     ------------   ------------   ------------

         Total expenses                 3,717,606      4,482,239      4,546,844

Loss before gain on sale of
  properties and extraordinary
  loss from early extinguishment
  of debt                                (347,038)      (279,488)      (549,227)

Gain on sale of properties (Note E)    17,780,327              -              -
                                     ------------   ------------   ------------

Income (loss) before extraordinary
  loss from early
  extinguishment of debt               17,433,289       (279,488)      (549,227)

Extraordinary loss from early
  extinguishment of debt                  (90,922)             -              -
                                     ------------   ------------   ------------

Net income (loss) (Note J)           $ 17,342,367   $   (279,488)  $   (549,227)
                                     ============   ============   ============



                                    Continued

               The accompanying notes are an integral part of the
                       consolidated financial statements.




                                      F-5
<PAGE>

              KRUPP REALTY LIMITED PARTNERSHIP-VII AND SUBSIDIARIES

        CONSOLIDATED STATEMENTS OF OPERATIONS (In Liquidation), Continued
              For the Years Ended December 31, 2001, 2000 and 1999

                                         2001           2000           1999
                                     ------------   ------------   ------------
Allocation of net income (loss)
  (Note H):

  Investor Limited Partners
    (27,184 Units outstanding):
      Loss before gain on sale of
        properties and
        extraordinary loss           $ (1,268,551)  $   (276,693)  $   (543,735)
      Gain on sale of properties       17,602,524              -              -
      Extraordinary loss from early
        extinguishment of
        debt                              (90,013)             -              -
                                     ------------   ------------   ------------
      Net income (loss)              $ 16,243,960   $   (276,693)  $   (543,735)
                                     ============   ============   ============

  Investor Limited Partners, Per Unit:
      Loss before gain on sale of
        properties and
        extraordinary loss           $     (46.66)  $     (10.18)  $     (20.00)
      Gain on sale of properties           647.53              -              -
      Extraordinary loss from early
        extinguishment of
        debt                                (3.31)             -              -
                                     ------------   ------------   ------------
      Net income (loss)              $     597.56   $     (10.18)  $     (20.00)
                                     ============   ============   ============

  Original Limited Partner:
      Loss before gain on sale of
        properties and
        extraordinary loss           $    614,081   $          -   $          -
      Gain on sale of properties                -              -              -
      Extraordinary loss from early
        extinguishment of
        debt                                    -              -              -
                                     ------------   ------------   ------------
      Net income (loss)              $    614,081   $          -   $          -
                                     ============   ============   ============

  General Partners:
      Loss before gain on sale of
        properties and
        extraordinary loss           $    307,432   $     (2,795)  $     (5,492)
      Gain on sale of properties          177,803              -              -
      Extraordinary loss from early
        extinguishment of
        debt                                 (909)             -              -
                                     ------------   ------------   ------------
      Net income (loss)              $    484,326   $     (2,795)  $     (5,492)
                                     ============   ============   ============


               The accompanying notes are an integral part of the
                       consolidated financial statements.




                                      F-6
<PAGE>



              KRUPP REALTY LIMITED PARTNERSHIP-VII AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS'EQUITY (DEFICIT) (In Liquidation)
              For the Years Ended December 31, 2001, 2000 and 1999

                                                                   Total
                     Investor       Original                       Partners'
                     Limited        Limited        General         Equity/
                     Partners       Partner        Partners        (Deficit)
                     -----------    -----------    ------------    ------------
Balance at
   December 31, 1998 $   867,955    $  (481,602)   $  (293,412)    $     92,941

Net loss                (543,735)             -          (5,492)       (549,227)

Distributions           (496,853)       (44,165)        (11,041)       (552,059)
                     -----------    -----------    ------------    ------------
Balance at
   December 31, 1999    (172,633)      (525,767)       (309,945)     (1,008,345)

Net loss                (276,693)             -          (2,795)       (279,488)

Distributions           (496,852)       (44,164)        (11,042)       (552,058)
                     -----------    -----------    ------------    ------------
Balance at
   December 31, 2000    (946,178)      (569,931)       (323,782)     (1,839,891)

Net income            16,243,960        614,081         484,326      17,342,367

Distributions         (6,444,825)       (44,150)        (71,120)     (6,560,095)
                     -----------    -----------    ------------    ------------
Balance at
   December 31, 2001 $ 8,852,957    $         -    $     89,424    $  8,942,381
                     ===========    ===========    ============    ============


The per Unit  distributions  for each of the years ended December 31, 2001, 2000
and 1999 was $237.08, $18.28 and $18.28 , respectively, of which $218.80, $0 and
$0 represented a return of capital, respectively.
















               The accompanying notes are an integral part of the
                       consolidated financial statements.




                                      F-7
<PAGE>


              KRUPP REALTY LIMITED PARTNERSHIP-VII AND SUBSIDIARIES

             CONSOLIDATED STATEMENTS OF CASH FLOWS (In Liquidation)
              For the Years Ended December 31, 2001, 2000 and 1999


                                         2001           2000           1999
                                     ------------   ------------   ------------
Cash flows from operating activities:
     Net income (loss)               $ 17,342,367   $   (279,488)  $   (549,227)
     Adjustments to reconcile net
      income (loss) to net
       cash provided by operating
        activities:
         Depreciation and
          amortization                  1,013,097      1,444,361      1,552,133
         Gain on sale of properties   (17,780,327)             -              -
         Extraordinary loss from
          early retirement of debt         90,922              -              -
         Impairment of securities          65,340              -              -
         Changes in assets and
          liabilities:
           Decrease (increase) in
            restricted cash for
            tenant security deposits       27,800           (544)          (650)
           Decrease (increase) in
            prepaid expenses and
            other assets and due from
            affiliates                    429,893        155,895        (59,107)
           Increase (decrease) in
            accrued expenses and
            other liabilities            (614,195)        28,811         68,729
           Interest earned on
            replacement reserve
            escrow                              -           (787)        (1,023)
                                     ------------   ------------   ------------

               Net cash provided by
                operating activities      574,897      1,348,248      1,010,855
                                     ------------   ------------   ------------

Cash flows from investing activities:
     Deposits to replacement reserve
       escrow                             (29,922)       (50,400)       (50,400)
     Withdrawals from replacement
       reserve escrow                      85,965         67,522            205
     Additions to fixed assets           (371,451)      (362,176)      (812,887)
     Decrease in accrued expenses and
       other liabilities related to
       fixed asset additions                    -         (2,204)        (1,296)
     Proceeds from sale of property,
       net                             19,843,735              -              -
                                     ------------   ------------   ------------

               Net cash provided by
                (used in) investing
                activities             19,528,327       (347,258)      (864,378)
                                     ------------   ------------   ------------

Cash flows from financing activities:
     Principal payments on mortgage
       notes payable                      (86,478)      (112,606)      (103,376)
     Repayment of mortgage notes
       payable                         (4,945,015)             -              -
     Distributions                     (6,560,095)      (552,058)      (552,059)
                                     ------------   ------------   ------------

               Net cash used in
                financing activities  (11,591,588)      (664,664)      (655,435)
                                     ------------   ------------   ------------

Net increase (decrease) in cash and
  cash equivalents                      8,511,636        336,326       (508,958)
Cash and cash equivalents, beginning
  of year                                 456,851        120,525        629,483
                                     ------------   ------------   ------------
Cash and cash equivalents, end
  of year                            $  8,968,487   $    456,851   $    120,525
                                     ============   ============   ============

Non-cash investing and financing
  activities:
     Investment in securities        $          -   $     65,340   $          -
     Assumption of mortgage note
      payable                        $ (5,075,953)  $          -   $          -


               The accompanying notes are an integral part of the
                       consolidated financial statements.



                                      F-8
<PAGE>

              KRUPP REALTY LIMITED PARTNERSHIP-VII AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (In Liquidation)
                                   ----------

A.   Organization

     Krupp Realty Limited Partnership-VII  ("KRLP-VII") was formed on August 21,
     1984 by filing a Certificate of Limited  Partnership in the Commonwealth of
     Massachusetts.  KRLP-VII  terminates  on December  31, 2025 unless  earlier
     terminated  upon the  occurrence  of  certain  events  as set  forth in the
     Partnership Agreement. KRLP-VII issued all of the General Partner Interests
     to  two  General   Partners,   The  Krupp   Corporation,   a  Massachusetts
     corporation, and The Krupp Company Limited Partnership-II,  a Massachusetts
     limited  partnership,  in exchange  for capital  contributions  aggregating
     $1,000. In addition,  the General Partners were required to make additional
     capital  contributions  of $135,891 which were used to pay organization and
     offering  costs in  excess  of 5% of the gross  proceeds  of the  offering.
     Except under certain limited  circumstances  upon  termination of KRLP-VII,
     the General Partners are not required to make any other additional  capital
     contributions.

     KRLP-VII also issued all of the Original  Limited Partner  Interests to The
     Krupp Company Limited Partnership-II in exchange for a capital contribution
     of $4,000.

     On November 2, 1984,  KRLP-VII  commenced an offering of up to 40,000 units
     of Investor Limited Partner Interest (the "Units") for $1,000 per Unit. The
     public  offering was closed on April 25,  1986,  at which time 27,184 Units
     had been sold for $27,184,000.

     On December 19, 1984 the General  Partners  formed Krupp Realty  Courtyards
     Limited Partnership ("Realty-VII") as a prerequisite for the refinancing of
     Courtyards  Village East  Apartments  ("Courtyards  Village").  At the same
     time, the General Partners  transferred  ownership of Courtyards Village to
     Realty-VII.  The General  Partner of  Realty-VII  is KRLP-VII.  The Limited
     Partners of  Realty-VII  are  KRLP-VII  and The Krupp  Corporation  ("Krupp
     Corp.").  Krupp Corp. has beneficially  assigned its interest in Realty-VII
     to KRLP-VII.

     On March 31, 1994, the General  Partners  formed Windsor  Partners  Limited
     Partnership  ("Windsor  L.P.") as a  prerequisite  for the  refinancing  of
     Windsor  Apartments.  At the same time,  the General  Partners  transferred
     ownership of the  property to Windsor  L.P. In exchange  for the  property,
     KRLP-VII  received a 99% Limited  Partnership  interest in Windsor L.P. The
     General Partner of Windsor L.P. is ST. Windsor  Corporation  which has a 1%
     interest in Windsor L.P. and is 100% owned by KRLP-VII.

     KRLP-VII,  Realty-VII  and Windsor  L.P.  are  collectively  known as Krupp
     Realty Limited  Partnership-VII and Subsidiaries  (collectively referred to
     herein as the "Partnership").

     As  described in Note E, the  Partnership  sold its  remaining  real estate
     investments  in 2001 and intends to liquidate the  Partnership's  remaining
     assets, distribute its remaining cash and dissolve the Partnership in 2002.


                                    Continued




                                      F-9
<PAGE>

              KRUPP REALTY LIMITED PARTNERSHIP-VII AND SUBSIDIARIES

      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(In Liquidation), Continued
                                   ----------

B.   Significant Accounting Policies

     The  Partnership  uses the  following  accounting  policies  for  financial
     reporting  purposes,  which may differ in certain  respects from those used
     for federal income tax purposes (see Note J):

          Basis of Presentation

          The consolidated financial statements present the consolidated assets,
          liabilities   and  operations  of  Realty-VII  and  Windsor  L.P.  All
          intercompany balances and transactions have been eliminated.

          In connection with its adoption of a liquidation plan during 2001, the
          Partnership  adopted the liquidation basis of accounting which,  among
          other specifications, requires that assets be stated at net realizable
          value and that a net loss during the  liquidation  period,  if any, be
          accrued.   Management   believes   there  is   currently  no  material
          liquidation period losses that require accrual.

          The  accompanying  financial  statements  have  been  prepared  on the
          accrual basis of accounting in accordance with  accounting  principles
          generally accepted in the United States of America.

          Risks and Uncertainties

          The preparation of financial  statements in conformity with accounting
          principals generally accepted in the United States of America requires
          management to make estimates and assumptions  that affect the reported
          amount of assets and  liabilities,  contingent  assets and liabilities
          and revenues and expenses during the reporting period.  Actual results
          could differ from those estimates.

          The  Partnership  invests its cash  primarily  in  deposits  and money
          market  funds  with   commercial   banks.   The  Partnership  has  not
          experienced any losses to date on its invested cash.

          Cash and Cash Equivalents

          The  Partnership  includes all  short-term  investments  with original
          maturities  of three  months or less from the date of  acquisition  in
          cash and cash equivalents.  The cash investments are recorded at cost,
          which approximates market values.

          Rental Revenue

          Residential  leases require the advance  payment of monthly base rent.
          Rental revenue are recorded on the accrual basis.

          Real Estate Assets

          Real  estate  assets and  equipment  are stated at  depreciated  cost.
          Pursuant to Financial  Accounting  Standards Board's Statement No. 121
          "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
          Assets  to  be  Disposed  of,"  impairment   losses  are  recorded  on
          long-lived  assets used in operations on a property by property basis,
          when events and  circumstances  indicate  that the real estate  assets
          might be impaired and the estimated  undiscounted cash flows,  without
          interest  charges,  to be  generated by those assets are less than the
          carrying amount of those assets. Upon determination that an impairment
          has  occurred,  those  assets  shall be  reduced  to fair  value  less
          estimated costs to sell.


                                    Continued


                                      F-10
<PAGE>
              KRUPP REALTY LIMITED PARTNERSHIP-VII AND SUBSIDIARIES

      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(In Liquidation), Continued

B.    Significant Accounting Policies, Continued


          Real Estate Assets, Continued

          Expenditures  for  ordinary  maintenance  and repairs are  expensed to
          operations  as  they  are  incurred.   Significant   renovations   and
          improvements which improve or extend the useful life of the assets are
          capitalized.  Except for amounts  attributed to land,  rental property
          and  improvements  are depreciated  over their estimated  useful lives
          using the  straight-line  method.  The estimated useful lives by asset
          category are:

                  Buildings and improvements                   3 to 25 years

                  Equipment, furnishings and fixtures          3 to 8  years

          Realized  gains  and  losses  from  sale of  real  estate  assets  are
          recognized  when the  sale is  consummated,  the  earning  process  is
          complete,  and the Partnership  does not have  substantial  continuing
          involvement with the property.

          Deferred Expenses

          Costs of obtaining and recording mortgages are amortized over the term
          of the related  mortgage  notes using the  straight-line  method which
          approximates the effective interest method.

          Income Taxes

          The Partnership is not liable for federal or state income taxes as the
          Partnership income or loss is allocated to the Partners for income tax
          purposes. In the event that the Partnership's tax returns are examined
          by the  Internal  Revenue  Service or state taxing  authority  and the
          examination  results in a change in the Partnership  taxable income or
          loss, such change will be reported to the Partners.

          Descriptive Information About Reportable Segments

          The Partnership  operated and developed  apartment  communities  which
          generated  rental and other  income  through the leasing of  apartment
          units.  The General Partners  separately  evaluated the performance of
          each of the Partnership's apartment communities. However, because each
          of the apartment  communities  has similar  economic  characteristics,
          facilities,  services and tenants, the apartment communities have been
          aggregated into a single dominant apartment communities segment.

          All revenue are from  external  customers and no revenue are generated
          from  transactions  with  other  segments.  There are no  tenants  who
          contributed  10% or more of the  Partnership's  total  revenue  during
          2001, 2000 or 1999.

          Investment in Securities

          Investment in securities is carried at its original issuance valuation
          as the common  stock is not listed or traded on an exchange and is not
          considered  a marketable  security  pursuant to Statement of Financial
          Accounting   Standards  Opinion  No.  115,   "Accounting  for  Certain
          Investments in Debt and Equity Securities" ("FAS 115").


                                    Continued

                                      F-11
<PAGE>
              KRUPP REALTY LIMITED PARTNERSHIP-VII AND SUBSIDIARIES

      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(In Liquidation), Continued

C.   Cash and Cash Equivalents

     Cash and cash  equivalents  at December 31, 2001 and 2000  consisted of the
     following:

                                                 2001             2000
                                            -------------    -------------

     Cash and money market accounts         $   8,968,487    $     456,851
                                            =============    =============

D.   Investment in Securities

     On October 5, 2000,  the  Partnership,  as a member of an alliance of major
     multi-family  real  estate  companies,  executed a master  lease  agreement
     ("MLA") with a provider of high-speed internet, video and voice services to
     multi-family communities.  Pursuant to the MLA, the Partnership granted the
     provider  preferred  lease,  license  and  access  rights to  provide  data
     services,  consisting of  high-speed  broadband  internet  access and video
     services,  to the residents at some of its  multi-family  communities for a
     ten-year  period.  In exchange for these rights,  the Partnership  received
     250,843  shares of common  stock,  which were valued at $.2285 per share or
     $57,341.  In  addition,  the  Partnership  will  receive  7.5% of the gross
     revenues that the provider obtains from providing its services as well as a
     fixed amount for each  resident that  executes a subscriber  agreement.  In
     conjunction  with  the  execution  of the  MLA,  the  Partnership  made  an
     investment  of $5,751 in exchange  for 25,164  additional  shares of common
     stock  also  valued  at  $.2285  per  share.   The   Partnership   incurred
     approximately  $2,248 in closing  costs related to the  acquisition  by the
     Partnership  and the closing costs  incurred were recorded as an investment
     in securities in the financial statements as of December 31, 2000.

     On November 20, 2001, concurrent with the sale of the Partnership remaining
     multi-family apartment community,  the General Partners determined that the
     MLA and the related common stock were  worthless.  The loss associated with
     the write-off of these assets was  approximately  $8,000 and is included in
     operating expenses on the Consolidated Statement of Operations for the year
     ended December 31, 2001.

E.   Sale of Property

     On August 29, 2001, the Partnership sold Courtyards Village  Apartments,  a
     224-unit multi-family apartment community, located in Naperville, Illinois,
     to an unaffiliated third party. The Partnership received $7,608,399, net of
     closing costs of $83,648 and debt of $5,075,953  assumed by the buyer,  and
     repaid accrued interest of $30,106.  For financial reporting purposes,  the
     Partnership  realized  a gain of  $9,166,649  on the  sale.  The  gain  was
     calculated as the difference  between the property's selling price less net
     book value of the property and closing costs.

     On November 20, 2001, the Partnership sold Windsor  Apartments  ("Windsor")
     to  an  unaffiliated  third  party.  Windsor  is  a  300-unit  multi-family
     apartment located in Garland,  Texas. The Partnership received $12,235,336,
     less payoff of closing  costs of $80,518 and payment of the  mortgage  note
     payable  and accrued  interest  of  $4,971,598.  A gain of  $8,613,678  was
     realized on the sale for financial reporting purposes, which was calculated
     as the difference  between the property's selling price less net book value
     of the property and closing costs.


                                    Continued

                                      F-12
<PAGE>
              KRUPP REALTY LIMITED PARTNERSHIP-VII AND SUBSIDIARIES

      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(In Liquidation), Continued

F.   Mortgage Notes Payable

     The  properties  that  were  owned  by  the  Partnership  were  pledged  as
     collateral   for  the  respective   non-recourse   mortgage  notes  payable
     outstanding at December 31, 2000.  Mortgage notes payable  consisted of the
     following:



                             Principal                Annual
                     --------------------------      Interest        Maturity
      Property          2001            2000           Rate            Date
     --------------- -----------    -----------    ------------    ------------

     Courtyards
      Village
      Apartments     $         -    $ 5,109,846         7.88%    August 1, 2007

     Windsor
      Apartments     $         -      4,997,600         9.25%       May 1, 2001
                     -----------    -----------

          Total      $         -    $10,107,446
                     ===========    ===========

          Courtyards Village

          Concurrent with the sale of Courtyards Village,  the mortgage note was
          assumed by the buyer on August 29, 2001.

          On July 30, 1997, the  Partnership  refinanced the Courtyards  Village
          mortgage  note.   The  property  was  refinanced   with  a  $5,280,000
          non-recourse mortgage note payable at the rate of 7.88% per annum with
          monthly principal and interest payments of $38,302. The mortgage note,
          which was  collateralized by the property,  was scheduled to mature on
          August 1, 2007 at which time the  remaining  principal  (approximately
          $4,658,637)  and any accrued  interest  would have been due.  The note
          could be prepaid, subject to a prepayment premium, at any time with 30
          days notice.  The  Partnership  used the majority of the proceeds from
          the refinancing to repay the existing mortgage note on the property of
          $3,172,809,  pay closing  costs of $136,040 and to  establish  various
          escrows.  As part of the refinancing,  the Partnership was required to
          establish a $9,525 repair escrow and a replacement reserve escrow. The
          replacement  reserve escrow  required no initial  deposit at the close
          and monthly deposits of $4,200 which began on September 1, 1998.

          Windsor Apartments

          Concurrent  with the sale of Windsor  Apartments,  the  mortgage  note
          payable was repaid in full on November 20, 2001.

          On April 27, 2001, the General Partners signed an agreement  extending
          the mortgage note payable on Windsor Apartments, under original terms,
          until May 1, 2002.  The  Partnership  paid an extension fee of $24,962
          for  this  privilege.  The  property  was  subject  to a  non-recourse
          mortgage note payable in the original amount of $5,300,000, based on a
          30-year  amortization  and  payable  at the rate of 9.25% per annum in
          equal  monthly  installments  of $43,602,  consisting of principal and
          interest. At maturity, all unpaid principal, approximately $5,021,000,
          and any accrued interest would have been due.

     The Partnership paid interest on its borrowings in the amounts of $701,965,
     $870,240,  and $879,470  during the years ended December 31, 2001, 2000 and
     1999, respectively.


                                    Continued




                                      F-13
<PAGE>
              KRUPP REALTY LIMITED PARTNERSHIP-VII AND SUBSIDIARIES

      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(In Liquidation), Continued

G.   Accrued Expenses and Other Liabilities

     Accrued  expenses  and other  liabilities  consisted  of the  following  at
     December 31, 2001 and 2000:

                                                 2001             2000
                                            -------------    -------------

        Accounts payable                    $       2,973    $       8,338
        Accrued real estate taxes                       -          419,230
        Other liabilities                         100,369          203,556
        Tenant security deposits                        -           57,461
        Prepaid rent                                    -           28,952
                                            -------------    -------------

                                            $     103,342    $     717,537
                                            =============    =============

H.   Partners' Equity

     Under the terms of the  Partnership  Agreement,  losses from operations are
     allocated  99% to  the  Investor  Limited  Partners  and 1% to the  General
     Partners. Profits from operations are allocated 90% to the Investor Limited
     Partners,  8% to  the  Original  Limited  Partner  and  2% to  the  General
     Partners,  until such time that the Investor Limited Partners have received
     a return of their total  invested  capital  plus a 9% per annum  cumulative
     return thereon and thereafter, 69% to the Investor Limited Partners, 25% to
     the Original Limited Partner and 6% to the General Partners.

     Under the terms of the Partnership  Agreement,  cash distributions are made
     on the same basis as the allocations of profits  described above.  Pursuant
     to the  Partnership  Agreement,  proceeds from Capital  Transactions  shall
     first be  applied  to the  payment  of all  debts  and  liabilities  of the
     Partnership  and second to fund reserves for  contingent  liabilities.  The
     remaining net cash proceeds will then be allocated and  distributed  99% to
     the Investor  Limited  Partners  until they have received a return of their
     total invested capital plus a 9% per annum cummulative return and 1% to the
     General  Partners,  thereafter  net cash  proceeds will be  distributed  in
     accordance with the Partnership Agreement.

     The  Partnership  entered  into a Sales  Agent  Agreement  for  the  public
     offering of Units.  Under that  Agreement,  the Partnership was required to
     pay to the sales  agent  underwriting  commissions  and  related  financial
     consulting  fees equal to 9% of the gross  proceeds from the  offering.  In
     addition, the sales agent will be entitled to receive, over the life of the
     Partnership,  a  subordinated  financial  consulting fee based upon the net
     cash  proceeds  received  by the  Partnership  as a  result  of  sales  and
     refinancings of Partnership properties, which fee shall be in an amount not
     exceeding 1.5% of the gross proceeds of the offering of Units. No such fees
     will,  however,  be payable  unless and until all Partners  have received a
     return of their  Invested  Capital and the Investor  Limited  Partners have
     received a 9% per annum cumulative  return. The Partnership does not expect
     to incur any subordinated financial consulting fees.



                                   Continued

                                      F-14
<PAGE>
              KRUPP REALTY LIMITED PARTNERSHIP-VII AND SUBSIDIARIES

      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(In Liquidation), Continued

H.   Partners' Equity, Continued

     As of December 31, 2001, the following cumulative partner contributions and
     allocations have been made since the inception of the Partnership:

                                                                   Total
                     Investor       Original                       Partners'
                     Limited        Limited        General         Equity/
                     Partners       Partner        Partners        (Deficit)
                     -----------    -----------    ------------    ------------

     Capital
      contributions  $27,184,000    $     4,000    $    136,891    $ 27,324,891
     Syndication
      costs           (3,697,375)             -        (135,891)     (3,833,266)
     Distributions:
       Operation      (6,962,887)      (618,922)       (154,730)     (7,736,539)
       Capital
        transaction   (8,289,769)             -         (83,460)     (8,373,229)
     Income (loss):
       Operations    (16,836,322)       614,922         150,298     (16,071,102)
       Capital
        transaction   17,455,310              -         176,316      17,631,626
                     -----------    -----------    ------------    ------------
     Balance at
       December 31,
       2001          $ 8,852,957    $         -    $     89,424    $  8,942,381
                     ===========    ===========    ============    ============

I.   Related Party Transactions

     The  Partnership  pays  property  management  fees to an  affiliate  of the
     General  Partners  for  management  services.  Pursuant  to the  management
     agreements,  management  fees are payable  monthly at a rate of 5% of gross
     receipts from residential properties under management. The Partnership also
     reimburses affiliates of the General Partners for certain expenses incurred
     in connection  with the  operation of the  Partnership  and its  properties
     including administrative expenses.

     Amounts  accrued or paid to the  General  Partners'  affiliates  during the
     years ended December 31, 2001, 2000 and 1999 were as follows:

                                         2001           2000           1999
                                     ------------   ------------   ------------
        Property management fees     $    166,052   $    185,038   $    157,467
        Expense reimbursements            313,823        203,128        196,973
                                     ------------   ------------   ------------

          Charged to operations      $    479,875   $    388,166   $    354,440
                                     ============   ============   ============

     Expense  reimbursements  due from  affiliates  of $28,737 and $31,115  were
     included  in  due  from   affiliates   at  December   31,  2001  and  2000,
     respectively.

                                   Continued

                                      F-15
<PAGE>
              KRUPP REALTY LIMITED PARTNERSHIP-VII AND SUBSIDIARIES

      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(In Liquidation), Continued

J.   Federal Income Taxes

     For federal income tax purposes,  the Partnership is depreciating  property
     using the  Accelerated  Cost  Recovery  System  ("ACRS")  and the  Modified
     Accelerated   Cost  Recovery  System   ("MACRS")   depending  on  which  is
     applicable.

     The  reconciliation  of the net income (loss) reported in the  accompanying
     Consolidated Statement of Operations with the net income (loss) reported in
     the  Partnership's  federal  income tax return for the years ended December
     31, 2001, 2000 and 1999 is as follows:

                                         2001           2000           1999
                                     ------------   ------------   ------------
     Net income (loss) per
      Consolidated Statement of
      Operations                     $ 17,342,367   $   (279,488)  $   (549,227)

          Difference in book and tax
           depreciation and
           amortization                   616,820        432,720        215,924

          Difference between book and
           tax gain on sale
           of property                  1,752,185              -              -

          Bonus and Severance Pay         (44,230)             -              -

          Rental adjustment required
           by generally accepted
           accounting principles           (4,697)        (4,246)          (399)
                                     ------------   ------------   ------------

     Net income (loss) for federal
      income tax purposes            $ 19,662,445   $    148,986   $   (333,702)
                                     ============   ============   ============


     The allocation of the net income for federal income tax purposes for the
year ended December 31, 2001 is as follows:

                                      Portfolio       Passive
                                        Income         Income          Total
                                     ------------   ------------   ------------

     Investor Limited Partners       $     52,550   $ 18,459,523   $ 18,512,073
     Original Limited Partner               4,670        598,349        603,019
     General Partners                       1,167        546,186        547,353
                                     ------------   ------------   ------------
                                     $     58,387   $ 19,604,058   $ 19,662,445
                                     ============   ============   ============


     For the years ended  December  31,  2001,  2000 and 1999,  the per Unit net
     income  (loss) to the  Investor  Limited  Partners  for federal  income tax
     purposes was $681.00, $4.93 and $(12.15), respectively.

     The basis of the  Partnership's  assets for  financial  reporting  purposes
     exceeds its tax basis by  approximately  $97,000 and $1,193,000 at December
     31, 2001 and 2000, respectively. The basis of the Partnership's liabilities
     for financial  reporting  purposes  exceeds its tax basis by  approximately
     $22,000  at  December   31,  2001  and  is  less  than  its  tax  basis  by
     approximately $3,483,000 at December 31, 2000.



                                      F-16
<PAGE>

              KRUPP REALTY LIMITED PARTNERSHIP-VII AND SUBSIDIARIES

             SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION

                                December 31, 2001
                                   ----------

Reconciliation of Real Estate and Accumulated Depreciation for each of the three
years in the period ended December 31, 2001:

                                         2001           2000           1999
                                     ------------   ------------   ------------

Real Estate

  Balance at beginning of year       $ 23,437,547   $ 23,075,371   $ 22,262,484

  Acquisition and improvements            371,451        362,176        812,887

  Sale of property                    (23,808,998)             -              -
                                     ------------   ------------   ------------

  Balance at end of year             $          -   $ 23,437,547   $ 23,075,371
                                     ============   ============   ============



                                         2001           2000           1999
                                     ------------   ------------   ------------

Accumulated Depreciation

  Balance at beginning of year       $ 15,671,250   $ 14,265,488   $ 12,751,953

  Depreciation expense                    998,388      1,405,762      1,513,535

  Sale of property                    (16,669,638)             -              -
                                     ------------   ------------   ------------

  Balance at end of year             $          -   $ 15,671,250   $ 14,265,488
                                     ============   ============   ============


The  aggregate  cost of the  Partnership's  real estate for  federal  income tax
purposes is $0 and the aggregate accumulated depreciation for federal income tax
purposes is $0.


                                      F-17