UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                   Form 10-KSB
(Mark One)
[X]   ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
      OF 1934

                 For the fiscal year ended December 31, 2004

[ ]   TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
      ACT OF 1934

             For the transition period from _________to _________

                         Commission file number 0-14369

                   SHELTER PROPERTIES VII LIMITED PARTNERSHIP
                 (Name of small business issuer in its charter)

      South Carolina                                        57-0784852
(State or other jurisdiction of                         (I.R.S. Employer
 incorporation or organization)                        Identification No.)

                          55 Beattie Place, PO Box 1089
                        Greenville, South Carolina 29602
                    (Address of principal executive offices)

                            Issuer's telephone number
                                 (864) 239-1000

        Securities registered under Section 12(b) of the Exchange Act:

                                      None

        Securities registered under Section 12(g) of the Exchange Act:

                      Units of Limited Partnership Interest
                                (Title of class)

Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Exchange  Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports),  and (2) has been
subject to such filing requirements for the past 90 days.
Yes X  No___

Check if there is no disclosure  of delinquent  filers in response to Item 405
of  Regulation  S-B  contained  in  this  form,  and  no  disclosure  will  be
contained,  to the best of the Partnership's  knowledge in definitive proxy or
information  statements  incorporated  by  reference  in Part III of this Form
10-KSB or any amendment to this Form 10-KSB. [X]

State issuer's revenues for its most recent fiscal year.  $1,429,000

State the aggregate  market value of the voting  partnership  interests  held by
non-affiliates  computed  by  reference  to the price at which  the  partnership
interests  were sold,  or the average bid and asked  prices of such  partnership
interests as of December 31, 2004. No market exists for the limited  partnership
interests of the Registrant;  and,  therefore,  no aggregate market value can be
determined.

                       DOCUMENTS INCORPORATED BY REFERENCE
                                      NONE

The matters discussed in this report contain certain forward-looking statements,
including, without limitation, statements regarding future financial performance
and the effect of government  regulations.  Actual results may differ materially
from those described in the forward-looking statements and will be affected by a
variety of risks and factors including,  without limitation:  national and local
economic  conditions;  the terms of  governmental  regulations  that  affect the
Registrant and interpretations of those regulations; the competitive environment
in which the Registrant operates;  financing risks, including the risk that cash
flows from operations may be insufficient to meet required payments of principal
and interest;  real estate risks, including variations of real estate values and
the general  economic  climate in local markets and  competition  for tenants in
such markets;  litigation,  including  costs  associated  with  prosecuting  and
defending  claims  and  any  adverse   outcomes,   and  possible   environmental
liabilities.   Readers  should  carefully  review  the  Registrant's   financial
statements and the notes thereto,  as well as the risk factors  described in the
documents  the  Registrant  files  from  time to time  with the  Securities  and
Exchange Commission.

                                     PART I

Item 1.     Description of Business

Shelter  Properties VII (the  "Partnership" or "Registrant")  was organized as a
limited partnership under the laws of the State of South Carolina on October 29,
1984.  The general  partner  responsible  for  management  of the  Partnership's
business is Shelter Realty VII  Corporation,  a South Carolina  corporation (the
"Corporate General  Partner").  The Corporate General Partner is a subsidiary of
Apartment  Investment and Management Company  ("AIMCO"),  a publicly traded real
estate investment trust. The other general partner is AIMCO Properties, L.P., an
affiliate of the Corporate General Partner and AIMCO. The Partnership  Agreement
provides  that the  Partnership  is to  terminate  on  December  31, 2024 unless
terminated prior to such date.

The  Partnership is engaged in the business of operating and holding real estate
properties  for  investment.  The  Partnership  acquired two existing  apartment
properties  and a  newly  constructed  apartment  property  during  1985  in its
acquisition  phase.  The  Partnership  continues to own and operate one of these
properties. See "Item 2. Description of Property".

Commencing  March 18, 1985 the Partnership  offered,  pursuant to a Registration
Statement filed with the Securities and Exchange Commission,  up to 40,000 Units
of Limited Partnership  Interest (the "Units") at a purchase price of $1,000 per
Unit with a minimum  purchase of 5 Units  ($5,000),  or 2 Units  ($2,000) for an
Individual Retirement Account.

The offering  terminated on November 5, 1985. Upon  termination of the offering,
the Partnership had accepted subscriptions for 17,343 Units, including 100 Units
purchased by the Corporate  General  Partner,  for an aggregate of  $17,343,000.
Since its initial  offering,  the Partnership has not received,  nor are limited
partners required to make, any additional capital contributions.

The Partnership  has no employees.  Management and  administrative  services are
provided  by the  Corporate  General  Partner  and  by  agents  retained  by the
Corporate  General  Partner.  An affiliate of the Corporate  General Partner has
been providing such property management services.

Risk Factors

The  real  estate  business  in which  the  Partnership  is  engaged  is  highly
competitive.  There are other  residential  properties within the market area of
the Partnership's  property.  The number and quality of competitive  properties,
including  those which may be managed by an affiliate of the  Corporate  General
Partner,  in such market area could have a material  effect on the rental market
for the  apartments  at the  Partnership's  property  and the rents  that may be
charged  for such  apartments.  While  the  Corporate  General  Partner  and its
affiliates  own and/or  control a significant  number of apartment  units in the
United  States,  such  units  represent  an  insignificant  percentage  of total
apartment units in the United States and competition for apartments is local.

Laws benefiting  disabled persons may result in the Partnership's  incurrence of
unanticipated  expenses.  Under the Americans with  Disabilities Act of 1990, or
ADA,  all places  intended to be used by the public are required to meet certain
Federal  requirements  related to access and use by disabled persons.  Likewise,
the Fair Housing Amendments Act of 1988, or FHAA, requires apartments properties
first occupied after March 13, 1990 to be accessible to the  handicapped.  These
and other  Federal,  state  and  local  laws may  require  modifications  to the
Partnership's  property, or restrict renovations of the property.  Noncompliance
with these laws could result in the  imposition  of fines or an award of damages
to  private  litigants  and  also  could  result  in an  order  to  correct  any
non-complying  feature,  which could result in substantial capital expenditures.
Although the Corporate General Partner believes that the Partnership's  property
is  substantially in compliance with the present  requirements,  the Partnership
may incur unanticipated expenses to comply with the ADA and the FHAA.

Both the income and expenses of operating the property owned by the  Partnership
are subject to factors outside of the Partnership's  control, such as changes in
the supply and demand for  similar  properties  resulting  from  various  market
conditions, increases/decreases in unemployment or population shifts, changes in
the  availability of permanent  mortgage  financing,  changes in zoning laws, or
changes in patterns or needs of users. In addition,  there are risks inherent in
owning  and  operating  residential   properties  because  such  properties  are
susceptible  to the  impact of  economic  and other  conditions  outside  of the
control of the Partnership.

From time to time, the Federal Bureau of  Investigation,  or FBI, and the United
States  Department  of  Homeland  Security  issue  alerts  regarding   potential
terrorist threats  involving  apartment  buildings.  Threats of future terrorist
attacks,  such as those  announced  by the FBI and the  Department  of  Homeland
Security,  could  have a  negative  effect on rent and  occupancy  levels at the
Partnership's  property.  The effect that future terrorist activities or threats
of such activities could have on the  Partnership's  operations is uncertain and
unpredictable.  If the  Partnership  were to incur a loss at the  property  as a
result of an act of terrorism,  the  Partnership  could lose all or a portion of
the capital  invested in the  property,  as well as the future  revenue from the
property.  In this regard, the Partnership has purchased insurance to cover acts
of terrorism. The Corporate General Partner does not anticipate that these costs
will have a negative effect on the Partnership's  financial condition or results
of operations.

There have been, and it is possible there may be other, Federal, state and local
legislation  and  regulations   enacted   relating  to  the  protection  of  the
environment.  The Partnership is unable to predict the extent,  if any, to which
such new  legislation  or  regulations  might occur and the degree to which such
existing or new legislation or regulations  might adversely  affect the property
owned by the Partnership.

The  Partnership  monitors its property for evidence of  pollutants,  toxins and
other dangerous substances, including the presence of asbestos. In certain cases
environmental  testing has been performed which resulted in no material  adverse
conditions or liabilities.  In no case has the Partnership  received notice that
it is a potentially  responsible party with respect to an environmental clean up
site.

A further description of the Partnership's business is included in "Management's
Discussion and Analysis or Plan of Operation"  included in "Item 6" of this Form
10-KSB.

Item 2.     Description of Property

The following table sets forth the Partnership's investment in a property:
<TABLE>
<CAPTION>

                                   Date of
Property                           Purchase       Type of Ownership           Use

<S>                                <C>   <C>
Governor's Park Apartments         09/30/85  Fee ownership, subject to   Apartment
  Ft. Collins, Colorado                      first mortgage (1)          188 units
</TABLE>

(1)   Property is held by a Limited  Partnership in which the Partnership owns a
      99.99% interest.

Schedule of Property

Set forth  below for the  Partnership's  property is the gross  carrying  value,
accumulated depreciation,  depreciable life, method of depreciation, and Federal
tax basis as of December 31, 2004.
<TABLE>
<CAPTION>

                     Gross
                   Carrying    Accumulated   Depreciable    Method of       Federal
Property             Value    Depreciation       Life      Depreciation    Tax Basis
                        (in thousands)                                   (in thousands)
Governor's Park
<S>                 <C>          <C>           <C>                          <C>
  Apartments        $ 8,440      $ 4,760       5-39 yrs        S/L          $ 1,891
</TABLE>

See  "Note A" to the  consolidated  financial  statements  included  in "Item 7.
Financial  Statements" for a description of the  Partnership's  depreciation and
capitalization policies.

Schedule of Property Indebtedness

The  following  table  sets  forth  certain  information  relating  to the  loan
encumbering the Partnership's property.
<TABLE>
<CAPTION>

                        Principal                                           Principal
                       Balance At      Stated                                Balance
                      December 31,    Interest     Period     Maturity       Due At
Property                  2004        Rate (1)    Amortized     Date      Maturity (2)
                     (in thousands)                                      (in thousands)
Governor's Park
  Apartments
<S>                      <C>            <C>      <C>          <C>   <C>       <C>
  1st mortgage           $ 6,510        7.12%    240 months   03/01/22        $ --
</TABLE>

(1) Fixed rate mortgage.

(2) See "Item 7. Financial  Statements - Note C" for information with respect to
the  Partnership's  ability to prepay the loan and other specific  details about
the loan.

Schedule of Rental Rates and Occupancy

Average   annual   rental  rates  and  occupancy  for  2004  and  2003  for  the
Partnership's property are as follows:

                                       Average Annual                 Average
                                        Rental Rates                 Occupancy
                                         (per unit)
 Property                           2004           2003           2004      2003

 Governor's Park Apartments       $ 7,772         $ 8,072         89%        90%

As noted under "Item 1.  Description of Business",  the real estate  industry is
highly  competitive.  The Partnership's  property is subject to competition from
other residential apartment complexes in the area. The Corporate General Partner
believes that the property is adequately  insured.  The property is an apartment
complex  which  leases its units for lease terms of one year or less.  No tenant
leases  10% or more of the  available  rental  space.  The  property  is in good
physical  condition,  subject to normal  depreciation  and  deterioration  as is
typical for assets of this type and age.

Schedule of Real Estate Taxes and Rates

Real estate taxes and rates in 2004 for the property were:

                                            2004            2004
                                           Billing          Rate
                                       (in thousands)

       Governor's Park Apartments           $ 71            8.8%

Capital Improvements

Governor's Park Apartments:  The Partnership completed approximately $238,000 in
capital  expenditures at Governor's  Park  Apartments,  consisting  primarily of
exterior painting, fire safety equipment, building upgrades, appliance and floor
covering  replacements  and miniblind  installations.  Those  improvements  were
funded from  operations and  replacement  reserves.  The  Partnership  regularly
evaluates the capital  improvement needs of the property.  While the Partnership
has no material commitments for property improvements and replacements,  certain
routine  capital   expenditures  are  anticipated   during  2005.  Such  capital
expenditures  will depend on the  physical  condition of the property as well as
replacement reserves and anticipated cash flow generated by the property.

Capital  expenditures will be incurred only if cash is available from operations
or from  Partnership  reserves.  To the extent  that  capital  improvements  are
completed,  the Partnership's  distributable cash flow, if any, may be adversely
affected at least in the short term.

Item 3.     Legal Proceedings

In March 1998, several putative unit holders of limited partnership units of the
Partnership  commenced an action  entitled  Rosalie  Nuanes,  et al. v. Insignia
Financial Group, Inc., et al. (the "Nuanes action") in the Superior Court of the
State of  California  for the  County  of San  Mateo.  The  plaintiffs  named as
defendants,  among others,  the Partnership,  its Corporate  General Partner and
several of their  affiliated  partnerships  and corporate  entities.  The action
purported  to  assert  claims  on  behalf  of a class of  limited  partners  and
derivatively  on behalf  of a number  of  limited  partnerships  (including  the
Partnership)  that are named as nominal  defendants,  challenging,  among  other
things,  the  acquisition  of interests  in certain  Corporate  General  Partner
entities by Insignia Financial Group, Inc.  ("Insignia") and entities that were,
at one  time,  affiliates  of  Insignia;  past  tender  offers  by the  Insignia
affiliates to acquire limited partnership units;  management of the partnerships
by the  Insignia  affiliates;  and the series of  transactions  which  closed on
October 1, 1998 and February 26, 1999 whereby  Insignia and Insignia  Properties
Trust,  respectively,  were merged into AIMCO.  The plaintiffs  sought  monetary
damages and equitable relief, including judicial dissolution of the Partnership.
In addition, during the third quarter of 2001, a complaint (the "Heller action")
was filed  against  the same  defendants  that are named in the  Nuanes  action,
captioned  Heller v.  Insignia  Financial  Group.  On or about  August 6,  2001,
plaintiffs filed a first amended  complaint.  The Heller action was brought as a
purported derivative action, and asserted claims for, among other things, breach
of fiduciary  duty,  unfair  competition,  conversion,  unjust  enrichment,  and
judicial dissolution.

On January 8, 2003,  the parties filed a  Stipulation  of Settlement in proposed
settlement of the Nuanes action and the Heller action.

In general  terms,  the  proposed  settlement  provides  for  certification  for
settlement  purposes of a settlement class consisting of all limited partners in
this  Partnership and others (the  "Partnerships")  as of December 20, 2002, the
dismissal  with  prejudice  and  release  of claims  in the  Nuanes  and  Heller
litigation,  payment by AIMCO of $9.9  million  (which shall be  distributed  to
settlement  class  members  after  deduction of attorney fees and costs of class
counsel and certain costs of settlement) and up to $1 million toward the cost of
independent  appraisals of the  Partnerships'  properties  by a Court  appointed
appraiser. An affiliate of the Corporate General Partner has also agreed to make
at least one round of tender offers to purchase all of the partnership interests
in the Partnerships within one year of final approval,  if it is granted, and to
provide  partners with the independent  appraisals at the time of these tenders.
The proposed  settlement also provided for the limitation of the allowable costs
which  the  Corporate   General  Partner  or  its  affiliates  will  charge  the
Partnerships  in connection with this litigation and imposes limits on the class
counsel  fees and  costs in this  litigation.  On April  11,  2003,  notice  was
distributed  to  limited   partners   providing  the  details  of  the  proposed
settlement.

On June 13, 2003, the Court granted final approval of the settlement and entered
judgment in both the Nuanes and Heller actions.  On August 12, 2003, an objector
("Objector")  filed an  appeal  seeking  to  vacate  and/or  reverse  the  order
approving the settlement and entering  judgment  thereto.  On November 24, 2003,
the Objector filed an  application  requesting the Court order AIMCO to withdraw
settlement  tender offers it had  commenced,  refrain from making further offers
pending the appeal and auction any units tendered to third  parties,  contending
that the offers did not conform  with the terms of the  Settlement.  Counsel for
the Objector (on behalf of another  investor)  had  alternatively  requested the
Court take certain  action  purportedly  to enforce the terms of the  settlement
agreement.  On December 18, 2003,  the Court heard oral  argument on the motions
and denied  them both in their  entirety.  The  Objector  filed a second  appeal
challenging the court's use of a referee and its order requiring Objector to pay
those fees.

On January 28, 2004,  the  Objector  filed his opening  brief in the Appeal.  On
April 23,  2004,  the  Corporate  General  Partner  and its  affiliates  filed a
response  brief in support  of the  settlement  and the  judgment  thereto.  The
plaintiffs  have also  filed a brief in support  of the  settlement.  On June 4,
2004,  Objector filed a reply to the briefs  submitted by the Corporate  General
Partner and  Plaintiffs.  In addition  both the  Objector and  plaintiffs  filed
briefs in connection  with the second  appeal.  On March 21, 2005,  the Court of
Appeals issued opinions in both pending  appeals.  With regard to the settlement
and judgment  entered  thereto,  the Court of Appeals  vacated the trial court's
order and remanded to the trial court for further findings on the basis that the
"state of the record is insufficient  to permit  meaningful  appellate  review".
With  regard to the  second  appeal,  the Court of  Appeals  reversed  the order
requiring the Objector to pay referee fees.

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

As previously disclosed,  AIMCO Properties L.P. and NHP Management Company, both
affiliates of the Corporate General Partner,  are defendants in an action in the
United States District Court,  District of Columbia.  The plaintiffs have styled
their  complaint  as a  collective  action  under the Fair Labor  Standards  Act
("FLSA") and seek to certify state subclasses in California,  Maryland,  and the
District of Columbia. Specifically, the plaintiffs contend that AIMCO Properties
L.P. failed to compensate  maintenance  workers for time that they were required
to be "on-call." Additionally, plaintiffs allege AIMCO Properties L.P. failed to
comply  with the FLSA in  compensating  maintenance  workers  for time that they
worked in responding to a call while  "on-call."  The  defendants  have filed an
answer to the amended complaint denying the substantive  allegations.  Discovery
relating  to the  certification  of the  collective  action  has  concluded  and
briefing in the matter is underway.  Although the outcome of any  litigation  is
uncertain,  AIMCO  Properties,  L.P. does not believe that the ultimate  outcome
will have a material  adverse  effect on its  financial  condition or results of
operations.  Similarly,  the Corporate General Partner does not believe that the
ultimate  outcome  will have a  material  adverse  effect  on the  Partnership's
consolidated financial condition or results of operations.

The  Partnership  is unaware  of any other  pending  or  outstanding  litigation
matters involving it or its investment  property that is not of a routine nature
arising in the ordinary course of business.

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

During the quarter ended December 31, 2004, no matter was submitted to a vote of
the Unit holders through the solicitation of proxies or otherwise.

                                     PART II

Item 5.     Market for the Partnership Equity and Related Partner Matters

The Partnership,  a publicly-held  limited partnership,  offered and sold 17,343
limited  partnership  units  ("Units"),  including  100 Units  purchased  by the
Corporate General Partner for proceeds aggregating $17,343,000.  The Partnership
currently  has 667  holders  of record  owning  an  aggregate  of 17,343  Units.
Affiliates of the Corporate  General Partner owned 11,180 Units or approximately
64.46% at December 31, 2004.  No public  trading  market has  developed  for the
Units, and it is not anticipated that such a market will develop in the future.

No  distributions  were made by the Partnership for the years ended December 31,
2004 and 2003.

Future  cash  distributions  will  depend on the levels of cash  generated  from
operations  and  the  timing  of  the  debt  maturity,   property  sale,  and/or
refinancing.  The Partnership's cash available for distribution is reviewed on a
monthly  basis.  There can be no assurance  that the  Partnership  will generate
sufficient funds from operations, after required capital expenditures, to permit
any  distributions to its partners in the year 2005 or subsequent  periods.  See
"Item 2.  Description  of  Property  -  Capital  Improvements"  for  information
relating to anticipated capital expenditures at the property.

In addition to its  indirect  ownership of the general  partner  interest in the
Partnership,  AIMCO and its  affiliates  owned 11,180  Units in the  partnership
representing  64.46% of the outstanding  Units at December 31, 2004. A number of
these  Units  were  acquired  pursuant  to  tender  offers  made by AIMCO or its
affiliates.  It is possible that AIMCO or its affiliates will acquire additional
Units  in  exchange  for  cash or a  combination  of cash  and  units  in  AIMCO
Properties,  L.P., the operating  partnership of AIMCO,  either through  private
purchases or tender offers.  Pursuant to the Partnership Agreement,  unitholders
holding a majority of the Units are  entitled  to take action with  respect to a
variety of matters  that  include,  but are not  limited  to,  voting on certain
amendments  to the  Partnership  Agreement  and voting to remove  the  Corporate
General  Partner.  As a result of its  ownership  of  64.46% of the  outstanding
Units,  AIMCO and its  affiliates  are in a position  to control all such voting
decisions  with  respect to the  Partnership.  Although  the  Corporate  General
Partner owes fiduciary duties to the limited  partners of the  Partnership,  the
Corporate  General  Partner  also  owes  fiduciary  duties  to AIMCO as its sole
stockholder.  As a result,  the  duties of the  Corporate  General  Partner,  as
corporate general partner,  to the Partnership and its limited partners may come
into conflict with the duties of the Corporate  General  Partner to AIMCO as its
sole stockholder.

Item 6.     Management's Discussion and Analysis or Plan of Operation

This item should be read in conjunction with the financial  statements and other
items contained elsewhere in this report.

The  Partnership's  financial  results depend upon a number of factors including
the ability to attract and maintain tenants at the investment property, interest
rates on the mortgage loan,  costs incurred to operate the investment  property,
general economic conditions and weather. As part of the ongoing business plan of
the  Partnership,  the  Corporate  General  Partner  monitors the rental  market
environment of its investment  property to assess the  feasibility of increasing
rents, maintaining or increasing occupancy levels and protecting the Partnership
from increases in expenses.  As part of this plan, the Corporate General Partner
attempts  to  protect  the  Partnership  from the  burden  of  inflation-related
increases  in  expenses  by  increasing  rents and  maintaining  a high  overall
occupancy  level.   However,  the  Corporate  General  Partner  may  use  rental
concessions and rental rate reductions to offset  softening  market  conditions;
accordingly,  there is no guarantee that the Corporate  General  Partner will be
able to sustain such a plan.  Further,  a number of factors that are outside the
control of the  Partnership  such as the local economic  climate and weather can
adversely or positively affect the Partnership's financial results.

Results of Operations

The   Partnership's   net  loss  for  the  year  ended  December  31,  2004  was
approximately  $99,000 compared to net income of  approximately  $93,000 for the
year ended  December  31,  2003.  The  decrease in net income for the year ended
December  31,  2004 is due to a decrease  in total  revenues  and an increase in
total  expenses.  Total  revenues  decreased  due to a decrease in rental income
caused by a decrease  in the  average  rental  rate at the  investment  property
partially offset by a decrease in bad debt expense.

Total expenses increased for the year ended December 31, 2004 due to an increase
in operating  and  depreciation  expenses.  Operating  expense  increased due to
increases in advertising,  property,  administrative,  and maintenance expenses.
Advertising   expenses   increased  due  to  increases  in  web  and  periodical
advertising  and  resident  relations.  Property  expense  increased  due  to an
increase in payroll and related expenses.  Administrative  expense increased due
to  an  increase  in  credit   collection  and  training  and  travel  expenses.
Maintenance  expense  increased  due to an  increase  in  contract  labor at the
Partnership's  investment  property.   Depreciation  expense  increased  due  to
property improvements placed into service during the past twelve months.

Included in general and administrative  expense for the years ended December 31,
2004 and 2003 are management  reimbursements to the Corporate General Partner as
allowed  under  the  Partnership   Agreement.   Also  included  in  general  and
administrative  expenses  are costs  associated  with the  quarterly  and annual
communications  with  investors  and  regulatory  agencies  and the annual audit
required by the Partnership Agreement.

Liquidity and Capital Resources

At  December  31,  2004,  the  Partnership  had  cash and  cash  equivalents  of
approximately  $84,000 compared to  approximately  $74,000 at December 31, 2003.
Cash and cash  equivalents  increased  approximately  $10,000 since December 31,
2003 due to approximately $165,000 and $54,000 of cash provided by operating and
financing activities,  respectively,  partially offset by approximately $209,000
of cash used in investing  activities.  Cash  provided by  financing  activities
consisted  of advances  received  from an  affiliate  of the  Corporate  General
Partner  partially  offset by  principal  payments on the  mortgage  encumbering
Governor's  Park  Apartments.  Cash used in  investing  activities  consisted of
property improvements and replacements  partially offset by net withdrawals from
restricted  escrows.  The Partnership  invests its working  capital  reserves in
interest bearing accounts.

The sufficiency of existing  liquid assets to meet future  liquidity and capital
expenditure   requirements   is  directly   related  to  the  level  of  capital
expenditures required at the property to adequately maintain the physical assets
and other operating needs of the Partnership and to comply with Federal,  state,
and local legal and  regulatory  requirements.  The  Corporate  General  Partner
monitors  developments  in the  area of legal  and  regulatory  compliance.  For
example,  the  Sarbanes-Oxley  Act  of  2002  mandates  or  suggests  additional
compliance  measures  with  regard to  governance,  disclosure,  audit and other
areas.  In light of these changes,  the  Partnership  expects that it will incur
higher expenses related to compliance.  The Partnership  regularly evaluates the
capital improvement needs of the property. While the Partnership has no material
commitments for property improvements and replacements,  certain routine capital
expenditures are anticipated during 2005.

Such capital  expenditures will depend on the physical condition of the property
as well as  replacement  reserves  and  anticipated  cash flow  generated by the
property.  Capital  expenditures will be incurred only if cash is available from
operations or from Partnership reserves. To the extent that capital improvements
are  completed,  the  Partnership's  distributable  cash  flow,  if any,  may be
adversely affected at least in the short term.

The  Partnership's  assets are thought to be sufficient  for any near term needs
(exclusive  of  capital   improvements)   of  the   Partnership.   The  mortgage
indebtedness  encumbering the investment property of approximately $6,510,000 is
being  amortized  over 240 months with a maturity date of March 1, 2022 at which
time the loan is scheduled to be fully amortized.

No  distributions  were made by the Partnership for the years ended December 31,
2004 and 2003.

Future  cash  distributions  will  depend on the levels of cash  generated  from
operations  and  the  timing  of  the  debt   maturity,   property  sale  and/or
refinancing.  The Partnership's cash available for distribution is reviewed on a
monthly basis.  There can be no assurance,  however,  that the Partnership  will
generate sufficient funds from operations,  after required capital expenditures,
to permit  any  distributions  to its  partners  in the year 2005 or  subsequent
periods.

In addition to its  indirect  ownership of the general  partner  interest in the
Partnership,  AIMCO and its affiliates  owned 11,180 limited  partnership  units
(the "Units") in the Partnership representing 64.46% of the outstanding Units at
December  31,  2004.  A number of these Units were  acquired  pursuant to tender
offers  made by  AIMCO  or its  affiliates.  It is  possible  that  AIMCO or its
affiliates will acquire  additional  Units in exchange for cash or a combination
of cash and units in AIMCO Properties, L.P., the operating partnership of AIMCO,
either through private  purchases or tender offers.  Pursuant to the Partnership
Agreement,  unitholders  holding a majority  of the Units are  entitled  to take
action with  respect to a variety of matters that  include,  but are not limited
to,  voting on certain  amendments  to the  Partnership  Agreement and voting to
remove the Corporate General Partner.  As a result of its ownership of 64.46% of
the outstanding Units, AIMCO and its affiliates are in a position to control all
such voting  decisions with respect to the  Partnership.  Although the Corporate
General  Partner  owes  fiduciary   duties  to  the  limited   partners  of  the
Partnership,  the Corporate  General Partner also owes fiduciary duties to AIMCO
as its sole  stockholder.  As a  result,  the  duties of the  Corporate  General
Partner,  as  corporate  general  partner,  to the  Partnership  and its limited
partners may come into conflict with the duties of the Corporate General Partner
to AIMCO as its sole stockholder.

Critical Accounting Policies and Estimates

A summary of the Partnership's  significant  accounting  policies is included in
"Note A - Organization and Significant Accounting Policies" which is included in
the  financial  statements  in "Item 7.  Financial  Statements".  The  Corporate
General  Partner  believes that the  consistent  application  of these  policies
enables the  Partnership  to provide  readers of the financial  statements  with
useful and reliable  information about the  Partnership's  operating results and
financial  condition.  The preparation of consolidated  financial  statements in
conformity with accounting  principles  generally  accepted in the United States
requires the Partnership to make estimates and assumptions.  These estimates and
assumptions affect the reported amounts of assets and liabilities at the date of
the financial  statements  as well as reported  amounts of revenues and expenses
during the reporting  period.  Actual results could differ from these estimates.
Judgments  and  assessments  of  uncertainties  are  required  in  applying  the
Partnership's  accounting  policies in many areas.  The  following may involve a
higher degree of judgment and complexity.

Impairment of Long-Lived Assets

Investment property is recorded at cost, less accumulated  depreciation,  unless
considered  impaired.  If events or  circumstances  indicate  that the  carrying
amount of a property may be impaired, the Partnership will make an assessment of
its recoverability by estimating the undiscounted  future cash flows,  excluding
interest charges, of the property.  If the carrying amount exceeds the aggregate
future cash flows,  the  Partnership  would  recognize an impairment loss to the
extent the carrying amount exceeds the fair value of the property.

Real  property  investments  are  subject  to varying  degrees of risk.  Several
factors  may  adversely  affect  the  economic  performance  and  value  of  the
Partnership's  investment  property.  These factors include, but are not limited
to,  changes  in the  national,  regional  and  local  economic  climate;  local
conditions,  such as an oversupply of multifamily  properties;  competition from
other available  multifamily property owners and changes in market rental rates.
Any adverse changes in these factors could cause impairment of the Partnership's
assets.

Revenue Recognition

The Partnership generally leases apartment units for twelve-month terms or less.
The Partnership will offer rental concessions during particularly slow months or
in response  to heavy  competition  from other  similar  complexes  in the area.
Rental income attributable to leases, net of any concessions, is recognized on a
straight-line  basis over the term of the lease.  The Partnership  evaluates all
accounts  receivable  from  residents and  establishes  an allowance,  after the
application of security deposits,  for accounts greater than 30 days past due on
current tenants and all receivables due from former tenants.

Item 7.     Financial Statements

SHELTER PROPERTIES VII LIMITED PARTNERSHIP

LIST OF FINANCIAL STATEMENTS

      Report of Independent Registered Public Accounting Firm

      Consolidated Balance Sheet - December 31, 2004

      Consolidated  Statements of  Operations - Years ended  December 31, 2004
      and 2003

      Consolidated  Statements  of Changes in Partners'  Deficit - Years ended
      December 31, 2004 and 2003

      Consolidated Statements of Cash Flows - Years ended December 31, 2004
      and 2003

      Notes to Consolidated Financial Statements

              Report of Independent Registered Public Accounting Firm




The Partners
Shelter Properties VII Limited Partnership


We  have  audited  the  accompanying   consolidated  balance  sheet  of  Shelter
Properties  VII Limited  Partnership  as of December 31,  2004,  and the related
consolidated  statements of operations,  changes in partners' deficit,  and cash
flows for each of the two years in the period ended  December  31,  2004.  These
financial statements are the responsibility of the Partnership's management. Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

We conducted our audits in accordance  with the standards of the Public  Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement.  We were not engaged to perform an
audit of the Partnership's internal control over financial reporting.  Our audit
included  consideration of internal control over financial  reporting as a basis
for designing audit  procedures that are appropriate in the  circumstances,  but
not for the  purpose  of  expressing  an  opinion  on the  effectiveness  of the
Partnership's internal control over financial reporting. Accordingly, we express
no such opinion.  An audit also 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.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects, the consolidated financial position of Shelter Properties
VII Limited  Partnership at December 31, 2004, and the  consolidated  results of
its  operations and its cash flows for each of the two years in the period ended
December 31, 2004, in conformity with accounting  principles  generally accepted
in the United States.

                                                          /s/ERNST & YOUNG LLP



Greenville, South Carolina
March 21, 2005

                  SHELTER PROPERTIES VII LIMITED PARTNERSHIP

                           CONSOLIDATED BALANCE SHEET
                        (in thousands, except unit data)

                                December 31, 2004

<TABLE>
<CAPTION>


Assets
<S>                                                                           <C>
   Cash and cash equivalents                                                  $ 84
   Receivables and deposits                                                      50
   Restricted escrows                                                            56
   Other assets                                                                 283
   Investment property (Notes C and D):
      Land                                                     $ 714
      Buildings and personal property                           7,726
                                                                8,440
      Less accumulated depreciation                            (4,760)        3,680
                                                                            $ 4,153

Liabilities and Partners' Deficit

Liabilities
      Accounts payable                                                        $ 13
      Tenant security deposit liabilities                                        35
      Due to affiliates (Note B)                                                284
      Accrued property taxes                                                     71
      Other liabilities                                                         123
      Mortgage note payable (Note C)                                          6,510

Partners' Deficit
   General partners                                            $ (100)
   Limited partners (17,343 units issued and
      outstanding)                                             (2,783)       (2,883)
                                                                            $ 4,153


        See Accompanying Notes to Consolidated Financial Statements
</TABLE>



<PAGE>


                  SHELTER PROPERTIES VII LIMITED PARTNERSHIP

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                      (in thousands, except per unit data)

<TABLE>
<CAPTION>


                                                            Years Ended December 31,
                                                              2004            2003
Revenues:
<S>                                                          <C>            <C>
  Rental income                                              $ 1,288        $ 1,335
  Other income                                                   141            139
      Total revenues                                           1,429          1,474

Expenses:
  Operating                                                      644            504
  General and administrative                                      79             88
  Depreciation                                                   238            225
  Interest                                                       492            497
  Property taxes                                                  75             67
      Total expenses                                           1,528          1,381

Net (loss) income (Note E)                                    $ (99)          $ 93

Net (loss) income allocated to general partners (1%)          $ (1)           $ 1
Net (loss) income allocated to limited partners (99%)            (98)            92

                                                              $ (99)          $ 93

Net (loss) income per limited partnership unit               $ (5.65)        $ 5.30

        See Accompanying Notes to Consolidated Financial Statements
</TABLE>



<PAGE>


                  SHELTER PROPERTIES VII LIMITED PARTNERSHIP

           CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' DEFICIT
                        (in thousands, except unit data)

<TABLE>
<CAPTION>


                                         Limited
                                       Partnership    General     Limited
                                          Units       Partners   Partners     Total

<S>                                       <C>         <C>        <C>         <C>
Original capital contributions            17,343      $     2    $17,343     $17,345

Partners' deficit at
  December 31, 2002                       17,343      $  (100)   $(2,777)    $(2,877)

Net income for the year ended
  December 31, 2003                           --            1         92          93

Partners' deficit at
  December 31, 2003                       17,343          (99)    (2,685)     (2,784)

Net loss for the year ended
  December 31, 2004                           --           (1)       (98)        (99)

Partners' deficit at
  December 31, 2004                       17,343      $  (100)   $(2,783)    $(2,883)

        See Accompanying Notes to Consolidated Financial Statements
</TABLE>



<PAGE>



                  SHELTER PROPERTIES VII LIMITED PARTNERSHIP

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (in thousands)
<TABLE>
<CAPTION>

                                                                    Years Ended December 31,
                                                                       2004          2003
Cash flows from operating activities:
<S>                                                                    <C>           <C>
  Net (loss) income                                                    $ (99)        $ 93
  Adjustments to reconcile net (loss) income to net cash
   provided by operating activities:
     Depreciation                                                         238          225
     Amortization of loan costs                                            14           14
     Change in accounts:
      Due to affiliates                                                    45           --
      Receivables and deposits                                            (31)          13
      Other assets                                                        (10)         (25)
      Accounts payable                                                     13           (6)
      Tenant security deposit liabilities                                   8           (4)
      Accrued taxes                                                        --          (16)
      Other liabilities                                                   (13)         (12)
          Net cash provided by operating activities                       165          282

Cash flows from investing activities:
  Property improvements and replacements                                 (238)        (105)
  Net withdrawals from (deposits to) restricted escrows                    29          (45)
          Net cash used in investing activities                          (209)        (150)

Cash flows from financing activities:
  Payments on mortgage note payable                                      (185)        (173)
  Advances from affiliates                                                239           --
          Net cash provided by (used in) financing activities              54         (173)

Net increase (decrease) in cash and cash equivalents                       10          (41)
Cash and cash equivalents at beginning of year                             74          115

Cash and cash equivalents at end of year                               $ 84          $ 74

Supplemental disclosure of cash flow information:
  Cash paid for interest                                               $ 472        $ 484

        See Accompanying Notes to Consolidated Financial Statements
</TABLE>



<PAGE>



                  SHELTER PROPERTIES VII LIMITED PARTNERSHIP

                  Notes to Consolidated Financial Statements

                                December 31, 2004


Note A - Organization and Significant Accounting Policies

Organization:

Shelter  Properties VII Limited  Partnership (the "Partnership" or "Registrant")
was  organized  as a  limited  partnership  under the laws of the State of South
Carolina on October 29, 1984. The general partner  responsible for management of
the Partnership's  business is Shelter Realty VII Corporation,  a South Carolina
corporation (the "Corporate General Partner").  The Corporate General Partner is
a subsidiary of Apartment  Investment  Management Company ("AIMCO"),  a publicly
traded  real  estate  investment  trust.  The  other  general  partner  is AIMCO
Properties,  L.P., an affiliate of the Corporate  General Partner and AIMCO. The
Partnership  Agreement provides that the Partnership is to terminate on December
31,  2024  unless  terminated  prior to such  date.  The  Partnership  commenced
operations  on August  27,  1985 and  completed  its  acquisition  of  apartment
properties on December 6, 1985.  The  Partnership  owns one  apartment  property
located in Colorado.

Principles of Consolidation:

The  Partnership's   financial  statements  include  all  the  accounts  of  the
Partnership  and its  99.99%  owned  partnership.  The  general  partner  of the
consolidated  partnership is Shelter Realty VII Corporation.  Shelter Realty VII
Corporation  may be  removed by the  Partnership;  therefore,  the  consolidated
partnership is controlled and consolidated by the  Partnership.  All significant
interpartnership transactions have been eliminated.

Use of Estimates:

The preparation of financial statements in conformity with accounting principles
generally  accepted in the United States  requires  management to make estimates
and assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.

Allocation of Cash Distributions:

Cash  distributions by the Partnership are allocated between general and limited
partners in accordance  with the provisions of the  Partnership  Agreement.  The
Partnership  Agreement defines net cash from operations as revenue received less
operating  expenses paid,  adjusted for certain  specified items which primarily
include mortgage  payments on debt,  property  improvements and replacements not
previously reserved,  and the effects of other adjustments to reserves including
reserve  amounts  deemed  necessary by the  Corporate  General  Partner.  In the
following notes to the  consolidated  financial  statements,  whenever "net cash
from operations" is used, it has the aforementioned  meaning. The following is a
reconciliation  of the subtotal in the accompanying  consolidated  statements of
cash flows  captioned  "net cash provided by operating  activities" to "net cash
from operations",  as defined in the Partnership  Agreement.  However, "net cash
from  operations"  should not be considered an  alternative  to net income as an
indicator  of the  Partnership's  operating  performance  or to cash  flows as a
measure of liquidity.

<TABLE>
<CAPTION>

                                                         Years Ended December 31,
                                                             2004          2003
                                                              (in thousands)

Net cash provided by operating activities                   $ 165         $ 282
<S>                                                           <C>           <C>
  Property improvements and replacements                      (238)         (105)
  Payments on mortgage notes payable                          (185)         (173)
  Changes in reserves for net operating liabilities            (12)           50
  Changes in restricted escrows, net                            29           (45)
  Additional reserves                                           --            (9)
Net cash used in operations                                 $ (241)        $ --
</TABLE>

For the year ended December 31, 2003,  the Corporate  General  Partner  reserved
approximately   $9,000  to  fund  capital   improvements   and  repairs  at  the
Partnership's property.

Distributions made from reserves no longer considered necessary by the Corporate
General  Partner are  considered to be additional  net cash from  operations for
allocation purposes.

The Partnership  Agreement  provides that 99% of  distributions of net cash from
operations  are  allocated to the limited  partners  until they receive net cash
from  operations  for such  fiscal  year equal to 7% of their  adjusted  capital
values (as  defined in the  Partnership  Agreement),  at which point the general
partners will be allocated all net cash from operations until they have received
distributions equal to 10% of the aggregate net cash from operations distributed
to partners  for such fiscal  year.  Thereafter,  the general  partners  will be
allocated 10% of any  distributions  of remaining net cash from  operations  for
such fiscal year.

All  distributions of distributable  net proceeds (as defined in the Partnership
Agreement) from property  dispositions and refinancings will be allocated to the
limited  partners  until each limited  partner has received an amount equal to a
cumulative 7% per annum of the average of the limited partners' adjusted capital
value,   less  any  prior   distributions   of  net  cash  from  operations  and
distributable net proceeds, and has also received an amount equal to the limited
partners' adjusted capital value. Thereafter, the general partners receive 1% of
the selling prices of properties sold where they acted as a broker, and then the
limited  partners  will  be  allocated  85% of any  remaining  distributions  of
distributable net proceeds and the general partners will receive 15%.

Allocation of Profits, Gains and Losses:

Profits,  gains, and losses of the Partnership are allocated between general and
limited partners in accordance with the provisions of the Partnership Agreement.

For any fiscal  year,  to the extent  that  profits,  not  including  gains from
property dispositions,  do not exceed distributions of net cash from operations,
such profits are allocated in the same manner as such distributions.

Any gain from property  dispositions  attributable to the excess, if any, of the
indebtedness relating to a property immediately prior to the disposition of such
property  over  the  Partnership's  adjusted  basis  in the  property  shall  be
allocated to each partner  having a negative  capital  account  balance,  to the
extent of such negative  balance.  The balance of any gain shall be treated on a
cumulative basis as if it constituted an equivalent  amount of distributable net
proceeds  and shall be  allocated  to the  general  partners  to the extent that
general  partners would have received  distributable  net proceeds in connection
therewith; the balance shall be allocated to the limited partners.  However, the
interest  of the general  partners  will be equal to at least 1% of each gain at
all times  during the  existence  of the  Partnership.  Accordingly,  net (loss)
income as shown in the statement of operations and changes in partners'  deficit
for 2004  and  2003 was  allocated  99% to the  limited  partners  and 1% to the
general partners. Net (loss) income per limited partnership unit was computed by
dividing the net (loss) income allocated to the limited partners by 17,343 units
outstanding.

All  losses,  including  losses  attributable  to  property  dispositions,   are
allocated 99% to the limited partners and 1% to the general partners.

Other Reserves:

The Corporate  General  Partner may designate a portion of cash  generated  from
operations as "other  reserves" in  determining  net cash from  operations.  The
Corporate  General  Partner  designated as other reserves an amount equal to the
net liabilities  related to the operations of the apartment  property during the
current fiscal year that are expected to require the use of cash during the next
fiscal  year.  The  decrease in other  reserves  during  2004 was  approximately
$12,000,  compared to an increase of  approximately  $50,000 during 2003.  These
amounts were determined by considering changes in the balance of receivables and
deposits,  other assets,  accounts payable, tenant security deposit liabilities,
accrued property taxes, due to affiliates and other  liabilities.  At this time,
the Corporate General Partner expects to continue to adjust other reserves based
on the net change in the aforementioned account balances.

Cash and Cash Equivalents:

Cash and cash  equivalents  include cash on hand and in banks. At certain times,
the amount of cash deposited at a bank may exceed the limit on insured deposits.
Cash  balances  include  approximately  $79,000 at  December  31,  2004 that are
maintained by an affiliated  management company on behalf of affiliated entities
in cash concentration accounts.

Restricted Escrows:

Approximately  $56,000 of  replacement  reserves is on deposit with the mortgage
holder, as required by the mortgage agreement.

Investment Property:

Investment  property  consists of one  apartment  complex and is stated at cost.
Acquisition  fees are  capitalized  as a cost of real  estate.  The  Partnership
capitalizes  all  expenditures  in  excess of $250  that  clearly  relate to the
acquisition and  installation of real and personal  property  components.  These
expenditures  include costs incurred to replace  existing  property  components,
costs  incurred  to add a material  new  feature to a  property,  and costs that
increase  the useful life or service  potential of a property  component.  These
capitalized   costs  are  depreciated   over  the  useful  life  of  the  asset.
Expenditures for ordinary repairs,  maintenance and apartment turnover costs are
expensed as incurred.

In accordance with Statement of Financial Accounting Standards ("SFAS") No. 144,
"Accounting   for  the  Impairment  of  Disposal  of  Long-Lived   Assets,"  the
Partnership  records  impairment  losses on long-lived assets used in operations
when events and circumstances indicate that the assets might be impaired and the
undiscounted  cash flows estimated to be generated by those assets are less than
the carrying  amounts of those assets.  No  adjustments  for impairment of value
were recorded in the years ended December 31, 2004 or 2003.

Depreciation:

Depreciation is calculated by the  straight-line  method over the estimated life
of the apartment property and related personal property.  For Federal income tax
purposes, the accelerated cost recovery method is used for real property over 19
years for additions  after May 8, 1985,  and before January 1, 1987. As a result
of the Tax Reform Act of 1986,  for  additions  after  December  31,  1986,  the
modified  accelerated  cost recovery method is used for depreciation of (1) real
property over 27 1/2 years and (2) personal property additions over 5 years.

Deferred Costs:

Loan  costs  of  approximately  $238,000,  net of  accumulated  amortization  of
approximately  $38,000,  are  included  in  other  assets.  The loan  costs  are
amortized over the term of the related loan agreement.  Amortization expense was
approximately  $14,000 for both of the years ended  December  31, 2004 and 2003,
and is  included  in interest  expense.  Amortization  expense is expected to be
approximately $14,000 for each of the years 2005 through 2009.

Leasing   commissions  and  other  direct  costs  incurred  in  connection  with
successful  leasing  efforts are  deferred and  amortized  over the terms of the
related leases. Amortization of these costs is included in operating expenses.

Tenant Security Deposits:

The Partnership  requires security deposits from lessees for the duration of the
lease and such deposits are included in receivables  and deposits.  Deposits are
refunded when the tenant vacates,  provided the tenant has not damaged its space
and is current on rental payments.

Fair Value of Financial Instruments:

SFAS No.  107,  "Disclosures  about Fair  Value of  Financial  Instruments",  as
amended by SFAS No. 119, "Disclosures about Derivative Financial Instruments and
Fair  Value  of  Financial  Instruments",  requires  disclosure  of  fair  value
information  about  financial  instruments,  whether  or not  recognized  in the
balance sheet, for which it is practicable to estimate fair value. Fair value is
defined in the SFAS as the amount at which the instruments could be exchanged in
a  current  transaction  between  willing  parties,  other  than in a forced  or
liquidation  sale.  The  Partnership  believes that the carrying  amounts of its
financial  instruments (except for long term debt) approximate their fair values
due to the short term maturity of these instruments.  The Partnership  estimates
the fair value of its long-term  debt by  discounting  future cash flows using a
discount rate commensurate  with that currently  believed to be available to the
Partnership for similar term, fully amortizing long-term debt. The fair value of
the Partnership's long term debt at the Partnership's incremental borrowing rate
approximates its carrying balance.

Leases:

The Partnership generally leases apartment units for twelve-month terms or less.
Rental income  attributable to leases is recognized on a straight-line  basis as
it is earned. The Partnership  evaluates all accounts  receivable from residents
and establishes an allowance,  after the application of security  deposits,  for
accounts  greater than 30 days past due on current  tenants and all  receivables
due from former tenants.  The Partnership will offer rental  concessions  during
particularly  slow months or in response to heavy competition from other similar
complexes in the area. Any  concessions  given at the inception of the lease are
amortized  over the life of the  lease.  Additionally,  the  Partnership  defers
certain referral fees and commission to obtain a lease. The deferred amounts are
recognized over the life of the lease.

Advertising Costs:

The Partnership expenses the costs of advertising as incurred. Advertising costs
of  approximately  $46,000 and $27,000 for the years ended December 31, 2004 and
2003, respectively, were charged to operating expense.

Segment Reporting:

SFAS  No.  131,   "Disclosure  about  Segments  of  an  Enterprise  and  Related
Information"  established standards for the way that public business enterprises
report information about operating  segments in annual financial  statements and
requires that those  enterprises  report  selected  information  about operating
segments in interim financial reports. It also established standards for related
disclosures about products and services,  geographic areas, and major customers.
As defined in SFAS 131, the Partnership has only one reportable segment.

Note B - Transactions with Affiliated Parties

The  Partnership  has no employees and depends on the Corporate  General Partner
and its  affiliates for the management  and  administration  of all  partnership
activities.  The  Partnership  Agreement  provides  for (i) certain  payments to
affiliates for services and (ii)  reimbursement of certain expenses  incurred by
affiliates on behalf of the Partnership.

Affiliates of the Corporate  General  Partner  receive 5% of gross receipts from
the  Partnership's  property for providing  property  management  services.  The
Partnership  paid to such affiliates  approximately  $70,000 and $73,000 for the
years  ended  December  31,  2004 and 2003,  respectively,  which is included in
operating expenses.

Affiliates   of  the  Corporate   General   Partner   charged  the   Partnership
reimbursement of accountable  administrative expenses amounting to approximately
$78,000  and  $56,000  for  the  years  ended   December   31,  2004  and  2003,
respectively,  which is  included  in general and  administrative  expenses  and
investment property. The portion of these reimbursements  included in investment
property  for the years ended  December  31,  2004 and 2003 are fees  related to
construction  management  services  provided by an  affiliate  of the  Corporate
General  Partner  of  approximately  $20,000  and  $1,000,   respectively.   The
construction  management  service fees are  calculated  based on a percentage of
additions to the investment property.  For the year ended December 31, 2003, the
first three  quarters were based on estimated  amounts and in the fourth quarter
of 2003, the reimbursement of accountable  administrative  expenses was adjusted
based  on  actual  costs  (see  "Note  F").   The   adjustment   to   management
reimbursements was included in general and administrative  expenses. At December
31,  2004,  approximately  $38,000 in  reimbursements  was due to the  Corporate
General  Partner  and  is  included  in due to  affiliates  on the  accompanying
consolidated balance sheet.

Pursuant to the Partnership Agreement,  during the year ended December 31, 2004,
an  affiliate  of  the  Corporate   General  Partner  advanced  the  Partnership
approximately  $239,000  to  fund  operations  at  Governor's  Park  Apartments.
Interest is charged at the prime rate plus 2% (7.25% at December  31,  2004) and
was  approximately  $7,000 for the year ended  December 31, 2004.  There were no
such  advances  made or interest  charged  during 2003. At December 31, 2004 the
total  balance of advances  and accrued  interest due to the  Corporate  General
Partner was  approximately  $246,000 and is included in due to affiliates on the
accompanying consolidated balance sheet.

The  Partnership  insures its  property up to certain  limits  through  coverage
provided by AIMCO which is  generally  self-insured  for a portion of losses and
liabilities  related to workers  compensation,  property  casualty  and  vehicle
liability.  The Partnership  insures its property above the AIMCO limits through
insurance  policies  obtained  by  AIMCO  from  insurers  unaffiliated  with the
Corporate  General  Partner.  During the years ended December 31, 2004 and 2003,
the  Partnership was charged by AIMCO and its affiliates  approximately  $21,000
and $20,000,  respectively,  for  insurance  coverage and fees  associated  with
policy claims administration.

In addition to its  indirect  ownership of the general  partner  interest in the
Partnership,  AIMCO and its affiliates  owned 11,180 limited  partnership  units
(the "Units") in the Partnership representing 64.46% of the outstanding Units at
December  31,  2004.  A number of these Units were  acquired  pursuant to tender
offers  made by  AIMCO  or its  affiliates.  It is  possible  that  AIMCO or its
affiliates will acquire  additional  Units in exchange for cash or a combination
of cash and units in AIMCO Properties, L.P., the operating partnership of AIMCO,
either through private  purchases or tender offers.  Pursuant to the Partnership
Agreement,  unitholders  holding a majority  of the Units are  entitled  to take
action with  respect to a variety of matters that  include,  but are not limited
to,  voting on certain  amendments  to the  Partnership  Agreement and voting to
remove the Corporate General Partner.  As a result of its ownership of 64.46% of
the outstanding Units, AIMCO and its affiliates are in a position to control all
such voting  decisions with respect to the  Partnership.  Although the Corporate
General  Partner  owes  fiduciary   duties  to  the  limited   partners  of  the
Partnership,  the Corporate  General Partner also owes fiduciary duties to AIMCO
as its sole  stockholder.  As a  result,  the  duties of the  Corporate  General
Partner,  as  corporate  general  partner,  to the  Partnership  and its limited
partners may come into conflict with the duties of the Corporate General Partner
to AIMCO as its sole stockholder.

Note C - Mortgage Note Payable

The principal terms of the mortgage note payable are as follows:
<TABLE>
<CAPTION>

                         Principal      Monthly                             Principal
                         Balance At     Payment     Stated                   Balance
                        December 31,   Including   Interest   Maturity       Due At
                            2004       Interest      Rate       Date        Maturity
Property                     (in thousands)                              (in thousands)

Governor's Park
  Apartments
<S>                       <C>             <C>       <C>       <C>   <C>       <C>
  1st mortgage            $ 6,510         $ 55      7.12%     03/01/22        $ --
</TABLE>


The mortgage note payable is a fixed rate mortgage that is  non-recourse  and is
secured  by a pledge of the  Partnership's  rental  property  and by a pledge of
revenues  from the  rental  property.  The  mortgage  note  payable  includes  a
prepayment penalty if repaid prior to maturity. Further, the property may not be
sold subject to existing indebtedness.

Scheduled principal payments of the mortgage note payable subsequent to December
31, 2004 are as follows (in thousands):

                               2005              $ 199
                               2006                 214
                               2007                 230
                               2008                 247
                               2009                 265
                            Thereafter          $ 5,355
                               Total            $ 6,510

Note D - Real Estate and Accumulated Depreciation


                                                Initial Cost
                                               To Partnership
                                               (in thousands)
<TABLE>
<CAPTION>

                                                        Buildings           Cost
                                                       and Related      Capitalized
                                                        Personal       Subsequent to
Description               Encumbrances      Land        Property        Acquisition

Governor's Park
<S>                         <C>             <C>          <C>              <C>
  Apartments                $ 6,510         $ 714        $ 6,496          $ 1,230
</TABLE>

                             Gross Amount At Which Carried
                                  At December 31, 2004
                                     (in thousands)
<TABLE>
<CAPTION>

                           Buildings
                          And Related
                           Personal           Accumulated    Date of      Date    Depreciation
Description        Land    Property    Total  Depreciation Construction Acquired  Life-Years

<S>               <C>       <C>       <C>        <C>           <C>      <C>   <C>    <C>
Governor's Park   $ 714     $7,726    $8,440     $4,760        1983     09/30/85     5-39
</TABLE>

Reconciliation of "Real Estate and Accumulated Depreciation":

                                                  December 31,
                                              2004           2003
                                                 (in thousands)
Real Estate
Balance at beginning of year                $ 8,202         $ 8,097
  Property improvements                         238             105
Balance at end of year                      $ 8,440         $ 8,202

Accumulated Depreciation
Balance at beginning of year                $ 4,522         $ 4,297
  Additions charged to expense                  238             225
Balance at end of year                      $ 4,760         $ 4,522

The  aggregate  cost of investment  property for Federal  income tax purposes at
December  31,  2004  and  2003  is  approximately   $8,984,000  and  $8,746,000,
respectively. The accumulated depreciation taken for Federal income tax purposes
at  December  31,  2004 and 2003 is  approximately  $7,093,000  and  $6,719,000,
respectively.

Note E - Income Taxes

The Partnership has received a ruling from the Internal  Revenue Service that it
will  be  classified  as  a  partnership   for  Federal   income  tax  purposes.
Accordingly, no provision for income taxes is made in the consolidated financial
statements of the  Partnership.  Taxable  income or loss of the  Partnership  is
reported in the income tax returns of its partners.

The  following is a  reconciliation  of reported  net (loss)  income and Federal
taxable loss (in thousands, except per unit data):

                                                     2004         2003
Net (loss) income as reported                       $ (99)        $ 93
Add (deduct):
   Depreciation differences                           (136)        (109)
   Unearned income                                     (27)           6
   Other                                                40          (37)

Federal taxable loss                                $ (222)      $ (47)
Federal taxable loss per limited
   partnership unit                                $(12.66)     $ (2.68)

The following is a reconciliation between the Partnership's reported amounts and
Federal tax basis of net assets and liabilities (in thousands):

               Net liabilities as reported           $(2,883)
               Buildings                                 544
               Accumulated depreciation               (2,333)
               Syndication fees                        2,292
               Other                                      79

               Net liabilities - tax basis           $(2,301)

Note F - Fourth-Quarter Adjustment

The Partnership's policy is to record management reimbursements to the Corporate
General Partner as allowed under the Partnership Agreement on a quarterly basis,
using estimated financial information furnished by an affiliate of the Corporate
General Partner.  For the first three quarters of 2003, these  reimbursements of
accountable  administrative expenses were based on estimated amounts. During the
fourth  quarter of 2003,  the  Partnership  recorded an adjustment to management
reimbursements to the Corporate General Partner of approximately  $47,000 due to
a difference in the estimated  costs and the actual costs  incurred.  The actual
management  reimbursements  to the Corporate  General Partner for the year ended
December  31,  2003  was  approximately  $55,000,   compared  to  the  estimated
management  reimbursements  to the Corporate General Partner for the nine months
ended September 30, 2003 of approximately  $76,000. The adjustment to management
reimbursements was included in general and administrative expenses.

Note G - Contingencies

In March 1998, several putative unit holders of limited partnership units of the
Partnership  commenced an action  entitled  Rosalie  Nuanes,  et al. v. Insignia
Financial Group, Inc., et al. (the "Nuanes action") in the Superior Court of the
State of  California  for the  County  of San  Mateo.  The  plaintiffs  named as
defendants,  among others,  the Partnership,  its Corporate  General Partner and
several of their  affiliated  partnerships  and corporate  entities.  The action
purported  to  assert  claims  on  behalf  of a class of  limited  partners  and
derivatively  on behalf  of a number  of  limited  partnerships  (including  the
Partnership)  that are named as nominal  defendants,  challenging,  among  other
things,  the  acquisition  of interests  in certain  Corporate  General  Partner
entities by Insignia Financial Group, Inc.  ("Insignia") and entities that were,
at one  time,  affiliates  of  Insignia;  past  tender  offers  by the  Insignia
affiliates to acquire limited partnership units;  management of the partnerships
by the  Insignia  affiliates;  and the series of  transactions  which  closed on
October 1, 1998 and February 26, 1999 whereby  Insignia and Insignia  Properties
Trust,  respectively,  were merged into AIMCO.  The plaintiffs  sought  monetary
damages and equitable relief, including judicial dissolution of the Partnership.
In addition, during the third quarter of 2001, a complaint (the "Heller action")
was filed  against  the same  defendants  that are named in the  Nuanes  action,
captioned  Heller v.  Insignia  Financial  Group.  On or about  August 6,  2001,
plaintiffs filed a first amended  complaint.  The Heller action was brought as a
purported derivative action, and asserted claims for, among other things, breach
of fiduciary  duty,  unfair  competition,  conversion,  unjust  enrichment,  and
judicial dissolution.

On January 8, 2003,  the parties filed a  Stipulation  of Settlement in proposed
settlement of the Nuanes action and the Heller action.

In general  terms,  the  proposed  settlement  provides  for  certification  for
settlement  purposes of a settlement class consisting of all limited partners in
this  Partnership and others (the  "Partnerships")  as of December 20, 2002, the
dismissal  with  prejudice  and  release  of claims  in the  Nuanes  and  Heller
litigation,  payment by AIMCO of $9.9  million  (which shall be  distributed  to
settlement  class  members  after  deduction of attorney fees and costs of class
counsel and certain costs of settlement) and up to $1 million toward the cost of
independent  appraisals of the  Partnerships'  properties  by a Court  appointed
appraiser. An affiliate of the Corporate General Partner has also agreed to make
at least one round of tender offers to purchase all of the partnership interests
in the Partnerships within one year of final approval,  if it is granted, and to
provide  partners with the independent  appraisals at the time of these tenders.
The proposed  settlement also provided for the limitation of the allowable costs
which  the  Corporate   General  Partner  or  its  affiliates  will  charge  the
Partnerships  in connection with this litigation and imposes limits on the class
counsel  fees and  costs in this  litigation.  On April  11,  2003,  notice  was
distributed  to  limited   partners   providing  the  details  of  the  proposed
settlement.

On June 13, 2003, the Court granted final approval of the settlement and entered
judgment in both the Nuanes and Heller actions.  On August 12, 2003, an objector
("Objector")  filed an  appeal  seeking  to  vacate  and/or  reverse  the  order
approving the settlement and entering  judgment  thereto.  On November 24, 2003,
the Objector filed an  application  requesting the Court order AIMCO to withdraw
settlement  tender offers it had  commenced,  refrain from making further offers
pending the appeal and auction any units tendered to third  parties,  contending
that the offers did not conform  with the terms of the  Settlement.  Counsel for
the Objector (on behalf of another  investor)  had  alternatively  requested the
Court take certain  action  purportedly  to enforce the terms of the  settlement
agreement.  On December 18, 2003,  the Court heard oral  argument on the motions
and denied  them both in their  entirety.  The  Objector  filed a second  appeal
challenging the court's use of a referee and its order requiring Objector to pay
those fees.

On January 28, 2004,  the  Objector  filed his opening  brief in the Appeal.  On
April 23,  2004,  the  Corporate  General  Partner  and its  affiliates  filed a
response  brief in support  of the  settlement  and the  judgment  thereto.  The
plaintiffs  have also  filed a brief in support  of the  settlement.  On June 4,
2004,  Objector filed a reply to the briefs  submitted by the Corporate  General
Partner and  Plaintiffs.  In addition  both the  Objector and  plaintiffs  filed
briefs in connection  with the second  appeal.  On March 21, 2005,  the Court of
Appeals issued opinions in both pending  appeals.  With regard to the settlement
and judgment  entered  thereto,  the Court of Appeals  vacated the trial court's
order and remanded to the trial court for further findings on the basis that the
"state of the record is insufficient  to permit  meaningful  appellate  review".
With  regard to the  second  appeal,  the Court of  Appeals  reversed  the order
requiring the Objector to pay referee fees.

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

As previously disclosed,  AIMCO Properties L.P. and NHP Management Company, both
affiliates of the Corporate General Partner,  are defendants in an action in the
United States District Court,  District of Columbia.  The plaintiffs have styled
their  complaint  as a  collective  action  under the Fair Labor  Standards  Act
("FLSA") and seek to certify state subclasses in California,  Maryland,  and the
District of Columbia. Specifically, the plaintiffs contend that AIMCO Properties
L.P. failed to compensate  maintenance  workers for time that they were required
to be "on-call." Additionally, plaintiffs allege AIMCO Properties L.P. failed to
comply  with the FLSA in  compensating  maintenance  workers  for time that they
worked in responding to a call while  "on-call."  The  defendants  have filed an
answer to the amended complaint denying the substantive  allegations.  Discovery
relating  to the  certification  of the  collective  action  has  concluded  and
briefing in the matter is underway.  Although the outcome of any  litigation  is
uncertain,  AIMCO  Properties,  L.P. does not believe that the ultimate  outcome
will have a material  adverse  effect on its  financial  condition or results of
operations.  Similarly,  the Corporate General Partner does not believe that the
ultimate  outcome  will have a  material  adverse  effect  on the  Partnership's
consolidated financial condition or results of operations.

The  Partnership  is unaware  of any other  pending  or  outstanding  litigation
matters  involving  it or its  investment  properties  that are not of a routine
nature arising in the ordinary course of business.

Environmental

Various  Federal,  state and local laws subject  property owners or operators to
liability for management,  and the costs of removal or  remediation,  of certain
hazardous  substances  present on a property.  Such laws often impose  liability
without regard to whether the owner or operator knew of, or was responsible for,
the release or presence of the  hazardous  substances.  The  presence of, or the
failure to manage or remedy properly,  hazardous substances may adversely affect
occupancy at affected  apartment  communities and the ability to sell or finance
affected properties.  In addition to the costs associated with investigation and
remediation  actions brought by government  agencies,  the presence of hazardous
substances  on a  property  could  result in claims by  private  plaintiffs  for
personal injury,  disease,  disability or other  infirmities.  Various laws also
impose  liability for the cost of removal,  remediation or disposal of hazardous
substances  through a  licensed  disposal  or  treatment  facility.  Anyone  who
arranges for the disposal or treatment of hazardous  substances  is  potentially
liable  under such laws.  These laws often impose  liability  whether or not the
person arranging for the disposal ever owned or operated the disposal  facility.
In connection with the ownership and operation of its property,  the Partnership
could  potentially be liable for  environmental  liabilities or costs associated
with its property.

Mold

The Partnership is aware of lawsuits  against owners and managers of multifamily
properties asserting claims of personal injury and property damage caused by the
presence of mold, some of which have resulted in substantial  monetary judgments
or settlements. The Partnership has only limited insurance coverage for property
damage loss claims  arising from the  presence of mold and for  personal  injury
claims related to mold  exposure.  Affiliates of the Corporate  General  Partner
have  implemented a national  policy and procedures to prevent or eliminate mold
from its  properties  and the  Corporate  General  Partner  believes  that these
measures will eliminate,  or at least minimize, the effects that mold could have
on residents.  To date, the  Partnership  has not incurred any material costs or
liabilities  relating to claims of mold  exposure  or to abate mold  conditions.
Because the law regarding  mold is unsettled and subject to change the Corporate
General  Partner  can make no  assurance  that  liabilities  resulting  from the
presence of or exposure to mold will not have a material  adverse  effect on the
Partnership's consolidated financial condition or results of operations.

SEC Investigation

As  previously  disclosed,  the  Central  Regional  Office of the United  States
Securities  and  Exchange   Commission   (the  "SEC")  is  conducting  a  formal
investigation relating to certain matters.  Although the staff of the SEC is not
limited  in the  areas  that it may  investigate,  AIMCO  believes  the areas of
investigation include AIMCO's miscalculated monthly net rental income figures in
third quarter 2003,  forecasted  guidance,  accounts payable,  rent concessions,
vendor rebates, capitalization of payroll and certain other costs and tax credit
transactions.  AIMCO is cooperating fully. AIMCO is not able to predict when the
matter will be resolved.  AIMCO does not believe that the ultimate  outcome will
have a  material  adverse  effect on its  consolidated  financial  condition  or
results of operations. Similarly, the Corporate General Partner does not believe
that  the  ultimate   outcome  will  have  a  material  adverse  effect  on  the
Partnership's consolidated financial condition or results of operations.

Item 8.     Changes in and  Disagreements  with  Accountants on Accounting and
            Financial Disclosure

            None.

Item 8a.    Controls and Procedures

(a) Disclosure Controls and Procedures.  The Partnership's management,  with the
participation of the principal executive officer and principal financial officer
of the Corporate  General Partner,  who are the equivalent of the  Partnership's
principal executive officer and principal financial officer,  respectively,  has
evaluated  the  effectiveness  of  the  Partnership's  disclosure  controls  and
procedures (as such term is defined in Rules  13a-15(e) and 15d-15(e)  under the
Securities  Exchange Act of 1934, as amended (the "Exchange Act")) as of the end
of the period covered by this report.  Based on such  evaluation,  the principal
executive  officer and  principal  financial  officer of the  Corporate  General
Partner, who are the equivalent of the Partnership's principal executive officer
and principal  financial officer,  respectively,  have concluded that, as of the
end of such period,  the  Partnership's  disclosure  controls and procedures are
effective.

(b) Internal Control Over Financial  Reporting.  There have not been any changes
in the Partnership's  internal control over financial reporting (as such term is
defined in Rules  13a-15(f)  and  15d-15(f)  under the Exchange  Act) during the
fourth quarter of 2004 that have materially  affected,  or are reasonably likely
to  materially  affect,  the  Partnership's   internal  control  over  financial
reporting.

Item 8b.    Other Information

            None.



<PAGE>



                                    PART III

Item 9.     Directors,  Executive  Officers,  Promoters  and Control  Persons;
            Compliance with Section 16(a) of the Exchange Act

The Partnership has no directors or officers.  The Corporate  General Partner is
Shelter Realty VII Corporation.  The names and ages of, as well as the positions
and offices held by, the present directors and officers of the Corporate General
Partner are set forth below. There are no family relationships  between or among
any directors or officers.

Name                        Age    Position

Martha L. Long               45    Director and Senior Vice President
Harry G. Alcock              42    Director and Executive Vice President
Miles Cortez                 61    Executive Vice President, General Counsel
                                     and Secretary
Patti K. Fielding            41    Executive Vice President
Paul J. McAuliffe            48    Executive Vice President and Chief
                                     Financial Officer
Thomas M. Herzog             42    Senior Vice President and Chief Accounting
                                     Officer
Stephen B. Waters            43    Vice President

Martha L. Long has been a Director and Senior Vice  President of the Corporate
General  Partner  since  February  2004.  Ms.  Long has been with AIMCO  since
October  1998 and has served in  various  capacities.  From 1998 to 2001,  Ms.
Long  served  as  Senior  Vice  President  and  Controller  of  AIMCO  and the
Corporate  General  Partner.  During 2002 and 2003,  Ms. Long served as Senior
Vice President of Continuous Improvement for AIMCO.

Harry G. Alcock was appointed as a Director of the Corporate  General Partner in
October 2004 and was appointed Executive Vice President of the Corporate General
Partner  in  February  2004 and has been  Executive  Vice  President  and  Chief
Investment Officer of AIMCO since October 1999. Prior to October 1999 Mr. Alcock
served as a Vice President of AIMCO from July 1996 to October 1997,  when he was
promoted to Senior Vice  President  Acquisitions  where he served until  October
1999. Mr. Alcock has had responsibility for acquisition and financing activities
of AIMCO since July 1994.

Miles  Cortez was  appointed  Executive  Vice  President,  General  Counsel  and
Secretary  of the  Corporate  General  Partner in February  2004 and of AIMCO in
August 2001. Prior to joining AIMCO, Mr. Cortez was the senior partner of Cortez
Macaulay Bernhardt & Schuetze LLC, a Denver law firm, from December 1997 through
September 2001.

Patti K. Fielding was appointed  Executive  Vice President - Securities and Debt
of the Corporate General Partner in February 2004 and of AIMCO in February 2003.
Ms.  Fielding was appointed  Treasurer of AIMCO in January 2005. Ms. Fielding is
responsible  for  debt  financing  and the  treasury  department.  Ms.  Fielding
previously  served as Senior Vice  President - Securities and Debt of AIMCO from
January 2000 to February 2003. Ms.  Fielding  joined AIMCO in February 1997 as a
Vice President.

Paul J. McAuliffe has been Executive Vice President and Chief Financial  Officer
of the Corporate  General Partner since April 2002. Mr.  McAuliffe has served as
Executive Vice  President of AIMCO since  February 1999 and was appointed  Chief
Financial Officer of AIMCO in October 1999. From May 1996 until he joined AIMCO,
Mr. McAuliffe was Senior Managing Director of Secured Capital Corp.

Thomas M.  Herzog was  appointed  Senior  Vice  President  and Chief  Accounting
Officer  of the  Corporate  General  Partner  in  February  2004 and of AIMCO in
January 2004.  Prior to joining AIMCO in January 2004, Mr. Herzog was at GE Real
Estate,  serving as Chief Accounting Officer & Global Controller from April 2002
to January  2004 and as Chief  Technical  Advisor from March 2000 to April 2002.
Prior to joining GE Real  Estate,  Mr.  Herzog was at Deloitte & Touche LLP from
1990 until 2000.

Stephen B. Waters was appointed Vice President of the Corporate  General Partner
in April  2004.  Mr.  Waters  previously  served as a  Director  of Real  Estate
Accounting   since   joining   AIMCO  in   September   1999.   Mr.   Waters  has
responsibilities for real estate and partnership accounting with AIMCO.

One or more of the above persons are also directors and/or officers of a general
partner (or general partner of a general partner) of limited  partnerships which
either have a class of  securities  registered  pursuant to Section 12(g) of the
Securities Exchange Act of 1934, or are subject to the reporting requirements of
Section  15(d) of such Act.  Further,  one or more of the above persons are also
directors and/or officers of Apartment Investment and Management Company and the
general  partner  of  AIMCO  Properties,  L.P.,  entities  that  have a class of
securities  registered  pursuant to Section 12(g) of the Securities Exchange Act
of 1934, or are subject to the reporting  requirements of Section 15 (d) of such
Act.

The board of directors of the Corporate General Partner does not have a separate
audit  committee.  As such,  the board of  directors  of the  Corporate  General
Partner fulfills the functions of an audit committee. The board of directors has
determined  that  Martha L. Long meets the  requirement  of an "audit  committee
financial expert".

The directors and officers of the Corporate  General Partner with authority over
the Partnership are all employees of subsidiaries of AIMCO.  AIMCO has adopted a
code of ethics that applies to such  directors  and  officers  that is posted on
AIMCO's  website  (www.AIMCO.com).   AIMCO's  website  is  not  incorporated  by
reference to this filing.

Item 10.    Executive Compensation

None of the directors and officers of the Corporate General Partner received any
remuneration from the Partnership.

Item 11.    Security Ownership of Certain Beneficial Owners and Management

Except as noted below,  no person or entity was known by the  Partnership  to be
the  beneficial  owner of more than 5% of the Limited  Partnership  Units of the
Partnership as of December 31, 2004.

                Name and Address           Number of Units   Percentage of Total
       Madison River Properties, LLC            2,180               12.57%
         (an affiliate of AIMCO)
       Cooper River Properties, LLC             1,450                8.36%
         (an affiliate of AIMCO)
       AIMCO Properties, L.P.                   7,303               42.11%
         (an affiliate of AIMCO)
       AIMCO IPLP, L.P.                           247                1.42%
          (an affiliate of AIMCO)

AIMCO IPLP, L.P., Madison River Properties, LLC and Cooper River Properties, LLC
are all indirectly  ultimately owned by AIMCO.  Their business  addresses are 55
Beattie Place, Greenville, SC 29602.

AIMCO Properties,  L.P. is indirectly  ultimately owned by AIMCO. Its business
address is 4582 S. Ulster St. Parkway, Suite 1100, Denver, Colorado 80237.

No director or officer of the  Corporate  General  Partner  owns any Units.  The
Corporate  General  Partner  owns 100  Units  as  required  by the  terms of the
Partnership  Agreement  governing the Partnership.  AIMCO Properties,  L.P., the
other general partner, owns 7,303 Units.

Item 12.    Certain Relationships and Related Transactions

The  Partnership  has no employees and depends on the Corporate  General Partner
and its  affiliates for the management  and  administration  of all  partnership
activities.  The  Partnership  Agreement  provides  for (i) certain  payments to
affiliates for services and (ii)  reimbursement of certain expenses  incurred by
affiliates on behalf of the Partnership.

Affiliates of the Corporate  General  Partner  receive 5% of gross receipts from
the  Partnership's  property for providing  property  management  services.  The
Partnership  paid to such affiliates  approximately  $70,000 and $73,000 for the
years  ended  December  31,  2004 and 2003,  respectively,  which is included in
operating expenses.

Affiliates   of  the  Corporate   General   Partner   charged  the   Partnership
reimbursement of accountable  administrative expenses amounting to approximately
$78,000  and  $56,000  for  the  years  ended   December   31,  2004  and  2003,
respectively,  which is  included  in general and  administrative  expenses  and
investment property. The portion of these reimbursements  included in investment
property  for the years ended  December  31,  2004 and 2003 are fees  related to
construction  management  services  provided by an  affiliate  of the  Corporate
General  Partner  of  approximately  $20,000  and  $1,000,   respectively.   The
construction  management  service fees are  calculated  based on a percentage of
additions to the investment property.  For the year ended December 31, 2003, the
first three  quarters were based on estimated  amounts and in the fourth quarter
of 2003, the reimbursement of accountable  administrative  expenses was adjusted
based on actual  costs  (see  "Item 7.  Financial  Statements  - Note  F").  The
adjustment   to   management   reimbursements   was   included  in  general  and
administrative   expenses.  At  December  31,  2004,  approximately  $38,000  in
reimbursements  was due to the Corporate  General Partner and is included in due
to affiliates on the accompanying consolidated balance sheet.

Pursuant to the Partnership Agreement,  during the year ended December 31, 2004,
an  affiliate  of  the  Corporate   General  Partner  advanced  the  Partnership
approximately  $239,000  to  fund  operations  at  Governor's  Park  Apartments.
Interest is charged at the prime rate plus 2% (7.25% at December  31,  2004) and
was  approximately  $7,000 for the year ended  December 31, 2004.  There were no
such  advances  made or interest  charged  during 2003. At December 31, 2004 the
total  balance of advances  and accrued  interest due to the  Corporate  General
Partner was  approximately  $246,000 and is included in due to affiliates on the
accompanying consolidated balance sheet.

The  Partnership  insures its  property up to certain  limits  through  coverage
provided by AIMCO which is  generally  self-insured  for a portion of losses and
liabilities  related to workers  compensation,  property  casualty  and  vehicle
liability.  The Partnership  insures its property above the AIMCO limits through
insurance  policies  obtained  by  AIMCO  from  insurers  unaffiliated  with the
Corporate  General  Partner.  During the years ended December 31, 2004 and 2003,
the  Partnership was charged by AIMCO and its affiliates  approximately  $21,000
and $20,000,  respectively,  for  insurance  coverage and fees  associated  with
policy claims administration.

In addition to its  indirect  ownership of the general  partner  interest in the
Partnership,  AIMCO and its affiliates  owned 11,180 limited  partnership  units
(the "Units") in the Partnership representing 64.46% of the outstanding Units at
December  31,  2004.  A number of these Units were  acquired  pursuant to tender
offers  made by  AIMCO  or its  affiliates.  It is  possible  that  AIMCO or its
affiliates will acquire  additional  Units in exchange for cash or a combination
of cash and units in AIMCO Properties, L.P., the operating partnership of AIMCO,
either through private  purchases or tender offers.  Pursuant to the Partnership
Agreement,  unitholders  holding a majority  of the Units are  entitled  to take
action with  respect to a variety of matters that  include,  but are not limited
to,  voting on certain  amendments  to the  Partnership  Agreement and voting to
remove the Corporate General Partner.  As a result of its ownership of 64.46% of
the outstanding Units, AIMCO and its affiliates are in a position to control all
such voting  decisions with respect to the  Partnership.  Although the Corporate
General  Partner  owes  fiduciary   duties  to  the  limited   partners  of  the
Partnership,  the Corporate  General Partner also owes fiduciary duties to AIMCO
as its sole  stockholder.  As a  result,  the  duties of the  Corporate  General
Partner,  as  corporate  general  partner,  to the  Partnership  and its limited
partners may come into conflict with the duties of the Corporate General Partner
to AIMCO as its sole stockholder.

Item 13.    Exhibits

            See Exhibit Index Attached.

Item 14.    Principal Accountant Fees and Services

The Corporate  General Partner has reappointed  Ernst & Young LLP as independent
auditors to audit the financial  statements  of the  Partnership  for 2005.  The
aggregate  fees billed for  services  rendered by Ernst & Young LLP for 2004 and
2003 are described below.

Audit Fees. Fees for audit services  totaled  approximately  $24,000 and $32,000
for 2004 and 2003,  respectively.  Fees for audit services also include fees for
the reviews of the Partnership's Quarterly Reports on Form 10-QSB.

Tax Fees. Fees for tax services  totaled  approximately  $11,000 and $10,000 for
2004 and 2003, respectively.

                                   SIGNATURES



In accordance with the  requirements of the Exchange Act, the Registrant  caused
this  report to be  signed on its  behalf  by the  undersigned,  thereunto  duly
authorized.


                                    SHELTER PROPERTIES VII LIMITED PARTNERSHIP


                                    By:   Shelter Realty VII Corporation
                                          Corporate General Partner


                                    By:   /s/Martha L. Long
                                          Martha L. Long
                                          Senior Vice President


                                    By:   /s/Stephen B. Waters
                                          Stephen B. Waters
                                          Vice President


                                    Date: March 25, 2005


In accordance with the  requirements of the Exchange Act, the registrant  caused
this  report to be  signed on its  behalf  by the  undersigned,  thereunto  duly
authorized.


/s/Harry G. Alcock            Director and Executive   Date: March 25, 2005
Harry G. Alcock               Vice President


/s/Martha L. Long             Director and Senior Vice Date: March 25, 2005
Martha L. Long                President


/s/Stephen B. Waters          Vice President           Date: March 25, 2005
Stephen B. Waters



<PAGE>



                                  EXHIBIT INDEX


Exhibit

 3                See Exhibit 4(a)

 4     (a)        Amended and Restated  Certificate  and  Agreement of Limited
                  Partnership.  [included  as Exhibit A to the  Prospectus  of
                  Registrant  dated March 18, 1985  contained in Amendment No.
                  1 to  Registration  Statement  No.  2-94604,  of  Registrant
                  filed March 18,  1985 (the  "Prospectus")  and  incorporated
                  herein by reference].

       (b)        Subscription   Agreements  and  Signature  Pages  [Filed  with
                  Amendment  No. 1 of  Registration  Statement No.  2-94604,  of
                  Registrant  filed  March 18, 1985 and  incorporated  herein by
                  reference].

10(i)(b)          Purchase  Agreement  dated January 14, 1985,  between  NFC/TDM
                  Joint  Venture  and  U.S.   Shelter   Corporation  to  acquire
                  Governor's  Park  Apartments.   [Filed  as  Exhibit  10(F)  to
                  Post-Effective  Amendment No. 2 of Registration  Statement No.
                  2-94604 of the Registrant filed June 27, 1985 and incorporated
                  herein by reference].

10(ii)            Form of Management  Agreement  with U.S.  Shelter  Corporation
                  subsequently  assigned to Shelter  Management Group, L.P. (now
                  known  as  Insignia   Management  Group,  L.P.).  [Filed  with
                  Amendment  No. 1 of  Registration  Statement,  No.  2-94604 of
                  Registrant  filed  March 18, 1985 and  incorporated  herein by
                  reference].

10(iii)           Contracts related to refinancing of debt:

 2.1(k)           Multifamily  Note secured by a Mortgage or Deed of Trust dated
                  February  6, 2002,  between  Governor's  Park  Apartments  VII
                  Limited  Partnership  and ARCS  Commercial  Mortgage Co., L.P.
                  related to Governor's Park Apartments.

22                Subsidiaries of the Registrant

31.1              Certification  of  equivalent  of  Chief  Executive  Officer
                  pursuant     to     Securities     Exchange     Act    Rules
                  13a-14(a)/15d-14(a),  as Adopted  Pursuant to Section 302 of
                  the Sarbanes-Oxley Act of 2002.

31.2              Certification  of  equivalent  of  Chief  Financial  Officer
                  pursuant     to     Securities     Exchange     Act    Rules
                  13a-14(a)/15d-14(a),  as Adopted  Pursuant to Section 302 of
                  the Sarbanes-Oxley Act of 2002.

32.1              Certification   Pursuant  to  18  U.S.C.  Section  1350,  as
                  Adopted  Pursuant to Section 906 of the  Sarbanes-Oxley  Act
                  of 2002.

99     (a)        Prospectus of Registrant  dated March 18, 1985  [included in
                  Registration   Statement  No.  2-94604  of  Registrant]  and
                  incorporated herein by reference.

       (b)        Agreement  of  Limited   Partnership   for   Governor's   Park
                  Apartments VII Limited  Partnership between Shelter Properties
                  VII GP Limited  Partnership and Shelter Properties VII Limited
                  Partnership entered into September 9, 1993.****

       (c)        Agreement of Limited Partnership for Shelter Properties VII GP
                  Limited  Partnership  between Shelter VII Limited  Partnership
                  and Shelter Realty VII Corporation.****

                  ****Filed  as  Exhibits  28 (a) and (b) to Form  10-QSB  dated
                  December 31, 1993 and incorporated herein by reference.


                                   EXHIBIT 22


                  SHELTER PROPERTIES VII LIMITED PARTNERSHIP


                                 Subsidiary List



                                        State of Incorporation/
         Name of Subsidiary                    Formation                  Date

Governor's Park Apartments VII
  Limited Partnership                       South Carolina                1993

Shelter VII GP Limited Partnership          South Carolina                1993



Exhibit 31.1


                                  CERTIFICATION


I, Martha L. Long, certify that:


1.    I have reviewed  this annual  report on Form 10-KSB of Shelter  Properties
      VII Limited Partnership;

2.    Based on my knowledge,  this report does not contain any untrue  statement
      of a material fact or omit to state a material fact  necessary to make the
      statements made, in light of the circumstances under which such statements
      were made,  not  misleading  with  respect  to the period  covered by this
      report;

3.    Based on my  knowledge,  the  financial  statements,  and other  financial
      information  included  in this  report,  fairly  present  in all  material
      respects the financial condition,  results of operations and cash flows of
      the small  business  issuer as of, and for, the periods  presented in this
      report;

4.    The  small  business  issuer's  other  certifying  officer(s)  and  I  are
      responsible  for  establishing  and  maintaining  disclosure  controls and
      procedures (as defined in Exchange Act Rules  13a-15(e) and 15d-15(e)) for
      the small business issuer and have:

      (a)   Designed such  disclosure  controls and  procedures,  or caused such
            disclosure   controls  and  procedures  to  be  designed  under  our
            supervision,  to ensure that  material  information  relating to the
            small business issuer, including its consolidated  subsidiaries,  is
            made  known to us by  others  within  those  entities,  particularly
            during the period in which this report is being prepared;

      (b)   Evaluated  the   effectiveness   of  the  small  business   issuer's
            disclosure  controls and procedures and presented in this report our
            conclusions about the  effectiveness of the disclosure  controls and
            procedures, as of the end of the period covered by this report based
            on such evaluation; and

      (c)   Disclosed in this report any change in the small  business  issuer's
            internal  control over financial  reporting that occurred during the
            small  business  issuer's  most  recent  fiscal  quarter  (the small
            business  issuer's  fourth  fiscal  quarter in the case of an annual
            report) that has  materially  affected,  or is reasonably  likely to
            materially affect, the small business issuer's internal control over
            financial reporting; and

5.    The  small  business  issuer's  other  certifying  officer(s)  and I  have
      disclosed,  based on our most recent  evaluation of internal  control over
      financial reporting, to the small business issuer's auditors and the audit
      committee of the small  business  issuer's  board of directors (or persons
      performing the equivalent functions):

      (a)   All significant  deficiencies and material  weaknesses in the design
            or operation of internal control over financial  reporting which are
            reasonably  likely to adversely  affect the small business  issuer's
            ability  to  record,   process,   summarize  and  report   financial
            information; and

      (b)   Any fraud,  whether or not  material,  that  involves  management or
            other  employees who have a significant  role in the small  business
            issuer's internal control over financial reporting.


Date:  March 25, 2005

                                    /s/Martha L. Long
                                    Martha L. Long
                                    Senior  Vice  President  Shelter  Realty VII
                                    Corporation,   equivalent   of   the   chief
                                    executive officer of the Partnership


<PAGE>



Exhibit 31.2


                                  CERTIFICATION


I, Stephen B. Waters, certify that:


1.    I have reviewed  this annual  report on Form 10-KSB of Shelter  Properties
      VII Limited Partnership;

2.    Based on my knowledge,  this report does not contain any untrue  statement
      of a material fact or omit to state a material fact  necessary to make the
      statements made, in light of the circumstances under which such statements
      were made,  not  misleading  with  respect  to the period  covered by this
      report;

3.    Based on my  knowledge,  the  financial  statements,  and other  financial
      information  included  in this  report,  fairly  present  in all  material
      respects the financial condition,  results of operations and cash flows of
      the small  business  issuer as of, and for, the periods  presented in this
      report;

4.    The  small  business  issuer's  other  certifying  officer(s)  and  I  are
      responsible  for  establishing  and  maintaining  disclosure  controls and
      procedures (as defined in Exchange Act Rules  13a-15(e) and 15d-15(e)) for
      the small business issuer and have:

      (a)   Designed such  disclosure  controls and  procedures,  or caused such
            disclosure   controls  and  procedures  to  be  designed  under  our
            supervision,  to ensure that  material  information  relating to the
            small business issuer, including its consolidated  subsidiaries,  is
            made  known to us by  others  within  those  entities,  particularly
            during the period in which this report is being prepared;

      (b)   Evaluated  the   effectiveness   of  the  small  business   issuer's
            disclosure  controls and procedures and presented in this report our
            conclusions about the  effectiveness of the disclosure  controls and
            procedures, as of the end of the period covered by this report based
            on such evaluation; and

      (c)   Disclosed in this report any change in the small  business  issuer's
            internal  control over financial  reporting that occurred during the
            small  business  issuer's  most  recent  fiscal  quarter  (the small
            business  issuer's  fourth  fiscal  quarter in the case of an annual
            report) that has  materially  affected,  or is reasonably  likely to
            materially affect, the small business issuer's internal control over
            financial reporting; and

5.    The  small  business  issuer's  other  certifying  officer(s)  and I  have
      disclosed,  based on our most recent  evaluation of internal  control over
      financial reporting, to the small business issuer's auditors and the audit
      committee of the small  business  issuer's  board of directors (or persons
      performing the equivalent functions):

      (a)   All significant  deficiencies and material  weaknesses in the design
            or operation of internal control over financial  reporting which are
            reasonably  likely to adversely  affect the small business  issuer's
            ability  to  record,   process,   summarize  and  report   financial
            information; and

      (b)   Any fraud,  whether or not  material,  that  involves  management or
            other  employees who have a significant  role in the small  business
            issuer's internal control over financial reporting.

Date:  March 25, 2005

                                    /s/Stephen B. Waters
                                    Stephen B. Waters
                                    Vice President of Shelter Realty VII
                                    Corporation, equivalent of the chief
                                    financial officer of the Partnership


<PAGE>


Exhibit 32.1


                          Certification of CEO and CFO
                       Pursuant to 18 U.S.C. Section 1350,
                             As Adopted Pursuant to
                Section 906 of the Sarbanes-Oxley Act of 2002



In connection  with the Annual Report on Form 10-KSB of Shelter  Properties  VII
Limited Partnership (the "Partnership"), for the year ended December 31, 2004 as
filed with the  Securities  and  Exchange  Commission  on the date  hereof  (the
"Report"),  Martha L. Long, as the equivalent of the Chief Executive  Officer of
the Partnership, and Stephen B. Waters, as the equivalent of the Chief Financial
Officer of the Partnership, each hereby certifies, pursuant to 18 U.S.C. Section
1350,  as adopted  pursuant  to Section 906 of the  Sarbanes-Oxley  Act of 2002,
that, to the best of his knowledge:

      (1)   The Report fully complies with the  requirements of Section 13(a) or
            15(d) of the Securities Exchange Act of 1934; and

      (2)   The  information  contained in the Report  fairly  presents,  in all
            material respects, the financial condition and results of operations
            of the Partnership.


                                           /s/Martha L. Long
                                    Name:  Martha L. Long
                                    Date:  March 25, 2005


                                           /s/Stephen B. Waters
                                    Name:  Stephen B. Waters
                                    Date:  March 25, 2005


This  certification is furnished with this Report pursuant to Section 906 of the
Sarbanes-Oxley  Act of 2002 and shall not be deemed filed by the Partnership for
purposes of Section 18 of the Securities Exchange Act of 1934, as amended.