FORM 10-KSB--ANNUAL OR TRANSITIONAL REPORT UNDER
                               SECTION 13 OR 15(d)

                                   Form 10-KSB
(Mark One)
[X]   ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
      OF 1934
      [No Fee Required]

                 For the fiscal year ended December 31, 2000

[ ]   TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
      ACT OF 1934
      [No Fee Required]

             For the transition period from _________to _________

                         Commission file number 0-14369

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

      South Carolina                                            54-0784852
(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.  $4,119,000

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, 2000. 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
-
                                     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").  The only other general
partner of the Partnership was N. Barton Tuck, Jr. Mr. Tuck was not an affiliate
of  the  Corporate  General  Partner  and  was  effectively  prohibited  by  the
Partnership's   partnership   agreement  (the   "Partnership   Agreement")  from
participating  in the  management of the  Partnership.  In June 1999, Mr. Tuck's
general   partnership   interest  in  the  Registrant  was  purchased  by  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  Registrant  is engaged in the business of operating and holding real estate
properties  for  investment.  The  Registrant  acquired two  existing  apartment
properties  and a  newly  constructed  apartment  property  during  1985  in its
acquisition  phase.  The  Registrant  continues  to own and operate two of these
properties. See "Item 2. Description of Properties".

Commencing  March 18, 1985 the  Registrant  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 Registrant 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 Registrant  has not received,  nor are limited
partners required to make any additional capital contributions.

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 properties
owned by the Partnership.

The Partnership  monitors its properties 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.

Both  the  income  and  expenses  of  operating  the  properties  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.

The  real  estate  business  in which  the  Partnership  is  engaged  is  highly
competitive.  There are other  residential  properties within the market area of
the Registrant's  properties.  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  properties  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

<PAGE>


insignificant  percentage  of total  apartment  units in the  United  States and
competition for the apartment is local.

The Registrant  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.

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.

Transfer of Control

Pursuant  to a series  of  transactions  which  closed  on  October  1, 1998 and
February 26, 1999,  Insignia Financial Group, Inc. and Insignia Properties Trust
merged into AIMCO, a publicly traded real estate  investment  trust,  with AIMCO
being the surviving  corporation.  As a result,  AIMCO  acquired 100%  ownership
interest in the Corporate  General Partner.  The Corporate  General Partner does
not believe that this  transaction has had or will have a material effect on the
affairs and operations of the Partnership.

Item 2.  Description of Properties:

The following table sets forth the Registrant's investments in properties:

<TABLE>
<CAPTION>

                                   Date of
Properties                         Purchase       Type of Ownership           Use

<S>                                <C>       <C>                          <C>
Hickory Ridge Apartments           08/27/85  Fee ownership, subject to   Apartment
  Memphis, Tennessee                         first mortgage              378 units


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

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

Schedule of Properties:

Set forth below for each of the  Registrant's  properties is the gross  carrying
value, accumulated depreciation,  depreciable life, method of depreciation,  and
Federal tax basis.

<TABLE>
<CAPTION>


                               Gross
                              Carrying  Accumulated                         Federal
Properties                     Value    Depreciation    Rate     Method    Tax Basis
                                 (in thousands)                          (in thousands)

<S>                           <C>         <C>        <C>           <C>      <C>
Hickory Ridge Apartments      $15,698     $ 8,540    5-29 years    S/L      $ 6,215

Governor's Park Apartments      7,926       3,837    5-39 years    S/L        2,744

           Totals             $23,624     $12,377                           $ 8,959
</TABLE>

See "Note A" to the consolidated financial statements included in "Item 7" for a
description of the Partnership's depreciation policy.


<PAGE>



Schedule of Property Indebtedness:

The  following  table  sets  forth  certain  information  relating  to the loans
encumbering the Registrant's properties.

<TABLE>
<CAPTION>

                           Principal                                        Principal
                           Balance At    Stated                              Balance
                          December 31,  Interest    Period     Maturity      Due At
Properties                    2000        Rate    Amortized     Date      Maturity (3)
                         (in thousands)                                  (in thousands)


<S>                         <C>           <C>     <C>        <C>            <C>
Hickory Ridge Apartments    $ 6,070       7.50%   300 months 03/01/01 (2)    $ 6,057

Governor's Park Apartments
  1st mortgage                4,321       7.83%   344 months   10/15/03        4,083
  2nd mortgage                  147       7.83%      (1)       10/15/03          147
                             10,538
Less unamortized
  mortgage discounts            (40)

         Total              $10,498                                          $10,287
</TABLE>

(1)   Interest only payments.

(2)   During January 2001, the Partnership paid approximately  $30,000 to extend
      the maturity of the loan to August 1, 2001. If the property cannot be sold
      or refinanced prior to this extension period then the Partnership may risk
      losing this property through foreclosure.

(3)   See "Item 7. Financial  Statements - Note D" for information  with respect
      to the  Registrant's  ability  to repay  these  loans and  other  specific
      details about the loans.

Schedule of Rental Rates and Occupancy:

The following table sets forth the average annual rental rates and occupancy for
2000 and 1999 for each property.

<TABLE>
<CAPTION>

                                       Average Annual                 Average
                                        Rental Rates                 Occupancy
                                         (per unit)
 Properties                         2000            1999          2000        1999

<S>                                <C>            <C>             <C>          <C>
 Hickory Ridge Apartments          $7,105         $6,774          94%          95%

 Governor's Park Apartments         8,847          8,727          93%          95%
</TABLE>

As noted under "Item 1.  Description of Business",  the real estate  industry is
highly competitive. The Partnership's properties are subject to competition from
other residential apartment complexes in the area. The Corporate General Partner
believes that both of the properties are adequately insured. Each 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.  Both of the properties
are in good physical condition, subject to normal depreciation and deterioration
as is typical for assets of this type and age.


<PAGE>



Schedule of Real Estate Taxes and Rates

Real estate taxes and rates in 2000 for each property were:

                                                2000            2000
                                               Billing          Rate
                                           (in thousands)

       Hickory Ridge Apartments                 $264            6.91%

       Governor's Park Apartments                 89            8.90%

Capital Improvements

Hickory Ridge:

The  Partnership  completed  approximately  $728,000 in capital  expenditures at
Hickory Ridge  Apartments  during the year ended  December 31, 2000,  consisting
primarily   of  major  fence   improvements,   appliance   and  floor   covering
replacements,  and other  building,  land,  and structural  improvements.  These
improvements were funded primarily from operations. The Partnership is currently
evaluating the capital  improvement needs of the property for the upcoming year.
The minimum  amount to be budgeted is expected to be $275 per unit or  $103,950.
Additional  improvements  may be  considered  and will  depend  on the  physical
condition of the property as well as replacement  reserves and anticipated  cash
flow generated by the property.

Governor's Park:

The  Partnership  completed  approximately  $154,000 in capital  expenditures at
Governor's Park Apartments  during the year ended December 31, 2000,  consisting
primarily  of  plumbing   enhancements   and   appliance   and  floor   covering
replacements.  These  improvements  were funded  primarily  from  operations and
replacement  reserves.  The  Partnership  is  currently  evaluating  the capital
improvement  needs of the property for the upcoming  year. The minimum amount to
be budgeted is expected to be $275 per unit or $51,700.  Additional improvements
may be considered  and will depend on the physical  condition of the property as
well  as  replacement  reserves  and  anticipated  cash  flow  generated  by the
property.


<PAGE>



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. in the Superior Court of the State of California
for the County of San Mateo. The plaintiffs  named as defendants,  among others,
the Partnership,  its Corporate  General Partner and several of their affiliated
partnerships  and corporate  entities.  The action  purports to assert claims on
behalf of a class of limited  partners and derivatively on behalf of a number of
limited  partnerships  (including  the  Partnership)  which are named as nominal
defendants,  challenging,  among other things,  the  acquisition of interests in
certain general partner entities by Insignia Financial Group, Inc.  ("Insignia")
and entities which were, at one time, affiliates of Insignia; past tender offers
by the Insignia affiliates to acquire limited  partnership units;  management of
the  partnerships  by the  Insignia  affiliates;  and the Insignia  Merger.  The
plaintiffs  seek  monetary  damages and  equitable  relief,  including  judicial
dissolution of the Partnership.  On June 25, 1998, the Corporate General Partner
filed a motion  seeking  dismissal of the action.  In lieu of  responding to the
motion, the plaintiffs filed an amended complaint. The Corporate General Partner
filed demurrers to the amended complaint which were heard February 1999.

Pending the ruling on such  demurrers,  settlement  negotiations  commenced.  On
November 2, 1999,  the parties  executed and filed a Stipulation  of Settlement,
settling claims, subject to court approval, on behalf of the Partnership and all
limited partners who owned units as of November 3, 1999. Preliminary approval of
the  settlement  was obtained on November 3, 1999 from the Court,  at which time
the Court set a final  approval  hearing for  December  10,  1999.  Prior to the
December  10,  1999  hearing,  the  Court  received  various  objections  to the
settlement, including a challenge to the Court's preliminary approval based upon
the alleged lack of authority of prior lead counsel to enter the settlement.  On
December 14, 1999, the Corporate  General Partner and its affiliates  terminated
the  proposed  settlement.  In  February  2000,  counsel  for some of the  named
plaintiffs filed a motion to disqualify plaintiff's lead and liaison counsel who
negotiated  the  settlement.  On June  27,  2000,  the  Court  entered  an order
disqualifying  them  from the case and an  appeal  was  taken  from the order on
October 5, 2000. On December 4, 2000, the Court  appointed the law firm of Lieff
Cabraser  Heimann & Bernstein  LLP as new lead  counsel for  plaintiffs  and the
putative class.  Plaintiffs filed a third amended complaint on January 19, 2001.
On March 2, 2001,  the  Corporate  General  Partner and its  affiliates  filed a
demurrer to the third amended complaint.  The Corporate General Partner does not
anticipate  that  costs  associated  with  this  case  will be  material  to the
Partnership's overall operations.

The  Partnership is unaware of any other pending or outstanding  litigation that
is not of a routine nature arising in the ordinary course of business.

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

During the quarter ended December 31, 2000, no matter was submitted to a vote of
the Unit holders through the solicitation of proxies or otherwise.



<PAGE>





                                     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 aggregating $17,343,000. The Partnership currently has
736 holders of record  owning an aggregate of 17,343  Units.  Affiliates  of the
Corporate  General Partner own 10,426 Units or approximately  60.12% at December
31, 2000. No public  trading  market has developed for the Units,  and it is not
anticipated that such a market will develop in the future.

The following table sets forth the distributions made by the Partnership for the
years ended December 31, 2000 and 1999 and subsequent to December 31, 2000.

                                                Distributions
                                                            Per Limited
                                        Aggregate        Partnership Unit
       01/01/99 - 12/31/99             $1,267,000 (1)         $72.13
       01/01/00 - 12/31/00                200,000 (2)          11.42
      Subsequent to 12/31/01               86,000 (2)           4.90

   (1)      Distribution  was made from cash from  operations.  The  Partnership
            paid approximately  $6,000 to Colorado for state tax withholdings on
            behalf of the  limited  partners  which is  included  in the  amount
            above.

   (2)            Distributions were made from cash from operations.

The Partnership's  distribution  policy is reviewed on a quarterly basis. Future
cash  distributions  will  depend  on the  levels  of net  cash  generated  from
operations, the availability of cash reserves, the timing of debt maturities and
refinancings  and/or  property  sales.  There  can  be  no  assurance  that  the
Partnership  will generate  sufficient  funds from  operations,  after  required
capital expenditures,  to permit any additional distributions to its partners in
2001 or subsequent  periods.  See "Item 2.  Description  of Properties - Capital
Improvements"   for  information   relating  to  capital   expenditures  at  the
properties.   In  addition,  the  Partnership  may  be  restricted  from  making
distributions  if  the  amount  in  the  reserve  account  for  Governor's  Park
Apartments  maintained  by the mortgage  lender is less than $200 per  apartment
unit at such property.  As of December 31, 2000,  the reserve  account was fully
funded with approximately $78,000 on deposit with the mortgage lender.

In addition to its  indirect  ownership of the general  partner  interest in the
Partnership,  AIMCO and its affiliates  currently own 10,426 limited partnership
units in the Partnership  representing 60.12% of the outstanding units. A number
of these  units were  acquired  pursuant  to tender  offers made by AIMCO or its
affiliates.  It is possible that AIMCO or its  affiliates  will make one or more
additional offers to acquire  additional  limited  partnership  interests in the
Partnership  for cash or in exchange for units in the operating  partnership  of
AIMCO. Under the Partnership  Agreement,  unitholders  holding a majority of the
Units are  entitled to take action with  respect to a variety of matters,  which
would  include  without   limitation,   voting  on  certain  amendments  to  the
Partnership  Agreement and voting to remove the Corporate General Partner.  As a
result  of its  ownership  of  60.12% of the  outstanding  units,  AIMCO is in a
position to influence all voting decisions with respect to the Registrant.  When
voting on matters, AIMCO would in all likelihood vote the Units it acquired in a
manner favorable to the interest of the Corporate General Partner because of its
affiliation with the Corporate General Partner.


<PAGE>



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

The  matters  discussed  in this Form  10-KSB  contain  certain  forward-looking
statements  and  involve  risks and  uncertainties  (including  changing  market
conditions, competitive and regulatory matters, etc.) detailed in the disclosure
contained  in this Form 10-KSB and the other  filings  with the  Securities  and
Exchange  Commission made by the Registrant from time to time. The discussion of
the Registrant's business and results of operations,  including  forward-looking
statements pertaining to such matters, does not take into account the effects of
any changes to the Registrant's business and results of operation.  Accordingly,
actual   results   could  differ   materially   from  those   projected  in  the
forward-looking  statements as a result of a number of factors,  including those
identified herein.

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

Results of Operations

The  Partnership's  net  income  for  the  year  ended  December  31,  2000  was
approximately $315,000, as compared to approximately $545,000 for the year ended
December  31,  1999.  The  decrease in net income is due to an increase in total
expenses  slightly  offset by an  increase  in total  revenues.  Total  revenues
increased  primarily  due to a casualty gain  recognized  during 2000 at Hickory
Ridge  Apartments and an increase in other income offset by a decrease in rental
income.  The  decrease  in rental  income was due  primarily  to a  decrease  in
occupancy at both of the Partnership's  properties which was partially offset by
an increase in average  rental  rates at both of the  properties.  Other  income
increased  due to an increase in late  charges  and lease  cancellation  fees at
Hickory  Ridge  Apartments  and  an  increase  in  utility   reimbursements  and
application  fees at Governor's  Park  Apartments.  The casualty gain at Hickory
Ridge Apartments related to a fire which destroyed 5 units.

Total  expenses  increased  during the  comparable  periods due to  increases in
operating and property tax expense which were  partially  offset by decreases in
interest  and general and  administrative  expenses.  The  increase in operating
expense was due  primarily  to an increase in salaries  and related  expenses at
both properties and to a lesser extent,  utility and courtesy patrol expenses at
Hickory  Ridge  Apartments.  The  increase  in  property  tax expense was due to
Hickory  Ridge  Apartments  being  annexed  into the city  limits by the city of
Memphis during the last quarter of 1999 and thus having to pay city taxes during
2000.  Interest expense decreased as a result of monthly mortgage payments being
made on the first mortgages encumbering the properties.

General and administrative expense decreased primarily as a result of a decrease
in legal cost for the year ended December 31, 2000 as compared to the year ended
December 31,  1999,  due to the  Partnership's  portion of  settlement  costs as
disclosed  previously.  This  decrease  was  partially  offset by an increase in
management reimbursements due to an increase in the cost of services provided by
the  Corporate  General  Partner to the  Partnership.  Included  in general  and
administrative  expense  at both  December  31,  2000 and  1999  are  management
reimbursements  to the Corporate  General  Partner allowed under the Partnership
Agreement.  In  addition,   costs  associated  with  the  quarterly  and  annual
communications  with  investors and  regulatory  agencies,  the annual audit and
appraisals required by the Partnership Agreement are also included.

During the year ended  December 31, 2000, a net casualty  gain of  approximately
$81,000 was recorded at Hickory Ridge Apartments. The casualty gain related to a
fire  that  damaged  5  apartment  units in May  2000.  The gain was a result of
insurance proceeds of approximately $125,000, offset by the write-off of the net
book value of the damaged units of approximately $44,000.

As part of the ongoing  business plan of the Registrant,  the Corporate  General
Partner  monitors  the  rental  market  environment  of each  of its  investment
properties  to assess  the  feasibility  of  increasing  rents,  maintaining  or
increasing  occupancy  levels and protecting the  Partnership  from increases in
expense. As part of this plan, the Corporate General Partner attempts to protect
the Partnership from the

<PAGE>


burden of  inflation-related  increases  in  expenses  by  increasing  rents and
maintaining a high overall  occupancy  level.  However,  due to changing  market
conditions,  which  can  result  in the use of  rental  concessions  and  rental
reductions to offset softening market conditions, there is no guarantee that the
Corporate General Partner will be able to sustain such a plan.

Liquidity and Capital Resources

At  December  31,  2000,  the  Partnership  had  cash and  cash  equivalents  of
approximately  $344,000 compared to approximately $474,000 at December 31, 1999,
a decrease of  approximately  $130,000.  The  decrease  is due to  approximately
$439,000 of cash used in financing activities and approximately $736,000 of cash
used in investing activities offset by approximately $1,045,000 of cash provided
by  operating  activities.  Cash  used  in  financing  activities  consisted  of
distributions  to  partners  and  principal   payments  made  on  the  mortgages
encumbering  the  Partnership's  properties.  Cash used by investing  activities
consisted  primarily of property  improvements  and replacements and to a lesser
extent  net  deposits  to  restricted  escrows,  partially  offset by  insurance
proceeds  received as a result of a casualty at Hickory  Ridge.  The  Registrant
invests its working capital reserves in money market 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 various  properties  to  adequately  maintain  the
physical  assets and other  operating needs of the Registrant and to comply with
Federal, state, and local legal and regulatory requirements.  The Partnership is
currently  evaluating  the capital  improvement  needs of the properties for the
upcoming  year.  The  minimum to be  budgeted is expected to be $275 per unit or
$155,650.  Additional  capital  improvements  will be  incurred  only if cash is
available from  operations  and  Partnership  reserves.  To the extent that such
budgeted capital improvements are completed, the Registrant's distributable cash
flow, if any, may be adversely affected at least in the short term.

The  Registrant's  current assets are thought to be sufficient for any near-term
needs  (exclusive  of capital  improvements)  of the  Partnership.  The mortgage
indebtedness of approximately  $10,498,000,  net of discount,  is amortized over
varying periods with balloon payments due at maturity, March 1, 2001 and October
15, 2003. In January 2001, the Partnership paid approximately  $30,000 to extend
the  balloon  payment on the  mortgage  encumbering  Hickory  Ridge  Apartments,
originally due March 1, 2001, to August 1, 2001. The Corporate  General  Partner
will attempt to refinance such remaining indebtedness and/or sell the properties
prior to such maturity dates. If the properties cannot be refinanced or sold for
a sufficient  amount,  the  Registrant may risk losing such  properties  through
foreclosure. During the year ended December 31, 2000, the Partnership recognized
approximately $2,553,000 in total revenues and approximately $2,349,000 in total
expenses at Hickory Ridge Apartments.

During the year ended  December 31, 2000,  the  Partnership  declared and paid a
distribution from operations of approximately $200,000  (approximately  $198,000
paid to limited  partners or $11.42 per limited  partnership  unit).  During the
year ended December 31, 1999, the  Partnership  declared and paid  distributions
from operations of approximately  $1,267,000  (approximately  $1,251,000 paid to
limited partners or $72.13 per limited partnership unit). Subsequent to December
31, 2000, the  Partnership  declared and paid a distribution  from operations of
approximately  $86,000  (approximately  $85,000 per limited partner or $4.90 per
limited  partnership unit).  Future cash distributions will depend on the levels
of net cash generated from operations,  the  availability of cash reserves,  the
timing  of  debt  maturities  and   refinancings   and/or  property  sales.  The
Partnership's distribution policy is reviewed on a quarterly basis. There can be
no  assurance  that  the  Partnership   will  generate   sufficient  funds  from
operations,  after planned capital expenditures,  to permit distributions to its
partners during the remainder of 2001 or subsequent  periods.  Distributions may
also be  restricted  by the  requirement  to deposit  net  operating  income (as
defined in the mortgage note) into reserve  account until the reserve account is
funded by an amount equal to $200 per apartment  unit at Governor's  Park. As of
December 31, 2000, the reserve account is fully funded.


<PAGE>



In addition to its  indirect  ownership of the general  partner  interest in the
Partnership,  AIMCO and its affiliates  currently own 10,426 limited partnership
units in the Partnership  representing 60.12% of the outstanding units. A number
of these  units were  acquired  pursuant  to tender  offers made by AIMCO or its
affiliates.  It is possible that AIMCO or its  affiliates  will make one or more
additional offers to acquire  additional  limited  partnership  interests in the
Partnership  for cash or in exchange for units in the operating  partnership  of
AIMCO. Under the Partnership  Agreement,  unitholders  holding a majority of the
Units are  entitled to take action with  respect to a variety of matters,  which
would  include  without   limitation,   voting  on  certain  amendments  to  the
Partnership  Agreement and voting to remove the Corporate General Partner.  As a
result  of its  ownership  of  60.12% of the  outstanding  units,  AIMCO is in a
position to influence all voting decisions with respect to the Registrant.  When
voting on matters, AIMCO would in all likelihood vote the Units it acquired in a
manner favorable to the interest of the Corporate General Partner because of its
affiliation with the Corporate General Partner.


<PAGE>


Item 7.     Financial Statements


SHELTER PROPERTIES VII LIMITED PARTNERSHIP

LIST OF FINANCIAL STATEMENTS


      Independent Auditors' Report

      Consolidated Balance Sheet - December 31, 2000

      Consolidated  Statements of  Operations - Years ended  December 31, 2000
      and 1999

      Consolidated  Statements of Changes in Partners' (Deficit) Capital - Years
      ended December 31, 2000 and 1999

      Consolidated  Statements  of Cash Flows - Years ended  December 31, 2000
      and 1999

      Notes to Consolidated Financial Statements


<PAGE>



              Report of Ernst & Young LLP, Independent Auditors



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,  2000,  and the related
consolidated  statements of operations,  changes in partners' (deficit) capital,
and cash flows for each of the two years in the period ended  December 31, 2000.
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 auditing standards generally accepted
in the 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. An audit includes examining, on a test basis, evidence
supporting  the amounts and  disclosures in the financial  statements.  An audit
also includes assessing the accounting principles used and significant estimates
made  by the  Partnership's  management,  as  well  as  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, 2000, and the  consolidated  results of
its  operations and its cash flows for each of the two years in the period ended
December 31, 2000, in conformity with accounting  principles  generally accepted
in the United States.

                                                           /s/ ERNST & YOUNG LLP



Greenville, South Carolina
March 2, 2001


<PAGE>






                  SHELTER PROPERTIES VII LIMITED PARTNERSHIP

                           CONSOLIDATED BALANCE SHEET
                       (in thousands, except unit data)

                                December 31, 2000

<TABLE>
<CAPTION>


Assets
<S>                                                          <C>            <C>
   Cash and cash equivalents                                                $   344
   Receivables and deposits                                                     202
   Restricted escrows                                                            78
   Other assets                                                                 113
   Investment properties (Notes D and E):
      Land                                                    $ 1,774
      Buildings and personal property                          21,850
                                                               23,624
      Less accumulated depreciation                           (12,377)       11,247
                                                                            $11,984

Liabilities and Partners' (Deficit) Capital

Liabilities
      Accounts payable                                                      $   136
      Tenant security deposit liabilities                                        92
      Accrued property taxes                                                    226
      Other liabilities                                                         140
      Mortgage notes payable (Note D)                                        10,498

Partners' (Deficit) Capital
   General partners                                           $ (141)
   Limited partners (17,343 units issued and
      outstanding)                                              1,033           892
                                                                            $11,984

         See Accompanying Notes to Consolidated Financial Statements
</TABLE>

<PAGE>


                  SHELTER PROPERTIES VII LIMITED PARTNERSHIP

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


<TABLE>
<CAPTION>

                                                          Years Ended December 31,
                                                             2000          1999
Revenues:
<S>                                                         <C>           <C>
   Rental income                                            $ 3,795       $ 3,832
   Other income                                                 243           193
   Casualty gain (Note H)                                        81            --
      Total revenues                                          4,119         4,025

Expenses:
   Operating                                                  1,548         1,268
   General and administrative                                   219           230
   Depreciation                                                 840           823
   Interest                                                     844           889
   Property taxes                                               353           270
      Total expenses                                          3,804         3,480

Net income                                                   $ 315         $ 545

Net income allocated to general partners (1%)                 $ 3           $ 5

Net income allocated to limited partners (99%)                  312           540
                                                             $ 315         $ 545

Net income per limited partnership unit                     $ 17.99       $ 31.14

Distributions per limited partnership unit                  $ 11.42       $ 72.13

         See Accompanying Notes to Consolidated Financial Statements
</TABLE>

<PAGE>


                  SHELTER PROPERTIES VII LIMITED PARTNERSHIP

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


<TABLE>
<CAPTION>

                                         Limited
                                       Partnership    General     Limited
                                          Units       Partners   Partners     Total

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

Partners' (deficit) capital at
  December 31, 1998                       17,343       $ (131)    $ 1,630    $ 1,499

Distributions paid to partners                --          (16)     (1,251)    (1,267)

Net income for the year ended
  December 31, 1999                           --            5         540        545

Partners' (deficit) capital at
  December 31, 1999                       17,343        (142)         919        777

Distributions paid to partners                --          (2)        (198)      (200)

Net income for the year ended
  December 31, 2000                           --            3         312        315

Partners' (deficit) capital at
  December 31, 2000                       17,343      $  (141)    $ 1,033     $  892


         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,
                                                                 2000         1999
Cash flows from operating activities:
<S>                                                              <C>          <C>
  Net income                                                     $ 315        $  545
  Adjustments to reconcile net income to net
   cash provided by operating activities:
   Depreciation                                                     840           823
   Amortization of discounts and loan costs                          44            45
   Casualty gain                                                    (81)           --
   Bad debt                                                         126            74
   Change in accounts:
      Receivables and deposits                                     (148)            7
      Other assets                                                  (24)          (25)
      Accounts payable                                                3            46
      Tenant security deposits liabilities                           13             2
      Accrued taxes                                                   6           (21)
      Other liabilities                                             (49)           74

          Net cash provided by operating activities               1,045         1,570

Cash flows from investing activities:
  Property improvements and replacements                           (822)         (873)
  Insurance proceeds received for a casualty                        125            --
  Net (deposits to) withdrawals from restricted escrows             (39)           52

          Net cash used in investing activities                    (736)         (821)

Cash flows from financing activities:
  Payments on mortgage notes payable                               (239)         (209)
  Distributions paid to partners                                   (200)       (1,267)

          Net cash used in financing activities                    (439)       (1,476)

Net decrease in cash and cash equivalents                          (130)         (727)

Cash and cash equivalents at beginning of period                    474         1,201

Cash and cash equivalents at end of period                       $ 344        $   474

Supplemental disclosure of cash flow information:
  Cash paid for interest                                         $ 853        $   832
Supplemental disclosure of non-cash activity:
  Property improvements and replacements included in
    accounts payable                                             $ 60         $   --

Property  improvements  and  replacements  and  accumulated   depreciation  were
adjusted  during the year  ended  December  31,  2000 by  $92,000  and  $48,000,
respectively, as a result of a May 2000 casualty at Hickory Ridge Apartments.
</TABLE>


         See Accompanying Notes to Consolidated Financial Statements

<PAGE>




                  SHELTER PROPERTIES VII LIMITED PARTNERSHIP

                  Notes to Consolidated Financial Statements

                                December 31, 2000


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") (see "Note B -
Transfer of Control").  The only other general partner of the Partnership was N.
Barton Tuck, Jr. Mr. Tuck was not an affiliate of the Corporate  General Partner
and was effectively  prohibited by the Partnership's  partnership agreement (the
"Partnership   Agreement")   from   participating   in  the  management  of  the
Partnership.  In June 1999, Mr. Tuck's general partner interest was purchased by
AIMCO Properties, L.P., an affiliate of the Corporate General Partner and AIMCO.
The  directors  and  officers of the  Corporate  General  Partner  also serve as
executive  officers  of  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
two apartment properties located in Tennessee and Colorado.

Principles of Consolidation:

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

Use of Estimates:

The preparation of financial  statements in conformity  with generally  accepted
accounting principles 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,
                                                             2000          1999
                                                              (in thousands)

<S>                                                         <C>           <C>
Net cash provided by operating activities                   $1,045        $1,570
   Property improvements and replacements                     (822)         (873)
   Payments on mortgage notes payable                         (239)         (209)
   Changes in reserves for net operating liabilities            73          (157)
   Changes in restricted escrows, net                          (39)           52
   Release of (additional) reserves                             68          (383)

      Net cash from operations                               $ 86          $ --
</TABLE>

The Corporate General Partner released previously reserved cash of approximately
$68,000 during the year ended December 31, 2000.

The Corporate  General Partner reserved  approximately  $383,000 at December 31,
1999 to fund capital improvements and repairs at its two properties.

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 following table sets forth the distributions made by the Partnership for the
years ended December 31, 2000 and 1999 and subsequent to December 31, 2000.

                                                Distributions
                                                            Per Limited
                                        Aggregate        Partnership Unit
       01/01/99 - 12/31/99             $1,267,000 (1)         $72.13
       01/01/00 - 12/31/00                200,000 (2)          11.42
      Subsequent to 12/31/00               86,000 (2)           4.90

   (1)      Distribution  was made from cash from operations.  In addition,  the
            Partnership  paid  approximately  $6,000 to  Colorado  for state tax
            withholdings on behalf of the limited partners.

   (2)            Distributions were made from cash from operations.

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%.

Distributions  may be  restricted  by the  requirement  to deposit net operating
income (as  defined in the  mortgage  note) into the Reserve  Account  until the
Reserve  Account  is funded in an amount  equal to $200 per  apartment  unit for
Governor's  Park  Apartments.  As of December 31, 2000,  the Reserve  Account is
fully funded.

Undistributed Net Proceeds from Refinancing:

At December  31,  2000,  $567,000 of net  proceeds  from  refinancings  remained
undistributed.

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 income as
shown in the statement of operations and changes in partners'  (deficit) capital
for  2000  was  allocated  99% to the  limited  partners  and 1% to the  general
partners.  Net income per limited  partnership unit was computed by dividing the
net 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
general  partners  designated  as  other  reserves  an  amount  equal to the net
liabilities related to the operations of apartment properties during the current
fiscal year that are  expected to require the use of cash during the next fiscal
year. The increase in other reserves during 2000 was approximately  $73,000,  as
compared to a decrease of approximately $157,000 during 1999. These amounts were
determined by considering  changes in the balance of,  receivables and deposits,
other assets,  accounts payable,  tenant security deposits liabilities,  accrued
property  taxes 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, cash in banks and money market
accounts.  At certain  times,  the amount of cash deposited at a bank may exceed
the limit on insured deposits.  Cash balances include approximately  $288,000 at
December 31, 2000 that are  maintained  by an affiliated  management  company on
behalf of affiliated entities in cash concentration accounts.

Restricted Escrows:

At the time of the  refinancing of the Governor's  Park mortgage note payable in
1993, a General Reserve Account was  established  with the refinancing  proceeds
from Governor's Park.  These funds were  established to cover necessary  repairs
and replacements of existing improvements,  debt service, out of pocket expenses
incurred for ordinary and necessary  administrative  tasks,  and payment of real
property taxes and insurance  premiums.  The  Partnership is required to deposit
net operating  income (as defined in the mortgage note) to the  Governor's  Park
reserve  account until it equals a minimum of $200 per apartment unit or $37,600
in  total.  The  balance  in the  reserve  account  at  December  31,  2000,  is
approximately $78,000, which includes interest earned on these funds.

Investment Properties:

Investment properties consist of two apartment complexes and are stated at cost.
Acquisition  fees are  capitalized as a cost of real estate.  In accordance with
Financial  Accounting  Standards  Board  Statement No. 121,  "Accounting for the
Impairment of Long-Lived  Assets and for  Long-Lived  Assets to Be Disposed Of,"
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.  Costs of apartment
properties  that have  been  permanently  impaired  have  been  written  down to
appraised value. The Corporate  General Partner relies on the annual  appraisals
performed by the outside appraisers for the estimated value of the Partnership's
properties. There are three recognized approaches or techniques available to the
appraiser.  When  applicable,  these  approaches  are used to  process  the data
considered  significant to each to arrive at separate value indications.  In all
instances the experience of the appraiser,  coupled with his objective judgment,
plays a major role in arriving at the  conclusions  of the  indicated  value for
which the final estimate of value is made. The three  approaches  commonly known
are the cost approach,  the sales  comparison  approach and the income approach.
The cost approach is often not considered to be reliable due to the lack of land
sales and the significant  amount of depreciation and,  therefore,  is often not
presented.  Upon receipt of the appraisals,  any property which is stated on the
books of the Partnership  above the estimated  value given in the appraisal,  is
written  down to the  estimated  value  given by the  appraiser.  The  appraiser
assumes a stabilized occupancy at the time of the appraisal and, therefore,  any
impairment  of value is  considered  to be  permanent by the  Corporate  General
Partner. No adjustments for impairment of value were recorded in the years ended
December 31, 2000 and 1999.

Depreciation:

Depreciation is calculated by the straight-line  method over the estimated lives
of the apartment  properties and related personal  property.  For Federal income
tax purposes, the accelerated cost recovery method is used (1) for real property
over 15 years for  additions  prior to March 16,  1984,  18 years for  additions
after March 15, 1984 and before May 9, 1985,  and 19 years for  additions  after
May 8, 1985, and before  January 1, 1987,  and (2) for personal  property over 5
years for additions  prior to 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.

Loan Costs:

Loan  costs  of  approximately  $304,000,  net of  accumulated  amortization  of
approximately  $241,000, are included in other assets and are being amortized on
a straight-line basis over the life of the loans.

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:

Statement  of Financial  Accounting  Standards,  ("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 fair value of the  Partnership's  long term
debt,  after  discounting the scheduled loan payments to maturity,  approximates
its carrying balance.

Leases:

The Partnership generally leases apartment units for twelve-month terms or less.
The  Partnership  recognizes  income as earned on its leases.  In addition,  the
Corporate  General  Partner's  policy  is to  offer  rental  concessions  during
particularly  slow months or in response to heavy competition from other similar
complexes in the area. Concessions are charged to rental income as incurred.

Advertising Costs:

The Partnership expenses the costs of advertising as incurred. Advertising costs
of approximately  $68,000 for each of the years ended December 31, 2000 and 1999
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 establishes standards for related
disclosures about products and services,  geographic areas, and major customers.
As defined in SFAS 131, the  Partnership  has only one reportable  segment.  The
Corporate  General  Partner  believes  that segment based  disclosures  will not
result  in a  more  meaningful  presentation  than  the  consolidated  financial
statements as currently presented.

Reclassification:

Certain  reclassifications  have been made to the 1999 information to conform to
the 2000 presentation.  These  reclassifications  had no impact on net income or
partners' capital as previously reported.

Note B - Transfer of Control

Pursuant  to a series  of  transactions  which  closed  on  October  1, 1998 and
February 26, 1999,  Insignia Financial Group, Inc. and Insignia Properties Trust
merged into AIMCO, a publicly traded real estate  investment  trust,  with AIMCO
being the surviving  corporation.  As a result,  AIMCO  acquired 100%  ownership
interest in the Corporate  General Partner.  The Corporate  General Partner does
not believe that this  transaction has had or will have a material effect on the
affairs and operations of the Partnership.

Note C - Related Party Transactions

The  Partnership  has no employees  and is dependent  on the  Corporate  General
Partner  and  its  affiliates  for  the  management  and  administration  of all
partnership  activities.  The Partnership Agreement provides for (i) payments to
affiliates for services and (ii)  reimbursement of certain expenses  incurred by
affiliates on behalf of the  Partnership.  The  following  payments were paid or
accrued to the Corporate  General Partner and affiliates  during the years ended
December 31, 2000 and 1999:

                                                         2000       1999
                                                         (in thousands)

Property management fees (included in operating
  expenses)                                             $ 209      $ 200
Reimbursements for services of affiliates
  (included in general and administrative expenses
  and investment properties)                              137         75

During the years ended  December 31, 2000 and 1999,  affiliates of the Corporate
General  Partner were entitled to receive 5% of gross  receipts from both of the
Partnership's  properties  as  compensation  for providing  property  management
services.  The Partnership  paid to such affiliates  approximately  $209,000 and
$200,000 for the years ended December 31, 2000 and 1999, respectively.

An  affiliate  of  the  Corporate  General  Partner  received  reimbursement  of
accountable  administrative  expenses  amounting to  approximately  $137,000 and
$75,000 for the years ended December 31, 2000 and 1999, respectively.

In addition to its  indirect  ownership of the general  partner  interest in the
Partnership,  AIMCO and its affiliates  currently own 10,426 limited partnership
units in the Partnership  representing 60.12% of the outstanding units. A number
of these  units were  acquired  pursuant  to tender  offers made by AIMCO or its
affiliates.  It is possible that AIMCO or its  affiliates  will make one or more
additional offers to acquire  additional  limited  partnership  interests in the
Partnership  for cash or in exchange for units in the operating  partnership  of
AIMCO. Under the Partnership  Agreement,  unitholders  holding a majority of the
Units are  entitled to take action with  respect to a variety of matters,  which
would  include  without   limitation,   voting  on  certain  amendments  to  the
Partnership  Agreement and voting to remove the Corporate General Partner.  As a
result  of its  ownership  of  60.12% of the  outstanding  units,  AIMCO is in a
position to influence all voting decisions with respect to the Registrant.  When
voting on matters, AIMCO would in all likelihood vote the Units it acquired in a
manner favorable to the interest of the Corporate General Partner because of its
affiliation with the Corporate General Partner.

Note D - Mortgage Notes Payable

The principal terms of mortgage notes payable are as follows:

<TABLE>
<CAPTION>

                             Principal    Monthly                             Principal
                            Balance At    Payment     Stated                   Balance
                             December    Including   Interest    Maturity       Due At
                                31,
                               2000       Interest     Rate        Date        Maturity
Properties                       (in thousands)                             (in thousands)

<S>                           <C>           <C>        <C>     <C>             <C>
Hickory Ridge Apartments      $ 6,070       $ 51       7.50%   03/01/01 (1)    $ 6,057
Governor's Park
 Apartments
  1st mortgage                  4,321          35      7.83%     10/15/03        4,083
  2nd mortgage                    147           1      7.83%     10/15/03          147
                               10,538
Less unamortized
  discounts                       (40)
                              $10,498       $ 87                               $10,287
</TABLE>

(1)   During January 2001, the Partnership paid approximately  $30,000 to extend
      the maturity of the loan to August 1, 2001. If the property cannot be sold
      or refinanced prior to this extension period then the Partnership may risk
      losing this property through foreclosure.

The  mortgage  notes  payable are  nonrecourse  and are secured by pledge of the
Partnership's  rental  properties  and by pledge of revenues from the respective
rental  properties.  Prepayment  penalties  are  required  if  repaid  prior  to
maturity.   Further,  the  properties  may  not  be  sold  subject  to  existing
indebtedness.

Scheduled  principal  payments  of the  mortgage  notes  payable  subsequent  to
December 31, 2000 are as follows (in thousands):

                               2001             $ 6,150
                               2002                  88
                               2003               4,300
                                                $10,538


<PAGE>



Note E - Real Estate and Accumulated Depreciation
<TABLE>
<CAPTION>

                                                       Initial Cost
                                                      To Partnership
                                                      (in thousands)

                                                              Buildings          Cost
                                                             and Related     Capitalized
                                                               Personal     Subsequent to
Description                        Encumbrances      Land      Property      Acquisition
                                  (in thousands)                            (in thousands)

<S>                                   <C>          <C>         <C>             <C>
Hickory Ridge Apartments              $ 6,070      $ 1,060     $11,839         $ 2,799
Governor's Park Apartments              4,468          714       6,496             716

             Totals                   $10,538      $ 1,774     $18,335         $ 3,515
</TABLE>


                                 Gross Amount At Which Carried
                                     At December 31, 2000
                                        (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>
Hickory Ridge         $ 1,060  $14,638   $15,698  $ 8,540       1971-1973   08/27/85    5-29
Governor's Park           714    7,212     7,926    3,837          1983     09/30/85    5-39

       Totals         $1,774   $21,850   $23,624  $12,377
</TABLE>

Reconciliation of "Real Estate and Accumulated Depreciation":

                                                     December 31,
                                                   2000         1999
                                                    (in thousands)

Real Estate

Balance at beginning of year                      $22,834      $21,961
    Property improvements                             882          873
    Disposal of assets                                (92)          --
Balance at end of year                            $23,624      $22,834

Accumulated Depreciation

Balance at beginning of year                      $11,585      $10,762
    Additions charged to expense                      840          823
    Disposal of assets                                (48)          --
Balance at end of year                            $12,377      $11,585

The  aggregate  cost of investment  property for Federal  income tax purposes at
December  31,  2000  and  1999 is  approximately  $26,361,000  and  $25,604,000,
respectively. The accumulated depreciation taken for Federal income tax purposes
at December 31, 2000 and 1999, is  approximately  $17,402,000  and  $16,263,000,
respectively.

Note F - 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 income and Federal  taxable
income (in thousands, except per unit data):

                                                     2000         1999

Net income as reported                              $ 315        $  545
Add (deduct):
   Depreciation differences                           (301)        (205)
   Unearned income                                      21          (43)
   Other                                              (208)         148

Federal taxable (loss) income                       $ (173)      $  445

Federal taxable (loss) income per limited
   partnership unit                                 $(9.86)      $25.40

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

                  Net assets as reported                    $ 892
                  Buildings                                  2,737
                  Accumulated depreciation                  (5,025)
                  Syndication fees                           2,292
                  Other                                         95

                  Net assets - tax basis                    $  991

Note G - Distributions

During the year ended  December 31, 2000,  the  Partnership  declared and paid a
distribution from operations of approximately $200,000  (approximately  $198,000
paid to limited  partners or $11.42 per limited  partnership  unit).  During the
year ended December 31, 1999, the  Partnership  declared and paid  distributions
from operations of approximately  $1,267,000  (approximately  $1,251,000 paid to
limited partners or $72.13 per limited partnership unit). Subsequent to December
31, 2000, the  Partnership  declared and paid a distribution  from operations of
approximately  $86,000  (approximately  $85,000 per limited partner or $4.90 per
limited partnership unit).

Note H - Casualty Gain

During the year ended  December 31, 2000, a net casualty  gain of  approximately
$81,000 was recorded at Hickory Ridge Apartments. The casualty gain related to a
fire  that  damaged  5  apartment  units in May  2000.  The gain was a result of
insurance proceeds of approximately $125,000, offset by the write-off of the net
book value of the damaged units of approximately $44,000.

Note I - 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. in the Superior Court of the State of California
for the County of San Mateo. The plaintiffs  named as defendants,  among others,
the Partnership,  its Corporate  General Partner and several of their affiliated
partnerships  and corporate  entities.  The action  purports to assert claims on
behalf of a class of limited  partners and derivatively on behalf of a number of
limited  partnerships  (including  the  Partnership)  which are named as nominal
defendants,  challenging,  among other things,  the  acquisition of interests in
certain general partner entities by Insignia Financial Group, Inc.  ("Insignia")
and entities which were, at one time, affiliates of Insignia; past tender offers
by the Insignia affiliates to acquire limited  partnership units;  management of
the  partnerships  by the  Insignia  affiliates;  and the Insignia  Merger.  The
plaintiffs  seek  monetary  damages and  equitable  relief,  including  judicial
dissolution of the Partnership.  On June 25, 1998, the Corporate General Partner
filed a motion  seeking  dismissal of the action.  In lieu of  responding to the
motion, the plaintiffs filed an amended complaint. The Corporate General Partner
filed demurrers to the amended complaint which were heard February 1999.

Pending the ruling on such  demurrers,  settlement  negotiations  commenced.  On
November 2, 1999,  the parties  executed and filed a Stipulation  of Settlement,
settling claims, subject to court approval, on behalf of the Partnership and all
limited partners who owned units as of November 3, 1999. Preliminary approval of
the  settlement  was obtained on November 3, 1999 from the Court,  at which time
the Court set a final  approval  hearing for  December  10,  1999.  Prior to the
December  10,  1999  hearing,  the  Court  received  various  objections  to the
settlement, including a challenge to the Court's preliminary approval based upon
the alleged lack of authority of prior lead counsel to enter the settlement.  On
December 14, 1999, the Corporate  General Partner and its affiliates  terminated
the  proposed  settlement.  In  February  2000,  counsel  for some of the  named
plaintiffs filed a motion to disqualify plaintiff's lead and liaison counsel who
negotiated  the  settlement.  On June  27,  2000,  the  Court  entered  an order
disqualifying  them  from the case and an  appeal  was  taken  from the order on
October 5, 2000. On December 4, 2000, the Court  appointed the law firm of Lieff
Cabraser  Heimann & Bernstein  LLP as new lead  counsel for  plaintiffs  and the
putative class.  Plaintiffs filed a third amended complaint on January 19, 2001.
On March 2, 2001,  the  Corporate  General  Partner and its  affiliates  filed a
demurrer to the third amended complaint.  The Corporate General Partner does not
anticipate  that  costs  associated  with  this  case  will be  material  to the
Partnership's overall operations.

The  Partnership is unaware of any other pending or outstanding  litigation that
is not of a routine nature arising in the ordinary course of business.


<PAGE>




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

            None.


<PAGE>



                                    PART III


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

The Registrant has no officers or directors.  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  executive  officers  and  director  of the
Corporate General Partner are set forth below. There are no family relationships
between or among any officers or directors.

Name                        Age    Position

Patrick J. Foye              43    Executive Vice President and Director

Martha L. Long               41    Senior Vice President and Controller

Patrick  J.  Foye  has been  Executive  Vice  President  and  Director  of the
Corporate  General  Partner  since  October  1, 1998.  Mr.  Foye has served as
Executive  Vice  President  of AIMCO since May 1998.  Prior to joining  AIMCO,
Mr.  Foye was a partner in the law firm of  Skadden,  Arps,  Slate,  Meagher &
Flom LLP from 1989 to 1998 and was  Managing  Partner of the firm's  Brussels,
Budapest and Moscow  offices from 1992 through  1994.  Mr. Foye is also Deputy
Chairman of the Long Island Power  Authority and serves as a member of the New
York State  Privatization  Council.  He received a B.A.  from Fordham  College
and a J.D. from Fordham University Law School.

Martha L. Long has been  Senior Vice  President  and  Controller  of the General
Partner since October 1998 as a result of the acquisition of Insignia  Financial
Group, Inc. As of February 2001, Ms. Long was also appointed head of the service
business for AIMCO.  From June 1994 until January 1997,  she was the  Controller
for Insignia, and was promoted to Senior Vice President - Finance and Controller
in January 1997,  retaining  that title until  October  1998.  From 1988 to June
1994,  Ms. Long was Senior Vice  President and  Controller for The First Savings
Bank, FSB in Greenville, South Carolina.

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 executive officers and director of the Corporate General Partner fulfill the
obligations  of the Audit  Committee  and  oversee the  Partnership's  financial
reporting process on behalf of the Corporate General Partner. Management has the
primary  responsibility  for the financial  statements and the reporting process
including  the  systems  of  internal  controls.  In  fulfilling  its  oversight
responsibilities,  the executive  officers and director of the Corporate General
Partner reviewed the audited  financial  statements with management  including a
discussion  of the  quality,  not  just  the  acceptability,  of the  accounting
principles,  the  reasonableness  of significant  judgments,  and the clarity of
disclosures in the financial statements.

The executive  officers and director of the Corporate  General Partner  reviewed
with the independent auditors,  who are responsible for expressing an opinion on
the conformity of those audited  financial  statements  with generally  accepted
accounting  principles,  their  judgments  as  to  the  quality,  not  just  the
acceptability, of the Partnership's accounting principles and such other matters
as are required to be discussed with the Audit Committee or its equivalent under
generally  accepted  auditing  standards.   In  addition,  the  Partnership  has
discussed  with  the  independent  auditors  the  auditors'   independence  from
management and the Partnership  including the matters in the written disclosures
required by the Independence Standards Board and considered the compatibility of
non-audit services with the auditors' independence.

The executive  officers and director of the Corporate  General Partner discussed
with the  Partnership's  independent  auditors  the overall  scope and plans for
their audit. In reliance on the reviews and discussions  referred to above,  the
executive  officers and director of the Corporate  General  Partner has approved
the  inclusion of the audited  financial  statements  in the Form 10-KSB for the
year  ended  December  31,  2000 for filing  with the  Securities  and  Exchange
Commission.

The Corporate  General Partner has reappointed  Ernst & Young LLP as independent
auditors to audit the financial  statements of the  Partnership  for the current
fiscal  year.  Fees for the last  fiscal  year were  annual  audit  services  of
approximately  $37,000  and  non-audit  services  (principally  tax-related)  of
approximately $19,000.

Item 10. Executive Compensation

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

Item 11. Security Ownership of Certain Beneficial Owners and Management

Except as noted below, no person or entity was known by the Registrant to be the
beneficial  owner  of  more  than 5% of the  Limited  Partnership  Units  of the
Registrant as of December 31, 2000.

                  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.               6,549               37.76%
             (an affiliate of AIMCO)
           Insignia Properties LP                 247                1.43%
              (an affiliate of AIMCO)

Insignia Properties LP, 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 2000 South Colorado Blvd., Denver, Colorado 80222.

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 6,549 Units.

Item 12. Certain Relationships and Related Transactions

The  Partnership  has no employees  and is dependent  on the  Corporate  General
Partner  and  its  affiliates  for  the  management  and  administration  of all
partnership  activities.  The Partnership Agreement provides for (i) payments to
affiliates for services and (ii)  reimbursement of certain expenses  incurred by
affiliates on behalf of the  Partnership.  The  following  payments were paid or
accrued to the Corporate  General Partner and affiliates  during the years ended
December 31, 2000 and 1999:

                                                         2000       1999
                                                         (in thousands)

Property management fees                                $ 209      $ 200
Reimbursements for services of affiliates                 137         75


<PAGE>





During the years ended  December 31, 2000 and 1999,  affiliates of the Corporate
General  Partner were entitled to receive 5% of gross  receipts from both of the
Partnership's  properties  as  compensation  for providing  property  management
services.  The Partnership  paid to such affiliates  approximately  $209,000 and
$200,000 for the years ended December 31, 2000 and 1999, respectively.

An  affiliate  of  the  Corporate  General  Partner  received  reimbursement  of
accountable  administrative  expenses  amounting to  approximately  $137,000 and
$75,000 for the years ended December 31, 2000 and 1999, respectively.

In addition to its  indirect  ownership of the general  partner  interest in the
Partnership,  AIMCO and its affiliates  currently own 10,426 limited partnership
units in the Partnership  representing 60.12% of the outstanding units. A number
of these  units were  acquired  pursuant  to tender  offers made by AIMCO or its
affiliates.  It is possible that AIMCO or its  affiliates  will make one or more
additional offers to acquire  additional  limited  partnership  interests in the
Partnership  for cash or in exchange for units in the operating  partnership  of
AIMCO. Under the Partnership  Agreement,  unitholders  holding a majority of the
Units are  entitled to take action with  respect to a variety of matters,  which
would  include  without   limitation,   voting  on  certain  amendments  to  the
Partnership  Agreement and voting to remove the Corporate General Partner.  As a
result  of its  ownership  of  60.12% of the  outstanding  units,  AIMCO is in a
position to influence all voting decisions with respect to the Registrant.  When
voting on matters, AIMCO would in all likelihood vote the Units it acquired in a
manner favorable to the interest of the Corporate General Partner because of its
affiliation with the Corporate General Partner.

<PAGE>



Item 13.  Exhibits and Reports on Form 8-K

      (a)   Exhibits:

            None.

      (b)   Reports on Form 8-K filed in the fourth  quarter of calendar  year
            2000:

            None.


<PAGE>


                                   SIGNATURES



In accordance  with Section 13 or 15(d) of the Exchange Act, the  Registrant has
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.


                                    SHELTER PROPERTIES VII LIMITED PARTNERSHIP


                                    By:   Shelter Realty VII Corporation
                                          Corporate General Partner


                                    By:   /s/Patrick J. Foye
                                          Patrick J. Foye
                                          Executive Vice President

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

                                    Date: March 30, 2001


In  accordance  with the Exchange  Act, this report has been signed below by the
following  persons on behalf of the Partnership and in the capacities and on the
dates indicated.

/s/Patrick J. Foye     Executive Vice President       Date: March 30, 2001
Patrick J. Foye         and Director

/s/Martha L. Long       Senior Vice President         Date: March 30, 2001
Martha L. Long          and Controller



<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].

       (c)        Wrap around Deed of Trust Note and Deed of Trust and  Personal
                  Property Security Agreement between Boyle Trust and Investment
                  Company and Shelter  Properties  VII to acquire  Hickory Ridge
                  Apartments.*

       (d)        Promissory  Note  and  Combination  Deed  of  Trust,  Security
                  Agreement and Fixture Financing Statement between State Mutual
                  Life Assurance  Company of America and Shelter  Properties VII
                  to acquire Governor's Park Apartments.*

                  *Filed as Exhibit 4(d) and 4(e), respectively, to Form 10-K of
                  Registrant for year ended  December 31, 1987 and  incorporated
                  herein by reference.

10(i)             Contracts related to acquisition of properties.

       (a)        Purchase  Agreement  dated  October  8, 1984 as  Amended  by
                  Addendum  dated  December 27, 1984  between  Boyle Trust and
                  Investment Company,  Trustee and U.S. Shelter Corporation to
                  acquire  Hickory Ridge  Apartments.  [Filed as Exhibit 10(E)
                  to Amendment No. 1 of Registration  Statement No. 2-94604 of
                  the Registrant filed March 18, 1985 and incorporated  herein
                  by reference].

       (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               Agreement  and Plan of Merger,  dated as of October 1, 1998,
                  by and between AIMCO and IPT  [incorporated  by reference to
                  Exhibit 2.1 of IPT's  Current  Report on Form 8-K,  File No.
                  1-14179, dated October 1, 1998].

       (a)        Tennessee Deed of Trust and Security  Agreement dated December
                  28, 1988 between  Shelter  Properties VII Limited  Partnership
                  and John Hancock  Mutual Life  Insurance  Company  relating to
                  Hickory Ridge Apartments.*


<PAGE>


                                  EXHIBIT INDEX

       (b)        Promissory  Note  dated  December  28,  1988  between  Shelter
                  Properties  VII Limited  Partnership  and John Hancock  Mutual
                  Life Insurance Company, a Massachusetts corporation,  relating
                  to  Hickory  Ridge  Apartments.  First  Amendment  to Note and
                  Certification  and Release by Borrower  between  John  Hancock
                  Mutual  Life  Insurance  Company and  Shelter  Properties  VII
                  Limited Partnership and dated July 5, 1992.*

                  *Filed as Exhibits 10(iii) (a) and (b), respectively,  to Form
                  10-KSB for the year ended  December 31, 1992 and  incorporated
                  herein by reference.

       (c)        First Deed of Trust  Note dated  September  30,  1993  between
                  Governor's  Park   Apartments  VII  Limited   Partnership  and
                  Lexington Mortgage Company, a Virginia  corporation,  relating
                  to Governor's Park.**

       (d)        Second Deed of Trust Note dated  September  30,  1993  between
                  Governor's  Park   Apartments  VII  Limited   Partnership  and
                  Lexington Mortgage Company, a Virginia  corporation,  relating
                  to Governor's Park.**

       (e)        First Deed of Trust and Security  Agreement between Governor's
                  Park Apartments VII Limited Partnership and Lexington Mortgage
                  Company,  a Virginia  corporation,  securing  Governor's  Park
                  Apartments.**

       (f)        Second Deed of Trust and Security Agreement between Governor's
                  Park Apartments VII Limited Partnership and Lexington Mortgage
                  Company,  a Virginia  corporation,  securing  Governor's  Park
                  Apartments.**

       (g)        First   Collateral   Assignment  of  Leases  and  Rents  dated
                  September  30, 1993 between  Governor's  Park  Apartments  VII
                  Limited Partnership and Lexington Mortgage Company, a Virginia
                  corporation, securing Governor's Park Apartments.**

       (h)        Second  Collateral   Assignment  of  Leases  and  Rents  dated
                  September  30, 1993 between  Governor's  Park  Apartments  VII
                  Limited Partnership and Lexington Mortgage Company, a Virginia
                  corporation, securing Governor's Park Apartments.**

                  **Filed as Exhibits 10(iii) (a) through (h) to Form 10-QSB for
                  the quarter ended September 30, 1993 and  incorporated  herein
                  by reference.

       (i)        Note   Modification   Agreement   and  Amended  and   Restated
                  Promissory  Note both dated February 28, 1994 between  Shelter
                  Properties  VII Limited  Partnership  and John Hancock  Mutual
                  Life   Insurance    Company    relating   to   Hickory   Ridge
                  Apartments.***

       (j)        Modifications  to Security  Instruments  dated  February 28,
                  1994 between Shelter Properties VII Limited  Partnership and
                  John  Hancock  Mutual  Life  Insurance  Company  relating to
                  Hickory Ridge Apartments.***

                  ***Filed  as  Exhibits  10(iii) (i) through (j) to Form 10-KSB
                  for the year ended December 31, 1993 and  incorporated  herein
                  by reference.

22                Subsidiaries of the Registrant

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


<PAGE>



                                  EXHIBIT INDEX

       (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
                  September 30, 1993 and incorporated herein by reference.


<PAGE>


                                   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