March 9, 2000

United States

Securities and Exchange Commission
Washington, D.C.  20549


RE:   Shelter Properties VII Limited Partnership
      Form 10-KSB

      File No. 0-14369


To Whom it May Concern:

The  accompanying  Form 10-KSB for the year ended  December 31, 1999 describes a
change in the method of  accounting to  capitalize  exterior  painting and major
landscaping,   which  would  have  been  expensed  under  the  old  policy.  The
Partnership believes that this accounting principle change is preferable because
it  provides a better  matching  of  expenses  with the  related  benefit of the
expenditures and it is consistent with industry practice and the policies of the
Corporate General Partner.

Please do not hesitate to contact the undersigned with any questions or comments
that you might have.

Very truly yours,




Stephen Waters
Real Estate Controller


<PAGE>


     -------------------------------------------------------------------------
                  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, 1999

[ ] 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. Yes X No___

State issuer's revenues for its most recent fiscal year.  $4,025,000

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, 1999. 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

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


<PAGE>





                                     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 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.  The Corporate  General  Partner is a subsidiary of
Apartment Investment and Management Company ("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 (the "SEC"),  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  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  (the "Insignia  Merger").  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.


<PAGE>



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    $15,062    $ 7,981    5-29 years    S/L      $ 6,419

Governor's Park Apartments    7,772      3,604    5-39 years    S/L        2,922
                             ------     ------                            ------

          Totals            $22,834    $11,585                           $ 9,341
                             ======     ======                            ======

</TABLE>

See "Note A" to the consolidated financial statements included in "Item 7" for a
description  of the  Partnership's  depreciation  policy and "Note J - Change in
Accounting Principle".

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                    1999        Rate    Amortized     Date    Maturity (3)
----------                    ----        ----    ---------     ----    ------------
                         (in thousands)                                (in thousands)

<S>                        <C>           <C>         <C>     <C>          <C>

Hickory Ridge Apartments    $ 6,233       7.50%      (1)      03/01/01     $ 6,057

Governor's Park
 Apartments

  1st mortgage                4,397       7.83%      (2)      10/15/03       4,083
  2nd mortgage                  147       7.83%      none     10/15/03         147
                             ------                                         ------
                             10,777                                        $10,287
                                                                            ======
Less unamortized
  mortgage discounts            (49)
                             ------

         Total              $10,728
                             ======

</TABLE>

(1) The  principal  balance is being  amortized  over 300 months  with a balloon
    payment due March 1, 2001.

(2) The  principal  balance is being over 344 months with a balloon  payment due
    October 15, 2003.

(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
1999 and 1998 for each property.

                                     Average Annual                 Average
                                      Rental Rates                 Occupancy
                                      ------------                 ---------
                                       (per unit)
 Properties                       1999            1998          1999        1998
 ----------                       ----            ----          ----        ----

 Hickory Ridge Apartments        $6,774         $6,517          95%          95%

 Governor's Park                  8,727          8,321          95%          96%
   Apartments


<PAGE>



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.

Schedule of Real Estate Taxes and Rates

Real estate taxes and rates in 1999 for each property were:

                                                1999            1999
                                               Billing          Rate
                                               -------          ----
                                           (in thousands)

       Hickory Ridge Apartments                 $241            6.31%

       Governor's Park Apartments                 72            8.80%

Capital Improvements

Hickory Ridge:

The  Partnership  completed  approximately  $751,000 in capital  expenditures at
Hickory  Ridge  Apartments  as of December  31,  1999,  consisting  primarily of
parking lot improvements,  appliances,  electrical improvements,  floor covering
replacements, major landscaping, 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 $300 per unit or  $113,400.  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  $122,000 in capital  expenditures at
Governor's  Park  Apartments  as of December 31, 1999,  consisting  primarily of
appliances,  structural  improvements  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 $300 per unit or $56,400.  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,  the 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  the  acquisition  by Insignia  Financial  Group,  Inc.
("Insignia")  and  entities  which  were,  at one time,  affiliates  of Insignia
("Insignia  Affiliates") of interests in certain general partner entities,  past
tender offers by Insignia  Affiliates to acquire limited  partnership units, the
management of partnerships  by Insignia  Affiliates and the Insignia Merger (see
"Item 7. Financial  Statements.  Note B - Transfer of Control").  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 have 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 final court  approval,  on behalf of the Partnership and all
limited partners who own units as of November 3, 1999.  Preliminary  approval of
the  settlement  was obtained on November 3, 1999 from the Superior Court of the
State of  California,  County of San Mateo,  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
class  plaintiffs'  counsel to enter the  settlement.  On December 14, 1999, the
Corporate General Partner and its affiliates terminated the proposed settlement.
Certain  plaintiffs  have filed a motion to disqualify  some of the  plaintiffs'
counsel in the action.  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, 1999, 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 including 100 units purchased by the Corporate General
Partner aggregating  $17,343,000.  The Partnership  currently has 845 holders of
record owning an aggregate of 17,343 Units.  Affiliates of the Corporate General
Partner own 8,954 units or approximately  51.63% at December 31, 1999. No public
trading market has developed for the Units,  and it is not anticipated that such
a market will develop in the future.

No  distributions  were made for the year ended December 31, 1998. The following
table sets forth the  distributions  made by the Partnership for the years ended
December 31, 1998 and 1999.

                                                Distributions

                                                           Per Limited
                                        Aggregate        Partnership Unit

       01/01/99 - 12/31/99             $1,267,000 (1)         $72.13

(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.

The Partnership's distribution policy is reviewed on a semi-annual basis. Future
cash  distributions  will  depend  on the  levels  of net  cash  generated  from
operations,   the  availability  of  cash  reserves,  and  the  timing  of  debt
maturities,  refinancings,  and/or  property  sales.  There can be no assurance,
however,  that the Partnership  will generate  sufficient funds from operations,
after required capital expenditures,  to permit any additional  distributions to
its  partners  in 2000 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, 1999, the reserve  account
was fully funded with approximately $39,000 on deposit with the mortgage lender.

Several tender offers were made by various parties,  including affiliates of the
general partners, during the years ended December 31, 1999 and 1998. As a result
of these tender offers,  AIMCO and its  affiliates  currently own 8,954 units of
limited  partnership  interest  in the  Partnership  representing  approximately
51.63% of the  outstanding  units.  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.  Consequently,  AIMCO is in a position to
significantly  influence all voting  decisions  with respect to the  Registrant.
Under the Partnership Agreement, unitholders holding a majority of the Units are
entitled  to take action  with  respect to a variety of matters.  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 their
affiliation with the Corporate General Partner.

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  Registrant's  net income for the year ended  December 31, 1999 and 1998 was
approximately $545,000 and $336,000, respectively. The increase in net income is
due to an increase in rental  income and a decrease  in total  expenses.  Rental
income increased primarily due to an increase in the average annual rental rates
at both of the  Registrant's  investment  properties  which  more than  offset a
slight  decrease in occupancy at Governor's  Park. The increase in rental income
was partially offset by a slight decrease in other income. The decrease in other
income is due  primarily to lower  interest  income as a result of a decrease in
interest bearing cash balances as a result of distributions paid during 1999.

Total expenses decreased due to a decrease in operating expense and depreciation
expense.  The  decrease in operating  expense is  primarily  due to decreases in
maintenance,  property and insurance expense.  Maintenance expense decreased due
to interior and exterior building  improvements which were completed during 1998
and a change in  accounting  policy  during 1999 as  discussed  below.  Property
expense  decreased  as a result of a decrease in salaries  and related  employee
benefits. The Registrant changed insurance carriers at the investment properties
during the fourth quarter of 1998 which contributed to the decrease in insurance
expense.   Depreciation   expense   decreased  due  to  assets   becoming  fully
depreciated.

The decrease in total  expenses was  partially  offset by an increase in general
and administrative  expense and property tax expense for the year ended December
31,  1999.  General  and  administrative  expense  increased  as a result  of an
increase in legal costs,  which include the Partnership's  portion of settlement
costs paid in March 1999 as disclosed in the Partnership's annual report on Form
10-KSB  for  the  year  ended  December  31,  1998.   Included  in  general  and
administrative  expense  at both  December  31,  1999 and  1998  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 and the annual audit and
appraisals required by the Partnership Agreement are also included. The increase
in property  tax expense is due to the City of Memphis  annexing  Hickory  Ridge
Apartments into the city limits resulting in the property being  responsible for
city taxes for the first time in 1999. Partially offsetting this increase was an
adjustment in 1999 for an  overaccrual  of 1998 property  taxes at Hickory Ridge
Apartments.  Interest  expense remained  relatively  constant for the comparable
periods.

Effective  January 1, 1999, the Partnership  changed its method of accounting to
capitalize the cost of exterior  painting and major landscaping on a prospective
basis.  The  Partnership  believes  that  this  accounting  principle  change is
preferable  because it provides a better  matching of expenses  with the related
benefit of the expenditures and it is consistent with industry  practice and the
policies of the Corporate General Partner.  The effect of the change in 1999 was
to increase net income by approximately  $88,000 ($4.57 per limited  partnership
unit). The cumulative effect, had this change been applied to prior periods,  is
not material.  The accounting  principle  change will not have an effect on cash
flow, funds available for distribution or fees payable to the Corporate  General
Partner and affiliates.

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 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,  1999,  the  Registrant  had  cash  and  cash  equivalents  of
approximately  $474,000  compared to  approximately  $1,201,000  at December 31,
1998. The decrease in cash and cash  equivalents of  approximately  $727,000 for
the year ended December 31, 1999 is due to  approximately  $821,000 of cash used
in investing  activities and approximately  $1,476,000 of cash used in financing
activities  which was  partially  offset  by  approximately  $1,570,000  of cash
provided by operating  activities.  Cash used in financing  activities consisted
primarily of partner  distributions  and to a lesser extent  principal  payments
made on the mortgages  encumbering  the  Registrant's  properties.  Cash used in
investing activities consisted of property improvements and replacements,  which
was  partially  offset by  withdrawals  from escrow  accounts  maintained by the
mortgage lender.  The Registrant invests its working capital reserves in a money
market account.

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 $300 per unit or
$169,800.  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  $10,728,000,  net of discount,  is amortized over
varying periods with balloon payments due at maturity, March 1, 2001 and October
15, 2003. 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 1999 the Partnership  paid a total of $1,267,000 in  distributions to its
partners. The Partnership distributed  approximately  $1,251,000  (approximately
$72.13 per  limited  partnership  unit) to the limited  partners,  approximately
$16,000 to the general partners.  There were no cash distributions made in 1998.
The Partnership's distribution policy is reviewed on a semi-annual basis. Future
cash  distributions  will  depend  on the  levels  of net  cash  generated  from
operations,   the  availability  of  cash  reserves,  and  the  timing  of  debt
maturities,  refinancings,  and/or  property  sales.  There can be no assurance,
however,  that the Partnership  will generate  sufficient  funds from operations
after required capital expenditures,  to permit any additional  distributions to
its partners in 2000 or subsequent periods. Distributions may also be restricted
by the  requirement to deposit net operating  income (as defined in the mortgage
note) into the Reserve  Account until the Reserve Account is funded by an amount
equal to $200 per apartment  unit at  Governor's  Park. As of December 31, 1999,
the reserve account is fully funded.

Tender Offers

Several tender offers were made by various parties,  including affiliates of the
general partners, during the fiscal years ended December 31, 1999 and 1998. As a
result of these tender  offers,  AIMCO and its  affiliates  currently  own 8,954
units  of  limited   partnership   interest  in  the  Partnership   representing
approximately  51.63% of the outstanding units. 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.  Consequently,  AIMCO is in a position to
significantly  influence all voting  decisions  with respect to the  Registrant.
Under the Partnership Agreement, unitholders holding a majority of the Units are
entitled  to take action  with  respect to a variety of matters.  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 their
affiliation with the Corporate General Partner.

Year 2000 Compliance

General Description

The Year 2000 issue is the result of computer  programs  being written using two
digits rather than four digits to define the applicable year. The Partnership is
dependent upon the Corporate  General  Partner and its affiliates for management
and  administrative  services  ("Managing  Agent").  Any of the Managing Agent's
computer programs or hardware that had date-sensitive software or embedded chips
might have  recognized  a date using "00" as the year 1900  rather than the year
2000.  This could have resulted in a system failure or  miscalculations  causing
disruptions of operations,  including, among other things, a temporary inability
to process  transactions,  send invoices,  or engage in similar normal  business
activities.


<PAGE>



Computer Hardware, Software and Operating Equipment

In 1999,  the Managing  Agent  completed  all phases of its Year 2000 program by
completing  the  replacement  and repair of any  hardware or software  system or
operating  equipment that was not yet Year 2000 compliant.  The Managing Agent's
hardware  and software  systems and its  operating  equipment  are now Year 2000
compliant.  No  material  failure or  erroneous  results  have  occurred  in the
Managing Agent's computer  applications  related to the failure to reference the
Year 2000 to date.

Third Parties

To  date,  the  Managing  Agent  is not  aware of any  significant  supplier  or
subcontractor  (external agent) or financial institution of the Partnership that
has a Year 2000 issue that  would  have a material  impact on the  Partnership's
results of operations,  liquidity or capital  resources.  However,  the Managing
Agent  has no means of  ensuring  or  determining  the Year 2000  compliance  of
external  agents.  At this time, the Managing Agent does not believe that a Year
2000 issue of any  non-compliant  external agent will have a material  impact on
the Partnership's financial position or results of operations.

Costs

The total cost of the Managing Agent's Year 2000 project was approximately  $3.2
million and was funded from operating cash flows.

Risks Associated with the Year 2000

The Managing  Agent  completed all necessary  phases of its Year 2000 program in
1999,  and did not  experience  system or  equipment  malfunctions  related to a
failure to reference the Year 2000. The Managing  Agent or Partnership  have not
been  materially  adversely  effected by  disruptions  in the economy  generally
resulting from the Year 2000 issue.

At this  time,  the  Managing  Agent  does not  believe  that the  Partnership's
businesses,  results of  operations  or financial  condition  will be materially
adversely effected by the Year 2000 issue.

Contingency Plans Associated with the Year 2000

The  Managing  Agent has not had to implement  contingency  plans such as manual
workarounds or selecting new relationships for its banking or elevator operation
activities in order to avoid the Year 2000 issue.


<PAGE>


Item 7.     Financial Statements

SHELTER PROPERTIES VII LIMITED PARTNERSHIP

LIST OF FINANCIAL STATEMENTS

      Independent Auditors' Report

      Consolidated Balance Sheet - December 31, 1999

      Consolidated Statements of Operations - Years ended December 31, 1999
      and 1998

      Consolidated  Statements of Changes in Partners' (Deficit) Capital - Years
      ended December 31, 1999 and 1998

      Consolidated Statements of Cash Flows - Years ended December 31, 1999
      and 1998

      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,  1999,  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, 1999.
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, 1999, and the  consolidated  results of
its  operations and its cash flows for each of the two years in the period ended
December 31, 1999, in conformity with accounting  principles  generally accepted
in the United States.

As discussed in Note I to the consolidated financial statements, the Partnership
changed its method of accounting to capitalize the cost of exterior painting and
major landscaping effective January 1, 1999.

                                                           /s/ ERNST & YOUNG LLP



Greenville, South Carolina
February 24, 2000


<PAGE>




                     SHELTER PROPERTIES VII LIMITED PARTNERSHIP

                           CONSOLIDATED BALANCE SHEET

                          (in thousands, except unit data)

                                December 31, 1999

<TABLE>
<CAPTION>

Assets
<S>                                                          <C>           <C>

   Cash and cash equivalents                                                $   474
   Receivables and deposits                                                     180
   Restricted escrows                                                            39
   Other assets                                                                 124
   Investment properties (Notes D and E):
      Land                                                    $ 1,774
      Buildings and personal property                          21,060
                                                               ------
                                                               22,834
      Less accumulated depreciation                           (11,585)       11,249
                                                              -------        ------
                                                                            $12,066

Liabilities and Partners' (Deficit) Capital

Liabilities

      Accounts payable                                                      $    73
      Tenant security deposit liabilities                                        79
      Accrued property taxes                                                    220
      Other liabilities                                                         189
      Mortgage notes payable (Note D)                                        10,728

Partners' (Deficit) Capital

   General partners                                           $ (142)
   Limited partners (17,343 units issued and
      outstanding)                                                919           777
                                                               ------        ------
                                                                            $12,066

          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,
                                                             1999          1998
                                                             ----          ----
<S>                                                        <C>           <C>
Revenues:
   Rental income                                            $ 3,832       $ 3,745
   Other income                                                 193           199
                                                             ------        ------
      Total revenues                                          4,025         3,944
                                                             ------        ------

Expenses:
   Operating                                                  1,268         1,464
   General and administrative                                   230           163
   Depreciation                                                 823           856
   Interest                                                     889           884
   Property taxes                                               270           241
                                                             ------        ------
      Total expenses                                          3,480         3,608
                                                             ------        ------

Net income                                                  $   545       $   336
                                                             ======        ======

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

Net income allocated to limited partners (99%)                  540           333
                                                             ------        ------
                                                            $   545       $   336
                                                             ======        ======

Net income per limited partnership unit                     $ 31.14       $ 19.20
                                                             ======        ======

Distributions per limited partnership unit                  $ 72.13       $    --
                                                             ======        ======
</TABLE>


          See Accompanying Notes to Consolidated financial Statements
<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, 1997                       17,343      $  (134)    $ 1,297    $ 1,163

Net income for the year ended
  December 31, 1998                           --            3         333        336
                                          ------       ------      ------     ------

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
                                          ======       ======      ======     ======
</TABLE>

          See Accompanying Notes to Consolidated financial Statements
<PAGE>



<TABLE>
<CAPTION>

                     SHELTER PROPERTIES VII LIMITED PARTNERSHIP
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                                   (in thousands)


                                                             Years Ended December 31,
                                                                 1999         1998

Cash flows from operating activities:
<S>                                                             <C>          <C>

  Net income                                                    $   545     $   336
  Adjustments to reconcile net income to net
   cash provided by operating activities:
   Depreciation                                                     823         856
   Amortization of discounts and loan costs                          45          39
   Change in accounts:
      Receivables and deposits                                       81          37
      Other assets                                                  (25)         36
      Accounts payable                                               46         (70)
      Tenant security deposits liabilities                            2          (1)
      Accrued taxes                                                (21)          57
      Other liabilities                                              74          11
                                                                 ------      ------

          Net cash provided by operating activities               1,570       1,301
                                                                 ------      ------

Cash flows from investing activities:

  Property improvements and replacements                           (873)       (514)
  Net withdrawals from (deposits to) restricted escrows              52          (4)
                                                                 ------      ------

          Net cash used in investing activities                    (821)       (518)
                                                                 ------      ------

Cash flows from financing activities:

  Payments on mortgage notes payable                              (209)        (194)
  Distributions paid to partners                                (1 267)          --
                                                                ------       ------

          Net cash used in financing activities                 (1,476)        (194)
                                                                ------       ------

Net (decrease) increase in cash and cash equivalents              (727)         589

Cash and cash equivalents at beginning of period                 1,201          612
                                                                ------       ------

Cash and cash equivalents at end of period                     $   474      $ 1,201
                                                                ======       ======

Supplemental disclosure of cash flow information:

  Cash paid for interest                                       $   832      $   847
                                                                ======       ======
</TABLE>

          See Accompanying Notes to Consolidated financial Statements

<PAGE>






                     SHELTER PROPERTIES VII LIMITED PARTNERSHIP

                     Notes to Consolidated Financial Statements

                                December 31, 1999

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 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.  The Corporate General Partner is a subsidiary of Apartment  Investment
and  Management  Company  ("AIMCO")  (see "Note B - Transfer of  Control").  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  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.

                                                        Years Ended December 31,
                                                            1999          1998
                                                            ----          ----
                                                             (in thousands)

Net cash provided by operating activities                  $1,570        $1,301
   Property improvements and replacements                    (873)         (514)
   Payments on mortgage notes payable                        (209)         (194)
   Changes in reserves for net operating liabilities         (157)          (70)
   Changes in restricted escrows, net                          52            (4)
   Additional reserves                                       (383)           --
                                                            -----         -----

      Net cash from operations                             $   --        $  519
                                                            =====         =====

The Corporate  General Partner reserved  approximately  $383,000 at December 31,
1999 to fund capital  improvements and repairs at its two properties.  No amount
was reserved at December 31, 1998.

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.

No  distributions  were made for the year ended December 31, 1998. The following
table sets forth the  distributions  made by the Partnership for the years ended
December 31, 1998 and 1999.

                                                Distributions

                                                           Per Limited
                                        Aggregate        Partnership Unit

       01/01/99 - 12/31/99             $1,267,000 (1)         $72.13

(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.


<PAGE>

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, 1999,  the Reserve  Account is
fully funded.

Undistributed Net Proceeds from Refinancing:
-------------------------------------------

At December  31,  1999,  $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.


<PAGE>

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  1999  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 decrease in other reserves during 1999 was approximately  $157,000, as
compared to a decrease of approximately  $70,000 during 1998. 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.

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,  1999,  is
approximately $39,000, 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, 1999 and 1998.

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.

Effective  January 1, 1999 the  Partnership  changed its method of accounting to
capitalize the cost of exterior painting and major landscaping (Note I).

Loan Costs:
----------

Loan  costs  of  approximately  $304,000,  net of  accumulated  amortization  of
approximately  $206,000, 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  amount of its  financial  instruments
(except for long term debt)  approximates their fair value 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 and $71,000 for the years ended December 31, 1999 and
1998, respectively, were charged to operating expense as incurred.

Segment Reporting:
-----------------

Statement of Financial Standards ("SFAS") No. 131, "Disclosure about Segments of
an Enterprise and Related Information"  ("Statement 131"), 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.  (See "Note G" for segment
disclosure.)

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  (the "Insignia  Merger").  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, 1999 and 1998:

                                                         1999       1998
                                                         ----       ----
                                                         (in thousands)

Property management fees (included in operating
  expenses)                                             $ 200      $ 196
Reimbursements for services of affiliates
  (included in operating, general and
  administrative expenses, and investment
  properties)                                              75         93

During the years ended  December 31, 1999 and 1998,  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  $200,000 and
$196,000 for the years ended December 31, 1999 and 1998, respectively.

An  affiliate  of  the  Corporate  General  Partner  received  reimbursement  of
accountable  administrative  expenses  amounting  to  approximately  $75,000 and
$93,000 for the years ended December 31, 1999 and 1998, respectively.

Several tender offers were made by various parties,  including affiliates of the
general partners, during the years ended December 31, 1999 and 1998. As a result
of these tender offers,  AIMCO and its  affiliates  currently own 8,954 units of
limited  partnership  interest  in the  Partnership  representing  approximately
51.63% of the  outstanding  units.  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.  Consequently,  AIMCO is in a position to
significantly  influence all voting  decisions  with respect to the  Registrant.
Under the Partnership Agreement, unitholders holding a majority of the Units are
entitled  to take action  with  respect to a variety of matters.  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 their
affiliation with the Corporate General Partner.

Note D - Mortgage Notes Payable

The principle terms of mortgage notes payable are as follows:

<TABLE>
<CAPTION>
                             Principal    Monthly                          Principal
                            Balance At    Payment     Stated                Balance
                            December 31,  Including   Interest  Maturity     Due At
                               1999       Interest     Rate      Date      Maturity
Properties                       (in thousands)                          (in thousands)
----------
<S>                          <C>           <C>        <C>     <C>          <C>

Hickory Ridge Apartments      $ 6,233       $ 51       7.50%   03/01/01     $ 6,057
Governor's Park
 Apartments
  1st mortgage                  4,397          35      7.83%   10/15/03       4,083
  2nd mortgage                    147           1      7.83%   10/15/03         147
                               ------       -----                            ------
                               10,777      $   87                           $10,287
                                            =====                            ======
Less unamortized
  discounts                       (49)
                               ------
                              $10,728
</TABLE>

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.  The estimated fair value of the  Partnership's  aggregate debt is
approximately  $10,728,000.  This amount is not  necessarily  indicative  of the
amount the Partnership may pay in actual market transactions.

Scheduled  principal  payments  of the  mortgage  notes  payable  subsequent  to
December 31, 1999 are as follows (in thousands):

                               2000             $   225
                               2001               6,164
                               2002                  88
                               2003               4,300
                                                 ------
                                                $10,777


<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              $ 6,233      $ 1,060     $11,839         $ 2,163
  Memphis, Tennessee

Governor's Park Apartments              4,544          714       6,496             562
 Ft. Collins, Colorado                 ------       ------      ------          ------
             Totals                   $10,777      $ 1,774     $18,335         $ 2,725
                                       ======       ======      ======          ======
</TABLE>


                                 Gross Amount At Which Carried
                                     At December 31, 1999
                                        (in thousands)

<TABLE>

                              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  $14,002   $15,062  $ 7,981      1971-1973     08/27/85    5-29
 Memphis, Tennessee
Governor's Park           714    7,058     7,772    3,604       1983         09/30/85    5-39
 Ft. Collins, Colorado ------   ------    ------   ------

       Totals         $ 1,774  $21,060   $22,834  $11,585
                        =====   ======    ======   ======

</TABLE>

Reconciliation of "Real Estate and Accumulated Depreciation":

                                                     December 31,
                                                   1999         1998
                                                   ----         ----
                                                    (in thousands)

Real Estate

Balance at beginning of year                      $21,961      $21,447
    Property improvements                             873          514
                                                   ------       ------

Balance at end of year                            $22,834      $21,961
                                                   ======       ======

Accumulated Depreciation

Balance at beginning of year                      $10,762      $ 9,906
    Additions charged to expense                      823          856
                                                   ------       ------

Balance at end of year                            $11,585      $10,762
                                                   ======       ======

The  aggregate  cost of investment  property for Federal  income tax purposes at
December  31,  1999  and  1998 is  approximately  $25,604,000  and  $24,732,000,
respectively. The accumulated depreciation taken for Federal income tax purposes
at December 31, 1999 and 1998, is  approximately  $16,263,000  and  $15,234,000,
respectively.


<PAGE>



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):

                                                     1999         1998
                                                     ----         ----

Net income as reported                              $  545       $  336
Add (deduct):
   Depreciation differences                           (205)        (133)
   Unearned income                                     (43)          23
   Other                                               148           23
                                                     -----        -----

Federal taxable income                              $  445       $  249
                                                     =====        =====

Federal taxable income per limited
   partnership unit                                 $25.40       $14.22
                                                     =====        =====

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                    $  777
                  Buildings                                  2,770
                  Accumulated depreciation                  (4,676)
                  Syndication fees                           2,292
                  Other                                        197
                                                             -----

                  Net assets - tax basis                    $1,360
                                                             =====

Note G - Segment Reporting

Description  of the types of products  and  services  from which the  reportable
segment derives its revenues:

The  Partnership  has  one  reportable  segment:   residential  properties.  The
Partnership's   residential   properties   segment  consists  of  two  apartment
complexes,  located in Tennessee and Colorado.  The Partnership  rents apartment
units to tenants for terms that are typically twelve months or less.


<PAGE>

Measurement of segment profit or loss:

The  Partnership  evaluates  performance  based on segment  profit (loss) before
depreciation.  The accounting policies of the reportable segment are the same as
those of the  Partnership as described in the summary of significant  accounting
policies.

Factors management used to identify the enterprise's reportable segment:

The  Partnership's  reportable  segment  consists of investment  properties that
offer similar products and services.  Although each of the investment properties
is  managed  separately,  they have been  aggregated  into one  segment  as they
provide services with similar types of products and customers.

Segment  information  for the years ended December 31, 1999 and 1998 is shown in
the tables below. The "Other" column includes partnership administration related
items and income and expense not allocated to the reportable segment.

                 1999                    Residential     Other     Totals
                 ----                    -----------     -----     ------
                                                  (in thousands)

Rental income                              $ 3,832       $   --    $ 3,832
Other income                                   183           10        193
Interest expense                               889           --        889
Depreciation                                   823           --        823
General and administrative expense              --          230        230
Segment profit (loss)                          765         (220)       545
Total assets                                11,896          170     12,066
Capital expenditures for investment
  Properties                                   873           --        873

                 1998                    Residential     Other     Totals
                 ----                    -----------     -----     ------
                                                  (in thousands)

Rental income                              $ 3,745       $   --    $ 3,745
Other income                                   179           20        199
Interest expense                               884           --        884
Depreciation                                   856           --        856
General and administrative expense              --          163        163
Segment profit (loss)                          479         (143)       336
Total assets                                12,380          508     12,888
Capital expenditures for investment
  properties                                   514           --        514


<PAGE>


Note H - 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,  the 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  the  acquisition  by Insignia  Financial  Group,  Inc.
("Insignia")  and  entities  which  were,  at one time,  affiliates  of Insignia
("Insignia  Affiliates") of interests in certain general partner entities,  past
tender offers by Insignia  Affiliates to acquire limited  partnership units, the
management of partnerships  by Insignia  Affiliates and the Insignia Merger (see
"Note B - Transfer  of  Control").  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  have 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 final  court
approval, on behalf of the Partnership and all limited partners who own units as
of November 3, 1999.  Preliminary  approval of the  settlement  was  obtained on
November 3, 1999 from the Superior Court of the State of  California,  County of
San Mateo, 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 class  plaintiffs'  counsel
to enter the settlement. On December 14, 1999, the Corporate General Partner and
its affiliates terminated the proposed settlement. Certain plaintiffs have filed
a motion to  disqualify  some of the  plaintiffs'  counsel  in the  action.  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.

Note I - Change in Accounting Principle

Effective  January 1, 1999, the Partnership  changed its method of accounting to
capitalize the cost of exterior  painting and major landscaping on a prospective
basis.  The  Partnership  believes  that  this  accounting  principle  change is
preferable  because it provides a better  matching of expenses  with the related
benefit of the expenditures and it is consistent with industry  practice and the
policies of the Corporate General Partner.  The effect of the change in 1999 was
to increase net income by approximately  $80,000 ($4.57 per limited  partnership
unit). The cumulative effect, had this change been applied to prior periods,  is
not material.  The accounting  principle  change will not have an effect on cash
flow,  funds available for  distribution or fees payable to the Managing General
Partner and affiliates.


<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              42    Executive Vice President and Director

Martha L. Long               40    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 Corporate
General  Partner and AIMCO since October 1998, as a result of the acquisition of
Insignia  Financial  Group,  Inc. 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.

Based solely upon a review of Forms 3 and 4 and amendments  thereto furnished to
the Registrant  under Rule 16a-3(e) during the  Registrant's  most recent fiscal
year and Forms 5 and amendments thereto furnished to the Registrant with respect
to its most recent  fiscal year,  the  Registrant  is not aware of any director,
officer,  beneficial  owner of more than ten  percent  of the  units of  limited
partnership interest in the Registrant that failed to file on a timely basis, as
disclosed in the above Forms,  reports required by section 16(a) of the Exchange
Act during the most recent  fiscal year or prior fiscal years except as follows:
AIMCO Properties,  L.P. and its joint filers failed to timely file a Form 3 with
respect to its  acquisition  of Units and AIMCO and its joint  filers  failed to
timely file a Form 4 with respect to its acquisition of Units.

Item 10. Executive Compensation

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


<PAGE>



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, 1999.

                  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.               5,077               29.28%
             (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 address is 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, acquired 5,077 Units during the current year.

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, 1999 and 1998:

                                                         1999       1998
                                                         ----       ----
                                                         (in thousands)

Property management fees (included in operating
  expenses)                                             $ 200      $ 196
Reimbursements for services of affiliates
  (included in operating, general and
  administrative expenses, and investment
  properties)                                              75         93

During the years ended  December 31, 1999 and 1998,  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  $200,000 and
$196,000 for the years ended December 31, 1999 and 1998, respectively.

An  affiliate  of  the  Corporate  General  Partner  received  reimbursement  of
accountable  administrative  expenses  amounting  to  approximately  $75,000 and
$93,000 for the years ended December 31, 1999 and 1998, respectively.

Several tender offers were made by various parties,  including affiliates of the
general partners, during the years ended December 31, 1999 and 1998. As a result
of these tender offers,  AIMCO and its  affiliates  currently own 8,954 units of
limited  partnership  interest  in the  Partnership  representing  approximately
51.63% of the  outstanding  units.  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.  Consequently,  AIMCO is in a position to
significantly  influence all voting  decisions  with respect to the  Registrant.
Under the Partnership Agreement, unitholders holding a majority of the Units are
entitled  to take action  with  respect to a variety of matters.  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 their
affiliation with the Corporate General Partner.


<PAGE>



Item 13.  Exhibits and Reports on Form 8-K

      (a)   Exhibits:

            Exhibit 18, Independent Accountants' Preferability Letter for Change
            in Accounting Principle, is filed as an exhibit to this report.

            Exhibit 27, Financial Data Schedule,  is filed as an exhibit to this
            report.

       (b) Reports on Form 8-K filed in the fourth quarter of calendar year
           1999:

            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:


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:
------------------
Patrick J. Foye         and Director

/s/Martha L. Long       Senior Vice President         Date:
-----------------
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].



<PAGE>

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.*

     (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.

     18   Independent Accountants' Preferability Letter for Change in Accounting
          Principle.

     22   Subsidiaries of the Registrant

     27   Financial Data Schedule

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

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

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

     ****Filed  as Exhibits 28 (a) and (b) to Form 10-QSB  dated  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


<PAGE>


                                                                      Exhibit 18

February 24, 2000


Mr. Patrick J. Foye
Executive Vice President
Shelter Realty VII Corporation

Corporate General Partner of Shelter Properties VII
55 Beattie Place
P.O. Box 1089
Greenville, South Carolina 29602

Dear Mr. Foye:

Note I of Notes to the Consolidated  Financial  Statements of Shelter Properties
VII included in its Form 10-KSB for the year ended December 31, 1999 describes a
change in the method of  accounting to  capitalize  exterior  painting and major
landscaping,  which  would have been  expensed  under the old  policy.  You have
advised us that you believe  that the change is to a  preferable  method in your
circumstances because it provides a better matching of expenses with the related
benefit of the expenditures and is consistent with policies currently being used
by your industry and conforms to the policies of the Corporate General Partner.

There are no authoritative criteria for determining a preferable method based on
the particular circumstances; however, we conclude that the change in the method
of accounting  for exterior  painting and major  landscaping is to an acceptable
alternative  method which,  based on your business  judgment to make this change
for the reasons cited above, is preferable in your circumstances.

                                                               Very truly yours,
                                                           /s/ Ernst & Young LLP