<PAGE>
 
                    U.S. SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C.  20549

                                  FORM 10-KSB


(Mark One)

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

For the fiscal year ended December 31, 1998

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

For the transition period from ................to...............

Commission file number 000-21722

          WINDSOR PARK PROPERTIES 7, A CALIFORNIA LIMITED PARTNERSHIP
--------------------------------------------------------------------------------
             (Exact name of small business issuer in its charter)
<TABLE>
<CAPTION>
 
<S>                                                  <C>
 California                                                               33-0363181
---------------------------------------------------          ------------------------------------
(State or other jurisdiction of                              (I.R.S. Employer Identification No.)
incorporation or organization)
 
                         6430 South Quebec Street, Englewood, CO  80111
                        ---------------------------------------------------
                        (Address of principal executive offices) (Zip Code)
 
</TABLE>
Issuer's telephone number:  (303) 741-3707

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 disclosure of delinquent filers in response to Item 405 of Regulation
S-B is not contained in this form, and no disclosure will be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB.  [  X  ]

  State issuer's revenues for its most recent fiscal year:  $2,800,471

                  DOCUMENTS INCORPORATED BY REFERENCE:  None

  Transitional small business disclosure format (check one): Yes [ ]  No [X]

                                       1
<PAGE>
 
                               TABLE OF CONTENTS
<TABLE>
<CAPTION>
 
                                            PART I
                                            ------

                                                                                     Page
                                                                                     ----
<S>         <C>                                                                     <C> 
Item 1.     Description of Business                                                    3
 
Item 2.     Description of Properties                                                  5
 
Item 3.     Legal Proceedings                                                          7
 
Item 4.     Submission of Matters to a Vote of Security Holders                        7
 
                                           PART II
                                           -------
 
Item 5.     Market for the Partnership's Units and Related Security Holder Matters     7
 
Item 6.     Management's Discussion and Analysis                                       8
 
Item 7.     Financial Statements                                                      11
 
Item 8.     Changes in and Disagreements with Accountants on Accounting
            and Financial Disclosure                                                  24
 
                                           PART III
                                           --------
 
Item 9.     Directors, Executive Officers, Promoters and Control Persons;
            Compliance with Section 16(a) of The Exchange Act                         25
 
Item 10.    Executive Compensation                                                    26
 
Item 11.    Security Ownership of Certain Beneficial Owners and Management            26
 
Item 12.    Certain Relationships and Related Transactions                            27
 
Item 13.    Exhibits and Reports on Form 8-K                                          28
 
            SIGNATURES                                                                29
 
</TABLE>

                                       2
<PAGE>
 
                                 PART I
                                 ------

Item 1.  DESCRIPTION OF BUSINESS
         -----------------------

Certain matters discussed under the captions "Description of Business," 
"Description of Properties," "Management's Discussion and Analysis of Financial 
Condition and Results of Operations" and elsewhere in this Annual Report on Form
10-KSB may constitute forward-looking statements for purposes of Section 21E of 
the Securities Exchange Act of 1934, as amended, and as such involve known and 
unknown risks, uncertainties and other factors which may cause the actual 
results, performance or achievements of Windsor Park Properties 7, a California 
Limited Partnership to be materially different from any future results, 
performance or achievement expressed or implied by such forward-looking 
statements.

Business Development
--------------------

Windsor Park Properties 7, a California Limited Partnership (the "Partnership"),
was formed in June 1989 pursuant to the provisions of the California Uniform
Limited Partnership Act. The general partners of the Partnership are The Windsor
Corporation, a California corporation ("The Windsor Corporation"), and John A.
Coseo, Jr. In September 1997, Chateau Communities, Inc. ("Chateau"), a publicly
held real estate investment trust, purchased all of the outstanding capital
stock of The Windsor Corporation for 101,239 common shares of Chateau, and
$750,000 in cash. Following the purchase of The Windsor Corporation Chateau
appointed a new Board of Directors and elected Steven G. Waite as President of
The Windsor Corporation. The Partnership term is set to expire in December 2005;
however, the Partnership may either be dissolved earlier or extended under
certain circumstances. The Partnership may be extended at the recommendation of
the General Partners with approval of a majority of the limited partners.

The Partnership was organized to acquire and hold existing manufactured home
communities for investment.  Its principal investment objectives are to provide
to its limited partners:  (i) distributions of cash from operations, (ii)
preservation, protection and eventual return of the limited partners'
investment, and (iii) realization of appreciation in the value of the properties
acquired.

The Partnership was funded through a public offering of 250,000 limited
partnership units ("Units").  A total of 159,332 Units were sold for gross
proceeds aggregating $15,933,200.  The offering commenced in March 1990 and
terminated in January 1992.  The net proceeds from the offering were originally
expended for the acquisition of undivided interests in four manufactured home
communities located in Florida, Washington and Indiana.  The Partnership paid
all cash for the properties.

In February 1995, through a proxy vote of the limited partners, an amendment to
the Agreement of Limited Partnership was approved permitting the financing of
currently owned manufactured home communities and the reinvestment of financing
proceeds into newly acquired manufactured home communities to be purchased with
permanent mortgage financing.  Overall Partnership mortgage financing will not
exceed 55% of the value of existing and newly acquired properties.

Subsequent to the approval of the financing and reinvestment proposal discussed
above, the Partnership obtained two loans collateralized by interests in
currently owned manufactured home communities.  The proceeds from these loans
were used as partial consideration to purchase interests in six additional
manufactured home communities.  The remaining consideration was obtained from
permanent mortgage financing.

The Partnership was organized in March 1990 and, thus, many of our current
limited partners have held an investment in the Partnership for more than 8
years. The General Partners believe that many of the limited partners would like
to have the opportunity to achieve liquidity in their investment in the
Partnership. Accordingly, the General Partners are currently exploring possible
strategic alternative for the Partnership with a view towards providing limited
partners with the opportunity to achieve liquidity in their investment. There
can, however, be no assurances that any proposal determined by the General
Partners to be in the best interests of the limited partners will be consummated
or that the Partnership will not continue in its current form until the end of
its stated term.

                                       3
<PAGE>
 
The Partnership owns interests in the following manufactured home communities at
December 31, 1998:

<TABLE>
<CAPTION>
                                                                  
                                                        Date       
Name of Property                       Ownership %    Acquired              Location
-------------------------------------  -----------  -------------  ---------------------------
<S>                                    <C>          <C>            <C>
Carefree Village                               56%  July 1990      Tampa, Florida
North Glen                                    100%  October 1991   Westfield, Indiana
Kings & Queens                                100%  February 1992  Lakeland, Florida
The Hills                                     100%  December 1992  Richland, Washington
Lucerne                                       100%  June 1995      Winter Haven, Florida
Long Lake                                      60%  June 1995      West Palm Beach, Florida
Garden Walk                                    69%  August 1995    Palm Beach Gardens, Florida
Village Glen                                  100%  October 1995   Melbourne, Florida
Apache East                                    26%  February 1997  Phoenix, Arizona
Denali Park                                    26%  February 1997  Phoenix, Arizona
</TABLE>

The above described ownership interests where the Partnership owns less than
100% of a property consist of ownership interests in joint ventures or limited
partnerships that own one or more manufactured home communities.

No further property financings or investment property acquisitions are planned
by the General Partners.

The overall occupancy of the ten communities owned by the Partnership at
December 31, 1998 was approximately 93%.  The General Partners continue to
maintain the properties in good condition and promote them to improve occupancy.

Business of Issuer
------------------

The Partnership is currently in the business of managing, holding for
investment, and eventually selling the existing manufactured home communities.
Competitors of the Partnership include other public and private limited
partnerships, individuals, corporations, and other entities engaged in real
estate investment activities.  Competition for such properties varies with
changes in the supply or demand for similar or competing properties in a given
area, changes in interest rates and the availability of mortgage funds, and
changes in tax, real estate, environmental, and zoning laws.

Partnership profitability depends in part on maximizing occupancy and rental
rates in its manufactured home communities.  Rents and occupancy rates are
affected by both changes in general economic conditions and changes in local
conditions such as levels of employment, supply of other comparable units or
competitive housing alternatives, zoning laws and the availability and cost of
energy and transportation.

All of the properties are located in or near large urban areas.  Accordingly,
they compete for rentals not only with the other manufactured home communities
but with apartments and any other form of low-cost housing that might exist.

The Partnership's profitability also depends on the minimization of both
property and partnership administration expenses.  Expenses are affected by
changes in general economic trends and changes in local conditions such as
prevailing wages, utility rates, insurance costs, and real estate taxation
practices.

The Partnership has no employees.  Partnership administrative services are
provided by The Windsor Corporation, which is reimbursed for costs incurred on
behalf of the Partnership.  An independent property management company employs
all of the properties' on-site personnel and is reimbursed by the Partnership
for such costs.

                                       4
<PAGE>
 
Item 2.  DESCRIPTION OF PROPERTIES
         -------------------------

The Partnership owns interests in ten properties at December 31, 1998.  The
Partnership operates the properties as manufactured home communities, renting
space to manufactured home tenants on a month-to-month basis.  The properties
compete for rentals with other manufactured home communities and apartments in
their local markets.  All of the properties are encumbered.  It is the General
Partners' opinion that the properties are in good condition and are adequately
insured.

<TABLE>
<CAPTION>
 
                                                                                    
                                       Carefree Village            North Glen          Kings & Queens        The Hills
                                     --------------------      -------------------  --------------------  ----------------
                                            Tampa,                 Westfield,            Lakeland,           Richland,
Location                                   Florida                   Indiana              Florida            Washington
-------------------------------------------------------------------------------------------------------------------------
<S>                                  <C>                       <C>                  <C>                   <C>
Percentage of Ownership                               56%                     100%                  100%              100%
Date Acquired                                       7/90                    10/91                  2/92             12/92
Acreage                                               58                       38                    19                52
Number of Spaces                                     406                      289                   107               223
Monthly Rents (1)                             $      263               $      215            $      205        $      210
Occupancy Level:
  December 31, 1998                                   87%                      99%                   98%               98%
Real Estate Taxes                             $  134,200               $   34,400            $   20,500        $   32,500
Federal Tax Basis (3)                         $2,804,200               $3,275,700            $  983,700        $2,322,400
Mortgage Information:
  Balance payable                             $3,479,800               $4,620,000                    (2)               (2)
  Interest rate                                     8.23%                    8.23%                   (2)               (2)
  Amortization period                                 --                       --                    (2)               (2)
  Maturity date                                     6/02                     6/02                    (2)               (2)
  Balance due at maturity                     $3,479,800               $4,620,000                    (2)               (2)
</TABLE>

                                       5
<PAGE>
 
Item 2.  DESCRIPTION OF PROPERTIES  (continued)
         --------------------------            
<TABLE>
<CAPTION>
                                                                                                         
                                                                                         Long Lake           
                                                                   Garden Walk            Village        
                                         Village Glen          -------------------  --------------------      Lucerne
                                     --------------------          Palm Beach            West Palm        ----------------
                                            Tampa,                  Gardens,               Beach,          Winter Haven,
Location                                   Florida                   Florida              Florida             Florida
-------------------------------------------------------------------------------------------------------------------------
<S>                                  <C>                       <C>                  <C>                   <C>
 
Percentage of Ownership                              100%                      69%                   60%              100%
Date Acquired                                      10/95                     8/95                  6/95              6/95
Acreage                                               27                       71                    19                14
Number of Spaces                                     143                      484                   134               140
Monthly Rents (1)                             $      248               $      351            $      356        $      212
Occupancy Level:
  December 31, 1998                                   99%                      91%                   83%               98%
Real Estate Taxes                             $   34,400               $  162,800            $   39,500        $   27,800
Federal Tax Basis (3)                         $2,155,600               $5,997,800            $1,841,100        $1,673,800
Mortgage Information:
  Balance payable                             $1,500,000               $5,700,000            $1,600,000        $1,100,000
  Interest rate                                     8.82%                    8.23%                 8.23%             8.23%
  Amortization period                                 --                       --                    --                --
  Maturity date                                     8/02                     8/02                  6/02              6/02
  Balance due at maturity                     $1,500,000               $5,700,000            $1,600,000        $1,100,000
</TABLE>

<TABLE>
<CAPTION>
 

                                                                                    
                                         Apache East               Denali Park      
                                     --------------------      -------------------  
                                           Phoenix,                 Phoenix,        
Location                                   Arizona                   Arizona        
---------------------------------------------------------------------------------
<S>                                  <C>                       <C>
Percentage of Ownership                               26%                      26%
Date Acquired                                       2/97                     2/97
Acreage                                               16                       33
Number of Spaces                                     123                      162
Monthly Rents (1)                             $      220                 $    202
Occupancy Level:
  December 31, 1998                                   93%                      91%
Real Estate Taxes                             $   17,500                 $ 24,100
Federal Tax Basis (3)                         $  565,200                 $728,000
Mortgage Information:
  Balance payable                             $3,009,395                       (4)
  Interest rate                                     8.38%                      (4)
  Amortization period                           24 years                       (4)
  Maturity date                                     3/06                       (4)
  Balance due at maturity                     $2,583,200                       (4)
</TABLE>

(1)  Average rental rates in effect on December 31, 1998.
(2)  Same mortgage note payable as North Glen.
(3)  For income tax purposes, the properties and their components are
     depreciated using both straight-line and accelerated methods over useful
     lives ranging from 5 to 40 years.
(4)  Same mortgage note payable as Apache East.

                                       6
<PAGE>
 
Item 3.  LEGAL PROCEEDINGS
         -----------------

There are no pending legal proceedings, other than ordinary routine litigation
incidental to the business, to which the Partnership is a party or of which any
of its properties is the subject.

Item 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
         ---------------------------------------------------

There were no matters submitted to security holders for a vote during the fourth
quarter of the fiscal year covered by this report.

                                    PART II
                                    -------

Item 5.  MARKET FOR THE PARTNERSHIP'S UNITS AND RELATED SECURITY HOLDER
         --------------------------------------------------------------
         MATTERS
         -------

A public market for the Partnership's units does not exist and is not likely to
develop. As of December 31, 1998, there were approximately 1,800 holders of
record holding an aggregate of 154,578 units.

Cash distributions to limited partners paid since December 31, 1996 are as
follows:

<TABLE>
<CAPTION>
                                                                                   Per $1,000
Date Paid                                              Amount (1)                 Invested (2)
------------------------------------------------  ---------------------  ------------------------------
<S>                                               <C>                    <C>
December 1997                                                  $99,600                           $6.25
November 1997                                                  $99,600                           $6.25
October 1997                                                   $98,700                           $6.19
September 1997                                                 $98,700                           $6.19
August 1997                                                    $98,700                           $6.19
July 1997                                                      $98,700                           $6.19
June 1997                                                      $98,700                           $6.19
May 1997                                                       $98,700                           $6.19
April 1997                                                     $98,700                           $6.19
March 1997                                                     $98,700                           $6.19
February 1997                                                  $98,700                           $6.19
January 1997                                                   $98,700                           $6.19
------------------------------------------------------------------------------------------------------
 
December 1998                                                  $97,000                           $6.09
November 1998                                                  $97,000                           $6.09
October 1998                                                   $97,000                           $6.09
September 1998                                                 $97,700                           $6.09
August 1998                                                    $97,900                           $6.14
July 1998                                                      $97,900                           $6.14
June 1998                                                      $97,900                           $6.14
May 1998                                                       $97,900                           $6.14
April 1998                                                     $97,900                           $6.14
March 1998                                                     $97,900                           $6.14
February 1998                                                  $97,900                           $6.14
January 1998                                                   $97,900                           $6.14
</TABLE>

(1)  Amounts exclude General Partner participation.
(2)  Computed based on $15,933,200 original investment.

                                       7
<PAGE>
 
Cash distributions paid to the General Partners since December 31, 1996 were
$23,800.

Item 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS
         ------------------------------------

The following discussion should be read in conjunction with the financial
statements and Notes thereto included elsewhere in this Annual Report.  Certain
statements in this discussion constitute "forward-looking statements" within the
meaning of Section 21E of the Securities Exchange Act of 1934, as amended.  Such
forward-looking statements involve known and unknown risks, uncertainties and
other factors which may cause the actual results, performance or achievements of
the partnership or industry to be materially different from any future results,
performance or achievements expressed or implied by such forward-looking
statements.

Liquidity and Capital Resources
-------------------------------

The Partnership's primary sources of cash during the years ended December 31,
1998 and 1997 were from the operations of its investment properties and cash
distributions from joint ventures and limited partnerships.  The Partnership's
primary uses of cash during the same period were for the purchases of interests
in investment properties, debt service and cash distributions to partners.

In February 1995, through a proxy vote of the limited partners, an amendment to
the Agreement of Limited Partnership was approved permitting the financing of
currently owned manufactured home communities and the reinvestment of financing
proceeds into newly acquired manufactured home communities to be purchased with
permanent mortgage financing.  Overall Partnership mortgage financing will not
exceed 55% of the value of existing and newly acquired properties.

All of the Partnership's loans, except the Village Glen loan, are payable in
monthly interest only installments bearing interest at 90 day LIBOR plus 2.95%
(8.23% at December 31, 1998) and are due in 2002. The Partnership and the
affiliated entities are jointly and severally liable for the full amounts of the
loans obtained jointly.

At December 31, 1998, the Partnership's total mortgage debt, including its
proportionate share of joint venture debt, was $14,852,100, consisting of
$1,500,000 of fixed rate debt and $13,352,100 of variable rate debt.  The
average rate of interest on the fixed and variable rate debt was 8.2% and 8.9%,
respectively, at December 31, 1998.

The future sources of cash for the Partnership will be provided from property
operations, cash reserves and ultimately from the sale of property.  The future
uses of cash will be for Partnership administration, capital expenditures, cash
distributions to partners and debt service.  The General Partners believe that
the future sources of cash are sufficient to meet the working capital
requirements of the Partnership for the foreseeable future.

Results of Operations
---------------------

The Partnership realized net income of $309,500 and $197,800 for the years ended
December 31, 1998 and 1997, respectively.  Net income per limited partnership
unit was $1.97 in 1998 compared to $1.24 in 1997.

                                       8
<PAGE>
 
Equity in earnings of joint ventures represents the Partnership's share of the
net income of the Carefree Village, the Long Lake Village, Garden Walk, Apache
East and Denali Park communities.  Equity in earnings of joint ventures
decreased from $156,300 in 1997 to $145,300 in 1998.  The overall occupancy of
the Partnership's five joint venture properties increased from 84% at December
31, 1997 to 89% in 1998.

Interest income decreased from $40,400 in 1997 to $14,300 in 1998 due mainly to
lower cash balances maintained by the Partnership.

Property operating and maintenance expense remained relatively stable increasing
slightly from $1,105,600 in 1997 to $1,111,000 in 1998.

Interest expense decreased from $693,700 in 1997 to $661,800 in 1998 primarily
due to the payoff of $200,000 of notes in February 1998.

General and administrative expenses remained relatively constant for the year
ended 1997 to the same period in 1998.

All of the leases or terms of tenants' occupancies at the properties allow for 
at least annual rental adjustments. In addition, all of the lease are 
month-to-month and enable the Partnership to seek market rentals upon reletting 
the sites. Such leases generally minimize the risk to the Partnership of any 
adverse effect of inflation.

Year 2000 Compliance

The general partners have assessed the impact of the Year 2000 Issue on its
reporting systems and operations. The Year 2000 Issue exists because many
computer systems and applications abbreviate dates by eliminating the first two
digits of the year, assuming that these two digits are always "19". As a result,
date-sensitive computer programs may recognize a date using "00" as the year
1900 rather than the year 2000. Unless corrected, the potential exists for
computer system failures or incorrect processing of financial and operational
information, which could disrupt operations.

Substantially all of the computer systems and applications and operating systems
in use by the Windsor Corporation and the properties have been, or are in the
process of being upgraded and modified. The Partnership is of the opinion that,
in connection with those upgrades and modifications, it has addressed applicable
Year 2000 Issues as they might affect the computer systems and applications
located in the Partnership's offices and properties. The Partnership anticipates
that implementation of solutions to any Year 2000 Issue which it may discover
will require the expenditure of sums which the Partnership does not expect to be
material.

The Partnership is exposed to the risk that one or more of its vendors or
service providers may experience Year 2000 problems which impact the ability of
such vendor or service provider to provide goods and services.  Due to the
availability of alternative suppliers, this is not considered as significant a
risk with respect to the suppliers of goods.  The disruption of certain
services, however, such as utilities, could, depending upon the extent of the
disruption, have a material adverse impact on the Partnership's operations.  To
date, the Partnership is not aware of any vendor or service provider Year 2000
issue that management believes would have a material adverse impact on the
Partnership's operations.  The Partnership, however, has no means of ensuring
that its vendors or service providers will be Year 2000 ready.  The inability of
vendors or service providers to complete the Year 2000 resolution process in a
timely fashion could have an adverse impact on the Partnership, and the effect
of non-compliance by vendors or service providers is not determinable at this
time.  Residents who pay rent to the Partnership do not pose Year 2000 problems
for the Partnership given the type and nature of the Partnership's properties
and residents.

                                       9
<PAGE>
 
Widespread disruptions in the national or international economy, including
disruptions affecting the financial markets, resulting from Year 2000 issues, or
in certain industries, such as commercial or investment banks, could also have
an adverse impact on the Partnership.  The likelihood and effect of such
disruptions is not determinable at this time.

The Partnership expects to have all systems appropriately modified before any
significant processing malfunctions could occur and does not expect the Year
2000 Issue will materially impact the financial condition or operations of the
Partnership.

                                       10
<PAGE>
 
Item 7.    FINANCIAL STATEMENTS
           --------------------

The following financial statements are filed as a part of this report:
                                                Page
                                                ----
 
Report of Independent Accountants                 12
 
Balance Sheet as of December 31, 1998             13
 
Statements of Operations for the years ended
 December 31, 1998 and 1997                       14
 
Statements of Partners' Equity for the years
 ended December 31, 1998 and 1997                 15
 
Statements of Cash Flows for the years ended
 December 31, 1998 and 1997                       16
 
Notes to Financial Statements                     17
 

                                       11
<PAGE>
 
REPORT OF INDEPENDENT ACCOUNTANTS



To the Partners of Windsor Park Properties 7,
A California Limited Partnership

In our opinion, the accompanying balance sheet and the related statements of
operations, partners' equity and cash flows present fairly, in all material
respects, the financial position of Windsor Park Properties 7, a California
Limited Partnership (the "Partnership") at December 31, 1998, and the results of
its operations and its cash flows for each of the two years in the period ended
December 31, 1998, in conformity with generally accepted accounting principles.
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 of these statements in
accordance with generally accepted auditing standards which require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for the opinion expressed
above.



PricewaterhouseCoopers LLP
Denver, Colorado
March 19, 1999

                                       12
<PAGE>
 
<TABLE>
<CAPTION>
                                              WINDSOR PARK PROPERTIES 7
                                              -------------------------
                                         (A California Limited Partnership)
                                                    BALANCE SHEET
                                                    -------------
 
 
 
                                                                                            December 31, 1998
                                                                                      ------------------------------
ASSETS
------
<S>                                                                                     <C>
 
Property held for investment, net                                                          $              10,807,400
Investments in joint ventures and limited partnerships                                                     4,756,300
Cash and cash equivalents                                                                                    183,600
Deferred financing costs, net                                                                                153,500
Other assets                                                                                                  42,800
                                                                                      ------------------------------
 
Total Assets                                                                               $              15,943,600
                                                                                      ==============================
 
LIABILITIES AND PARTNERS' EQUITY
--------------------------------
 
Liabilities:
  Mortgage notes payable                                                                   $               7,220,000
  Accounts payable                                                                                             1,600
  Accrued expenses                                                                                           221,400
  Due to general partners and affiliates                                                                      27,800
  Tenant deposits and other liabilities                                                                       46,300
                                                                                      ------------------------------
 
Total Liabilities                                                                                          7,517,100
                                                                                      ------------------------------
 
Commitments and contingencies (Note 8)                                                                            --
 
Partners' Equity:
  Limited partners                                                                                         8,475,500
  General partners                                                                                           (49,000)
                                                                                      ------------------------------
 
Total Partners' Equity                                                                                     8,426,500
                                                                                      ------------------------------
 
Total Liabilities and Partners' Equity                                                     $              15,943,600
                                                                                      ==============================
</TABLE>



                 See accompanying notes to financial statements

                                       13
<PAGE>
 
<TABLE>
<CAPTION>
                                        WINDSOR PARK PROPERTIES 7
                                        -------------------------
                                   (A California Limited Partnership)
                                        STATEMENTS OF OPERATIONS
                                        ------------------------
 
 
                                                                 For The Year Ended December 31,
                                                      ---------------------------------------------------
                                                                1998                      1997
                                                      ------------------------    -----------------------
REVENUES
--------
<S>                                                     <C>                        <C>
Rent and utilities                                         $         2,611,500        $         2,475,500
Equity in earnings of joint ventures and limited
 partnerships                                                          145,300                    156,300
 
Interest                                                                14,300                     40,400
Other                                                                   29,400                     32,300
                                                      ------------------------    -----------------------
 
                                                                     2,800,500                  2,704,500
                                                      ------------------------    -----------------------
 
 
COSTS AND EXPENSES
------------------
 
Property operating                                                   1,111,000                  1,105,600
Interest                                                               661,800                    693,700
Depreciation                                                           610,000                    601,000
General and administrative:
  Related parties                                                       42,900                     70,000
  Other                                                                 65,300                     36,400
                                                      ------------------------    -----------------------
 
                                                                     2,491,000                  2,506,700
                                                      ------------------------    -----------------------
 
Net income                                                 $           309,500        $           197,800
                                                      ========================    =======================
 
Net income - general partners                              $             3,100        $             2,000
                                                      ========================    =======================
 
Net income - limited partners                              $           306,400        $           195,800
                                                      ========================    =======================
 
Basic and diluted earnings per limited partnership         $              1.97        $              1.24
 unit                                                 ========================    ======================= 
                                                      
</TABLE>



                 See accompanying notes to financial statements

                                       14
<PAGE>
 
<TABLE>
<CAPTION>
                                               WINDSOR PARK PROPERTIES 7
                                           (A California Limited Partnership)
                                             STATEMENTS OF PARTNERS' EQUITY
                                     FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997
 
 
                                              General  Partners                Limited Partners                 Total
                                         ---------------------------     ---------------------------     ------------------------
<S>                                   <C>                              <C>                               <C>
 
Balance at December 31, 1996             $         (30,300)              $      10,602,500                 $      10,572,200
 
Cash distributions                                 (11,900)                     (1,186,200)                       (1,198,100)
 
Net income                                           2,000                         195,800                           197,800
 
Repurchase of limited
 partnership                                             -                         (93,400)                          (93,400)
  units
                                         -----------------               -----------------                 ----------------- 
 
Balance at December 31, 1997                       (40,200)                      9,518,700                         9,478,500
 
Cash distributions                                 (11,900)                     (1,171,900)                       (1,183,800)
 
Net income                                           3,100                         306,400                           309,500
 
Repurchase of limited
 partnership                                       
  units                                                  -                        (177,700)                        (177,700) 
                                         -----------------               -----------------                 ----------------- 
 
Balance at December 31, 1998             $         (49,000)              $       8,475,500                 $       8,426,500
                                         =================               =================                 =================
</TABLE>



                 See accompanying notes to financial statements

                                       15
<PAGE>
 
<TABLE>
<CAPTION>
                                           WINDSOR PARK PROPERTIES 7
                                      (A California Limited Partnership)
                                           STATEMENTS OF CASH FLOWS

                                                                     For The Year Ended December 31,
                                                          ----------------------------------------------------
                                                                   1998                         1997
                                                          ------------------------    ------------------------
<S>                                                       <C>                         <C>
Cash flows from operating activities:
 Net income                                                 $              309,500        $            197,800
  Adjustments to reconcile net income to net cash
    provided by operating activities:
       Depreciation                                                        610,000                     601,000
       Equity in earnings of joint ventures and                           (145,300)                   (156,300)
        limited partnerships
       Joint ventures and limited partnerships' cash                       145,300                     156,300
        distributions
       Gain on sale of property held for
        investment and other assets                                             --                      (2,900)
       Amortization of deferred financing costs                             42,500                      42,400
 
Changes in operating assets and liabilities:
  Decrease in other assets                                                  16,400                      17,200
  Decrease in accounts payable                                             (23,100)                     (1,500)
  (Decrease) increase in due to general partners and                       (70,900)                     98,700
   affiliates
  Increase (decrease) in accrued expenses                                  161,400                     (58,400)
  Decrease in tenant deposits and other liabilities                        (68,900)                    (10,500)
                                                          ------------------------    ------------------------
 
Net cash provided by operating activities                                  976,900                     883,800
                                                          ------------------------    ------------------------
 
Cash flows from investing activities:
  Increase in property held for investment                                (158,000)                   (172,700)
  Joint ventures and limited partnerships' cash                            501,700                     283,400
   distributions
  Proceeds from sale of property  and other assets                              --                      28,200
  Note receivable payments from general partners                                --                     653,300
  Investments in joint ventures and limited partnerships                   (54,200)                   (116,900)
                                                          ------------------------    ------------------------
 
Net cash provided by investing activities                                  289,500                     675,300
                                                          ------------------------    ------------------------
 
Cash flow from financing activities:
   Cash distributions                                                   (1,183,800)                 (1,198,100)
   Repurchase of limited partnership units                                (177,700)                    (93,400)
   Payment of mortgage note payable                                       (200,000)                   (300,000)
                                                          ------------------------    ------------------------
 
Net cash used in financing activities                                   (1,561,500)                 (1,591,500)
                                                          ------------------------    ------------------------
 
Net decrease in cash and cash equivalents                                 (295,100)                    (32,400)
 
Cash and cash equivalents at beginning of year                             478,700                     511,100
                                                          ------------------------    ------------------------
 
Cash and cash equivalents at end of year                    $              183,600        $            478,700
                                                          ========================    ========================
</TABLE>

                 See accompanying notes to financial statements

                                       16
<PAGE>
 
                           WINDSOR PARK PROPERTIES 7
                       (A California Limited Partnership)
                         NOTES TO FINANCIAL STATEMENTS


NOTE 1.  THE PARTNERSHIP AND A SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
         ----------------------------------------------------------------

The Partnership
---------------

Windsor Park Properties 7, a California Limited Partnership (the "Partnership"),
was formed in June 1989 for the purpose of acquiring and holding existing
manufactured home communities for investment.  The general partners of the
Partnership are The Windsor Corporation ("TWC"), a California corporation, and
John A. Coseo, Jr.  In September 1997, Chateau Communities, Inc. ("Chateau"), a
publicly held real estate investment trust, purchased 100% of the shares of TWC.

The Partnership was funded through a public offering of 250,000 limited
partnership units at $100 per unit, which commenced in March 1990 and terminated
in January 1992.  The Partnership term is set to expire on December 31, 2005;
however, the Partnership may either be dissolved earlier or extended under
certain circumstances.  The Partnership may be extended at the recommendation of
the general partners with approval of a majority of the limited partners.

Property Held for Investment
----------------------------

Property held for investment is carried at cost unless facts and circumstances
indicate that the carrying value of the property may be impaired. Impairment is
determined by comparing the estimated future cash flows (undiscounted and
without interest charges) from an individual property to its carrying value.  If
such cash flows are less than the property's carrying value, the carrying value
of the project is written down to its estimated fair value.  No such writedowns
were recorded for the years ended December 31, 1998 or 1997.

Property held for investment is depreciated over various estimated useful lives
(building and improvements - 5 to 20 years; fixtures and equipment - 3 to 5
years) using the straight-line method.  When assets are sold or otherwise
disposed of, the cost and related accumulated depreciation are removed from the
accounts, and any gain or loss is included in net income.  Repairs and
maintenance are charged to operations as incurred.

Investments In Joint Ventures and Limited Partnerships
------------------------------------------------------

The investments in joint ventures are accounted for utilizing the equity method
as the properties are subject to joint control requiring approval or mutual
agreement of the investees.  The investment in limited partnerships is also
accounted for utilizing the equity method as the limited partners have
significant rights.

                                       17
<PAGE>
 
Financing Costs
---------------

Financing costs are amortized to interest expense over the life of the note
utilizing a method, which approximates the effective interest method.



Income Taxes
------------

Under provisions of the Internal Revenue Code and the California Revenue and
Taxation Code, partnerships are generally not subject to income taxes.  The tax
effect of any income or loss accrues to the individual partners.

Basic and Diluted Earnings per Limited Partnership Unit
--------------------------------------------------------

Basic and diluted earnings per limited partnership unit is calculated based on
the weighted average number of limited partnership units outstanding during the
year and the net income allocated, which is the same as income available, to the
limited partners.  Basic and diluted earnings per limited partnership unit are
the same, as the Partnership has no dilutive securities.  The weighted average
number of limited partnership units outstanding during the years ended December
31, 1998 and 1997 was 155,873 and 157,469 respectively.

Statements of Cash Flows
------------------------

For purposes of the statements of cash flows, the Partnership considers all
highly-liquid investments purchased with an original maturity of three months or
less to be cash equivalents.

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 reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.

Revenue Recognition
-------------------

Rental income is recognized when earned and due from residents.  The leases
entered into by residents for the rental of a site are generally for terms not
longer than one year and renewable upon the consent of both parties or, in some
instances, as provided by statute.

                                       18
<PAGE>
 
NOTE 2.  PARTNERSHIP AGREEMENT
         ---------------------

In accordance with the partnership agreement, the maximum liability of the
Limited Partners is the amount of their capital contributions. The number of
limited partnership units outstanding at December 31, 1998 and 1997 was 154,578
and 156,641, respectively, which represented capital contributions of
$15,457,800 and $15,664,100, respectively. During the years ended December 31,
1998 and 1997, the Partnership repurchased 2,063 and 1,224 units, respectively,
for $177,700 and $93,400, respectively. The general partners owned 91 units at
both December 31, 1998 and 1997.

The general partners are entitled to receive from the Partnership various fees
and compensation which are summarized as follows:

Operational Stage
-----------------

The profits, losses and cash distributions of the Partnership during the
operational stage are allocated 99% to the Limited Partners and 1% to the
General Partners.  During the years ended December 31, 1998 and 1997, the
General Partners received cash distributions from operations of $11,900.

TWC receives a management fee which is based on a percent of actual gross
receipts collected from the operations of the properties. TWC receives 2.5% each
for Lucerne and Village Glen communities. For the years ended December 31, 1998
and 1997, the amounts paid to TWC were $19,700 and $18,700, respectively.

The Partnership reimburses TWC for certain direct expenses, and employee,
executive and administrative time which are incurred on the Partnership's
behalf. The Partnership was charged $42,900 and $82,000 for such costs during
the years ended December 31, 1998 and 1997, respectively. These costs are
included in property operating and general and administrative expenses in the
accompanying statements of operations. As of December 31, 1998, the Partnership
owed TWC $27,800.

Liquidation Stage
-----------------

During the Partnership's liquidation stage, the total compensation paid to all
persons for the sale of Partnership properties is limited to competitive real
estate commissions, not to exceed 6% of the contract price for the sale of the
property.  The General Partners may receive up to one-half of the competitive
real estate commission, not to exceed 3%, if they provide a substantial amount
of services in the sales effort. The General Partners' commission is
subordinated to the Limited Partners receiving a 6% cumulative, non-compounded,
annual return on their original invested capital.

The general partners also receive 15% of profits, losses and cash distributions
from the sale or financing of Partnership properties after the Limited Partners
have received a 9% cumulative, non-compounded, annual return on their original
invested capital.

                                       19
<PAGE>
 
NOTE 3.  PROPERTY HELD FOR INVESTMENT
         ----------------------------

Property held for investment consists of five manufactured home communities
summarized as follows:
 
<TABLE>
<CAPTION>
Name of Property                        Date Acquired                     Location
----------------                        -------------                     --------
<S>                                     <C>                               <C>
North Glen                              October 4, 1991                   Westfield, Indiana
Kings & Queens                          February 4, 1992                  Lakeland, Florida
The Hills                               December 24, 1992                 Richland, Washington
Lucerne                                 June 23, 1995                     Winter Haven, Florida
Village Glen                            October 3, 1995                   Melbourne, Florida
</TABLE>
 
<TABLE>
<CAPTION>
                                                                          December 31, 1998
                                                                    ---------------------------
<S>                                                                   <C>
 
Land                                                                  $               2,735,100
Buildings and improvements                                                           10,993,000
Fixtures and equipment                                                                  199,700
                                                                    ---------------------------
 
                                                                                     13,927,800
Less accumulated depreciation                                                        (3,120,400)
                                                                    ---------------------------
 
                                                                      $              10,807,400
                                                                    ===========================
</TABLE>


NOTE 4.  INVESTMENTS IN JOINT VENTURES AND LIMITED PARTNERSHIPS
         ------------------------------------------------------

The Partnership's investments in joint ventures and limited partnerships consist
of interests in five manufactured home communities summarized as follows:

<TABLE>
<CAPTION>
                                                       
                                        Ownership       
Name of Property                       Percentage            Date Acquired                    Location
---------------------------------  -------------------  ------------------------  ---------------------------------
<S>                                <C>                  <C>                       <C>
     Carefree Village                              56%  July 31, 1990             Tampa, Florida
     Long Lake Village                             60%  June 30, 1995             West Palm Beach, Florida
     Garden Walk                                   69%  August 15, 1995           Palm Beach Gardens, Florida
     Apache East                                   26%  February 18, 1997         Phoenix, Arizona
     Denali Park                                   26%  February 18, 1997         Phoenix, Arizona
</TABLE>

The remaining interests in the communities are owned by affiliated entities.

                                       20
<PAGE>
 
The combined condensed financial position and results of operations of the joint
ventures and limited partnerships are as follows (unaudited):

<TABLE>
<CAPTION>
                                                                                                       
Financial Position                                                          December 31, 1998          
-------------------------------------------------------------------------- --------------------------- 
<S>                                                                         <C>       <C>
Property held for investment, net                                              $            22,152,900
Cash                                                                                            71,100
Other assets                                                                                   565,700
                                                                          ----------------------------
 
    Total assets                                                               $            22,789,700
                                                                          ============================
 
 
Mortgage notes payable                                                         $            13,789,200
Accounts payable                                                                                 8,900
Other liabilities                                                                              244,200
                                                                          ----------------------------
 
    Total liabilities                                                                       14,042,300
 
Partners' equity                                                                             8,747,400
                                                                          ----------------------------
 
Total liabilities and partners' equity                                         $            22,789,700
                                                                          ============================
</TABLE>

<TABLE>
<CAPTION>
                                                                For the Year Ended December 31
                                                    -------------------------------------------------------
                                                                1998                          1997
                                                    ----------------------------    -----------------------
<S>                                                   <C>                           <C>
Results of Operations
---------------------
 
Property revenues                                        $             4,391,900        $         4,163,400
                                                    ----------------------------    -----------------------
 
Expenses:
  Property operating                                                   2,248,600                  2,101,500
  Interest                                                             1,270,900                  1,200,700
  Depreciation                                                           777,300                    715,900
                                                    ----------------------------    -----------------------
 
                                                                       4,296,800                  4,018,100
                                                    ----------------------------    -----------------------
 
Net income                                               $                95,100        $           145,300
                                                    ============================    =======================
</TABLE>

                                       21
<PAGE>
 
NOTE 5.  MORTGAGE NOTES PAYABLE
         ----------------------

Mortgage notes payable consist of the following at December 31, 1998:

<TABLE>
<S>                                                                                        <C>
Notes payable, collateralized by property held for investment,
payable in monthly interest only installments bearing interest
at 90-day LIBOR plus 2.95% (8.23% at December 31, 1998),
due in 2002                                                                                $             5,720,000
 
Note payable, collateralized by property held for investment,
payable in monthly interest only installments bearing interest
at a fixed rate of 8.82%, due in 2002                                                                    1,500,000
                                                                                         -------------------------
 
                                                                                           $             7,220,000
                                                                                         =========================
</TABLE>

                                       22
<PAGE>
 
NOTE 6.  DISTRIBUTIONS TO LIMITED PARTNERS
         ---------------------------------

Distributions to limited partners in excess of net income allocated to limited
partners are considered a return of capital.  A breakdown of cash distributions
to the limited partners for the years ended December 31, 1998 and 1997 follows:

<TABLE>
<CAPTION>
                                               1998                                                       1997
                        ----------------------------------------------------      -------------------------------------------------
                                                                          
                                                               Per                                                         Per
                                Amount                         Unit                                 Amount                 Unit
                                ------                         ----                                 ------                 ----
 
<S>                       <C>                          <C>                      <C>                                <C>
Net income
 - Limited Partners        $    306,400                 $       1.97              $                 195,800            $      1.24
Return of capital               865,500                         5.55                                990,400                   6.29
                        ----------------------------      ------------------      ----------------------------      ---------------
 
Total distributions        $  1,171,900                   $     7.52              $               1,186,200            $      7.53
                        ============================      ==================      ============================      ===============
</TABLE>


NOTE 7.  FAIR VALUE OF FINANCIAL INSTRUMENTS
         -----------------------------------

The carrying amounts of cash equivalents, accounts payable, accrued expenses and
other liabilities approximate fair value because of the short maturity of the
financial instruments.  The General Partners believe the carrying value of the
mortgage notes payable approximates fair value based upon interest rates
available for the issuance of debt with similar terms and maturities.

NOTE 8.  CONTINGENCIES
         -------------

The Partnership, as an owner of real estate, is subject to various environmental
laws.  Compliance by the Partnership with existing laws has not had a material
effect on the results of operations, financial condition or cash flows of the
Partnership, nor does management believe it will have a material impact in the
future.

The Partnership is jointly and severally liable for $13,789,200 of debt issued 
by affiliated entities in which it has a joint venture or limited partnership 
investment.

NOTE 9.  RELATED PARTY TRANSACTIONS
         -------------------------

Chateau and/or its predecessor have been providing property management services
to the Partnership since 1992. For this service, Chateau is paid a property
management fee, which is based on a percentage of actual gross receipts of the
properties. The total management fees paid to Chateau were $112,300 and $111,300
for the years ended December 31, 1998 and 1997, respectively. In addition
certain direct expenses are paid by Chateau on behalf of the Partnership and
then reimbursed by the Partnership. These amounts were $278,400 and $263,900 for
the years ended December 31, 1998 and 1997, respectively.

                                       23
<PAGE>
NOTE 10.  SUPPLEMENTAL CASH FLOW INFORMATION
          ----------------------------------
<TABLE>
<CAPTION>
                                                                                  1998                        1997
                                                                                  ----                        ----
<S>                                                                   <C>                         <C>
Supplemental disclosure of cash flow information:
  Cash paid during the year for:
    Interest (none capitalized)                                           $          612,000            $      653,200
                                                                    ========================      ====================
</TABLE>

                                      24
<PAGE>

Item 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         ---------------------------------------------------------------
         FINANCIAL DISCLOSURE
         --------------------

There were no disagreements over accounting or financial disclosure with the
independent accountants for the Partnership.

 
                                    PART III
                                    --------

Item 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL PERSONS;
         --------------------------------------------------------------
         COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
         -------------------------------------------------

The general partners of the Partnership are The Windsor Corporation, and John A.
Coseo, Jr.

In July 1994, The Windsor Corporation merged into Windsor Group, Inc., a
majority-owned subsidiary.  In conjunction with the merger, Windsor Group, Inc.
changed its name to The Windsor Corporation, hereafter, ("The Windsor
Corporation").

These entities were incorporated in 1977 and 1992, respectively, to engage in
the real estate syndication business.  Historically, they have concentrated
solely on the acquisition, management, and sale of fully-developed manufactured
home communities through the investment programs which they sponsor.

The executive officers of The Windsor Corporation do not receive direct
compensation from the Partnership in these capacities and are only required to
spend such time on the Partnership's affairs as is deemed necessary.
Substantial amounts of these officers' time is spent on matters unrelated to the
Partnership.

The names, ages, and nature of the positions held by the directors and executive
officers of The Windsor Corporation follow:
 
<TABLE>
<CAPTION>
                   Name                            Age                                Office
------------------------------------------    -----------    ------------------------------------------------------
<S>                                             <C>            <C>
Steven G. Waite                                        44      President and Director
Gary P. McDaniel                                       53      Director
C.G. Kellogg                                           55      Director
</TABLE>


A brief background of the general partners, directors and certain executive
officers of The Windsor Corporation follows.

Steven G. Waite (44) joined The Windsor Corporation in August 1997 as President.
Since 1991, until his involvement with Windsor, Mr. Waite served as Vice
President/General Manager of the Communities Division at Clayton Homes.  He was
responsible for the original start up of this division, and subsequently built
it into a successful and profitable area of Clayton Homes, expanding from eight
communities to 67 communities.  In addition, Mr. Waite has over eight years of
experience in the manufactured home community-lending arena.  He earned a
Bachelor of Arts degree from the University of Colorado and a Master of Business
Administration from the University of Alabama.  Mr. Waite is active in the
Manufactured Housing Institute.

                                       25
<PAGE>
 
Gary P. McDaniel (53), a director of The Windsor Corporation has been Chief
Executive Officer and a director of Chateau Communities, Inc. ("Chateau") since
February 1997. He served as the Chairman of the Board, President and Chief
Executive Officer for ROC Communities, Inc., which was merged with Chateau in
1997. Since 1993 he has been an executive and shareholder of ROC and its
predecessors since 1979, and has been active in the manufactured home industry
since 1972. Mr. McDaniel is also a Trustee of N'Tandem Trust which is advised by
The Windsor Corporation. Mr. McDaniel has been active in several state and
national manufactured home associations, including associations in Florida and
Colorado. In 1996, he was named "Industry Person of the Year" by the National
Manufactured Housing Industry Association. Mr. McDaniel is on the Board of
Directors of the Manufactured Housing Institute. He is a graduate of the
University of Wyoming and served as a Captain in the United States Air Force.

C.G. ("Jeff") Kellogg (55) has been President and a director of Chateau since
its inception and was Chief Executive Officer of Chateau from its inception to
February 1997.  For the five years preceding the formation of Chateau, Mr.
Kellogg was President and Chief Operating Officer of Chateau Estates.  He is
extremely active in local and national industry associations, often in
leadership positions.  Mr. Kellogg is a past President of the Michigan
Manufactured Housing Association and served on the Manufactured Housing
Institute's Community Operations Committee.  He is a graduate of Michigan
Technological University with a B.S. in Civil Engineering.

John A. Coseo, Jr. (59), the other general partner of the Partnership was the
founder of The Windsor Corporation in 1977 and has been actively involved in all
facets of the manufactured housing business since that time.  Mr. Coseo resigned
from his positions as a director and executive officer of The Windsor
Corporation in 1997.  From 1979 to the present, Mr. Coseo has acted as general
partner or advisor in the acquisition and management of 56 manufactured home
communities throughout the United States.  Mr. Coseo is a general partner of
seven limited partnerships which have registered their securities under the
Securities and Exchange Act of 1934.

Item 10.    EXECUTIVE COMPENSATION
            ----------------------

The Partnership has not paid and does not propose to pay any remuneration or
retirement benefits to John A. Coseo, Jr. and the directors or executive
officers of The Windsor Corporation.  Refer to Item 12 (Certain Relationships
and Related Transactions) for cash distributions and expense reimbursements paid
to The Windsor Corporation by the Partnership.


Item 11.     SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
             --------------------------------------------------------------

(a)  Security Ownership of Certain Beneficial Owners

     No person is known by the Partnership to be the beneficial owner of more
     than 5% of the limited partnership units.

(b)  Security Ownership of Management

                                       26
<PAGE>
 
     The following table presents certain information regarding the number of
     Units owned, directly or indirectly, by (i) each General Partner and (ii)
     all General Partners as a group as of December 31, 1998

<TABLE>
<CAPTION>
 
                                                  Amount and Nature of    Percent of Class
Title of Class             Beneficial Owner       Beneficial Ownership
-----------------------------------------------------------------------------------------
<S>                     <C>                     <C>                       <C>
 
Units of Limited        John A. Coseo, Jr.,
  Partnership Interest  a General Partner                             91             .059%
                                                                      --             ----
Units of Limited        All General Partners
  Partnership Interest  as a group                                    91             .059%
                                                                      ==             ====
</TABLE>

Item 12.    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
            ----------------------------------------------

The following table reflects all compensation accrued or paid to the General
Partners during the years ended December 31, 1998 and 1997.

<TABLE>
<CAPTION>
                                                                                                           
Form of Compensation and Entity Receiving                                     1998                         1997 
---------------------------------------------------------------------- --------------------         --------------------
<S>                                                                     <C>                          <C>
Expense reimbursement - The Windsor Corporation                           $          42,900             $         82,000
Property management fee - The Windsor Corporation                         $          19,700             $         18,700
Cash distributions - The Windsor Corporation                              $          11,900             $         11,900
</TABLE>

                                       27
<PAGE>
 
Item 13.  EXHIBITS AND REPORTS ON FORM 8-K
          --------------------------------

  (a)  Exhibits and Index of Exhibits

       (3) - Certificate and Agreement of Limited Partnership filed as Exhibit A
       to Registration Statement No. 33-23183 and incorporated herein by
       reference.

       (27) - Financial Data Schedule

  (b)  Reports on Form 8-K

       There were no reports on Form 8-K filed during the last quarter of the
       period covered by this Form 10-KSB.

                                       28
<PAGE>
 
                                 SIGNATURES

  Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized on this 31st day of March,
1999.


               WINDSOR PARK PROPERTIES 7
               A California Limited Partnership
               By:  THE WINDSOR CORPORATION

                 By:   /s/  Steven G. Waite
                    ----------------------------------
                   STEVEN G. WAITE
                   President


  Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.


<TABLE>
<CAPTION>
Signature                        Title                                    Date
---------                        -----                                    ----
<S>                              <C>                                      <C>
 
 
  /s/ Steven G. Waite            President of The Windsor Corporation,    March 31, 1999
-------------------------------  a  general partner
  STEVEN G. WAITE
 
 
 
/s/Gary P. McDaniel              Director of The Windsor Corporation, a   March 31, 1999
-------------------------------  general partner
GARY P. MCDANIEL
 
 
 
/s/C.G. Kellogg                  Director of The Windsor Corporation, a   March 31, 1999
-------------------------------  general partner
C.G. KELLOGG
 
 
 
/s/John A. Coseo, Jr.            General Partner                          March 31, 1999
-------------------------------
JOHN A. COSEO, JR.
</TABLE>

                                       29