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

                                   Form 10-QSB

(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
    ACT OF 1934


                    For the quarterly period ended June 30, 2003


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


                For the transition period from _________to _________

                         Commission file number 0-10260


                             SHELTER PROPERTIES III
             (Exact Name of Registrant as Specified in Its Charter)



         South Carolina                                          57-0718508
(State or other jurisdiction of                               (I.R.S. Employer
 incorporation or organization)                              Identification No.)

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

                                 (864) 239-1000
                           (Issuer's telephone number)

<PAGE>

                         PART I - FINANCIAL INFORMATION

ITEM 1.     FINANCIAL STATEMENTS

                             SHELTER PROPERTIES III
                           CONSOLIDATED BALANCE SHEET
                                   (Unaudited)
                        (in thousands, except unit data)

                                  June 30, 2003

<TABLE>
<CAPTION>

Assets
<S>                                                                          <C>
   Cash and cash equivalents                                                 $   247
   Receivables and deposits                                                      140
   Restricted escrow                                                              83
   Other assets                                                                  628
   Investment properties:
      Land                                                     $ 945
      Buildings and related personal property                   22,307
                                                                23,252
      Less accumulated depreciation                            (15,492)        7,760
                                                                            $ 8,858

Liabilities and Partners' Deficit
Liabilities
   Accounts payable                                                           $ 20
   Tenant security deposit liabilities                                            75
   Accrued property taxes                                                        172
   Other liabilities                                                             377
   Due to general partner                                                        253
   Mortgage notes payable                                                     12,868

Partners' Deficit
   General partners                                             $ (72)
   Limited partners (55,000 units issued and
      outstanding)                                              (4,835)       (4,907)
                                                                            $ 8,858

            See Accompanying Notes to Consolidated Financial Statements

</TABLE>

<PAGE>

                             SHELTER PROPERTIES III
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)
                      (in thousands, except per unit data)
<TABLE>
<CAPTION>

                                        Three Months Ended            Six Months Ended
                                             June 30,                     June 30,
                                       2003           2002           2003           2002
                                                   (Restated)                    (Restated)
Revenues:
<S>                                    <C>           <C>           <C>            <C>
  Rental income                        $ 939         $ 963         $ 1,858        $ 1,995
  Other income                             82            77            151            191
       Total revenues                   1,021         1,040          2,009          2,186

Expenses:
  Operating                               413           447            964            900
  General and administrative               61            65            162            152
  Depreciation                            224           219            443            434
  Interest                                237           244            469            490
  Property taxes                           87            77            172            166
       Total expenses                   1,022         1,052          2,210          2,142

(Loss) income from continuing
  operations                               (1)          (12)          (201)            44
Income from discontinued
  operations                               --            29             --             64

Net (loss) income                      $ (1)          $ 17          $ (201)        $ 108

Net (loss) income allocated
  to general partners (1%)             $ --           $ --           $ (2)          $ 1
Net (loss) income allocated
  to limited partners (99%)                (1)           17           (199)           107

                                       $ (1)          $ 17          $ (201)        $ 108
Per limited partnership unit:
  (Loss) income from
    continuing operations             $ (0.02)      $ (0.21)       $ (3.62)        $ 0.80
  Income from discontinued
    operations                             --          0.52             --           1.15

Net (loss) income                     $ (0.02)       $ 0.31        $ (3.62)        $ 1.95

Distribution per limited
  partnership unit                     $ --          $ 1.95          $ --          $ 1.95

            See Accompanying Notes to Consolidated Financial Statements

</TABLE>

<PAGE>

                               SHELTER PROPERTIES III
               CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' DEFICIT
                                   (Unaudited)
                        (in thousands, except unit data)

<TABLE>
<CAPTION>

                                     Limited
                                     Partnership     General      Limited
                                        Units        Partners    Partners     Total

<S>                                    <C>             <C>        <C>        <C>
Original capital contributions         55,000          $ 2        $27,500    $27,502

Partners' deficit at
   December 31, 2002                   55,000         $ (70)      $(4,636)   $(4,706)

Net loss for the six months
   ended June 30, 2003                     --             (2)        (199)      (201)

Partners' deficit at
   June 30, 2003                       55,000         $ (72)      $(4,835)   $(4,907)

            See Accompanying Notes to Consolidated Financial Statements

</TABLE>

<PAGE>

                             SHELTER PROPERTIES III
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
                                 (in thousands)
<TABLE>
<CAPTION>

                                                                    Six Months Ended
                                                                        June 30,
                                                                     2003        2002
Cash flows from operating activities:
<S>                                                                <C>          <C>
  Net (loss) income                                                $ (201)      $ 108
  Adjustments to reconcile net (loss) income to net cash
   (used in) provided by operating activities:
     Depreciation                                                     443          559
     Amortization of discounts and loan costs                           9           15
     Change in accounts:
      Receivables and deposits                                         42           (1)
      Other assets                                                   (264)         (54)
      Accounts payable                                               (164)         (59)
      Tenant security deposit liabilities                               9           --
      Accrued property taxes                                           36          (78)
      Other liabilities                                                66           96
         Net cash (used in) provided by operating activities          (24)         586

Cash flows used in investing activities:
  Property improvements and replacements                             (216)        (209)

Cash flows from financing activities:
   Payments on mortgage notes payable                                (179)        (162)
   Distributions to partners                                           --         (108)
         Net cash used in financing activities                       (179)        (270)

Net (decrease) increase in cash and cash equivalents                 (419)         107

Cash and cash equivalents at beginning of period                      666          237

Cash and cash equivalents at end of period                         $ 247        $ 344

Supplemental disclosure of cash flow information:
 Cash paid for interest                                            $ 468        $ 483

            See Accompanying Notes to Consolidated Financial Statements

</TABLE>

<PAGE>

                             SHELTER PROPERTIES III
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)


Note A - Basis of Presentation

The  accompanying   unaudited   consolidated  financial  statements  of  Shelter
Properties  III (the  "Partnership"  or  "Registrant")  have  been  prepared  in
accordance with generally accepted  accounting  principles for interim financial
information  and  with the  instructions  to Form  10-QSB  and  Item  310(b)  of
Regulation  S-B.  Accordingly,  they do not include all of the  information  and
footnotes  required by generally  accepted  accounting  principles  for complete
financial  statements.  The general  partner  responsible  for management of the
Partnership's  business  is Shelter  Realty III  Corporation,  a South  Carolina
corporation (the "Corporate General Partner").  The Corporate General Partner is
a  subsidiary  of Apartment  Investment  and  Management  Company  ("AIMCO"),  a
publicly  traded real estate  investment  trust. In the opinion of the Corporate
General  Partner,  all  adjustments  (consisting of normal  recurring  accruals)
considered  necessary  for a fair  presentation  have been  included.  Operating
results  for the  three  and six  month  periods  ended  June  30,  2003 are not
necessarily  indicative  of the results that may be expected for the fiscal year
ending  December 31, 2003. For further  information,  refer to the  consolidated
financial  statements and footnotes thereto included in the Partnership's Annual
Report on Form 10-KSB for the fiscal year ended December 31, 2002.

Effective  January 1, 2002,  the  Partnership  adopted  Statement  of  Financial
Accounting  Standards  No. 144,  "Accounting  for the  Impairment or Disposal of
Long-Lived Assets", which established standards for the way that public business
enterprises  report  information  about long-lived  assets that are either being
held for sale or have  already  been  disposed  of by sale or other  means.  The
standard  requires  that results of  operations  for a long-lived  asset that is
being  held  for  sale  or  has  already  been  disposed  of  be  reported  as a
discontinued  operation  on  the  statement  of  operations.  As a  result,  the
accompanying  consolidated  statements  of  operations  have been restated as of
January 1, 2002 to reflect the  operations of North River Village  Apartments as
income from discontinued operations due to its sale in December 2002.

Note B - Reconciliation of Cash Flows

As required by the Partnership  Agreement,  the following is a reconciliation of
"Net cash  (used in)  provided  by  operating  activities"  in the  accompanying
consolidated statements of cash flows 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.

                                                        For the Six Months Ended
                                                                June 30,
                                                          2003            2002
                                                             (in thousands)
Net cash (used in) provided by operating activities      $ (24)          $ 586
  Payments on mortgage notes payable                      (179)           (162)
  Property improvements and replacements                  (216)           (209)
  Changes in reserves for net operating assets             275              96
  Additional reserves                                       --            (311)
     Net cash used in operations                        $ (144)          $ --

For the six months ended June 30, 2003, the Corporate  General Partner  believed
it to be in the best interest of the  Partnership to use cash from operations of
approximately  $144,000 to fund continuing  capital  improvements and repairs in
order for the  properties to remain  competitive.  For the six months ended June
30, 2002, the Corporate General Partner reserved  approximately $311,000 to fund
capital   improvements  and  repairs  at  the  Partnership's   three  investment
properties.

Note C - Transactions with Affiliated Parties

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.

During the six months ended June 30, 2003 and 2002,  affiliates of the Corporate
General  Partner were  entitled to receive 5% of gross  receipts from all of the
Partnership's   properties  for  providing  property  management  services.  The
Partnership paid to such affiliates  approximately  $96,000 and $142,000 for the
six months  ended June 30, 2003 and 2002,  respectively,  which are  included in
operating expenses and income from discontinued operations.

An  affiliate  of  the  Corporate  General  Partner  received  reimbursement  of
accountable  administrative  expenses  amounting  to  approximately  $80,000 and
$105,000  for the six months ended June 30, 2003 and 2002,  respectively,  which
are included in general and administrative  expenses and investment  properties.
Included in these amounts are fees related to construction  management  services
provided by an  affiliate  of the  Corporate  General  Partner of  approximately
$3,000 for the six months ended June 30, 2003.  Fees for the same period in 2002
were less than $1,000.  The construction  management service fees are calculated
based on a percentage of current year additions to the investment properties.

During 1986, a liability of  approximately  $185,000 was incurred to the general
partners for sales commissions  earned.  Pursuant to the Partnership  Agreement,
this  liability  cannot be paid until certain  levels of returns are received by
the limited  partners.  As of June 30, 2003,  the level of return to the limited
partners has not been met and the balance is included in due to general  partner
in the accompanying consolidated balance sheet.

Pursuant to the  Partnership  Agreement and in connection with the sale of North
River Village Apartments in 2002, the Corporate General Partner is entitled to a
commission  of up to 1%  for  its  assistance  in  the  sale.  Payment  of  such
commission  is  subordinate  to the limited  partners  receiving a cumulative 7%
return on their  investment.  This return has not yet been met, and accordingly,
$68,000  was  accrued  and  is  included  in  due  to  general  partner  in  the
accompanying consolidated balance sheet at June 30, 2003.

The  Partnership  insures its properties up to certain  limits through  coverage
provided by AIMCO which is  generally  self-insured  for a portion of losses and
liabilities  related to workers  compensation,  property  casualty  and  vehicle
liability. The Partnership insures its properties above the AIMCO limits through
insurance  policies  obtained  by  AIMCO  from  insurers  unaffiliated  with the
Corporate  General Partner.  During the six months ended June 30, 2003 and 2002,
the  Partnership was charged by AIMCO and its affiliates  approximately  $59,000
and $92,000,  respectively,  for  insurance  coverage and fees  associated  with
policy claims administration.

Note D - Disposition of Investment Property

On December 13, 2002, the Partnership sold North River Village  Apartments to an
unrelated  third party for a gross sale price of  $6,800,000.  The net  proceeds
realized by the  Partnership  were  approximately  $6,613,000  after  payment of
closing costs of  approximately  $187,000.  The Partnership  used  approximately
$1,568,000 of the net proceeds to repay the mortgages  encumbering the property.
The Partnership  realized a gain of approximately  $4,348,000 for the year ended
December 31, 2002, as a result of this sale. The property's  operations,  income
of approximately $29,000 and $64,000 and revenues of approximately  $274,000 and
$562,000  for the three and six months ended June 30,  2002,  respectively,  are
included in income from discontinued operations.

Note E - Legal Proceedings

In March 1998, several putative unit holders of limited partnership units of the
Partnership  commenced an action  entitled  Rosalie  Nuanes,  et al. v. Insignia
Financial Group, Inc., et al. (the "Nuanes action") in the Superior Court of the
State of  California  for the  County  of San  Mateo.  The  plaintiffs  named as
defendants,  among others,  the Partnership,  its Corporate  General Partner and
several of their  affiliated  partnerships  and corporate  entities.  The action
purported  to  assert  claims  on  behalf  of a class of  limited  partners  and
derivatively  on behalf  of a number  of  limited  partnerships  (including  the
Partnership)  that are named as nominal  defendants,  challenging,  among  other
things,  the  acquisition  of interests  in certain  Corporate  General  Partner
entities by Insignia Financial Group, Inc.  ("Insignia") and entities that were,
at one  time,  affiliates  of  Insignia;  past  tender  offers  by the  Insignia
affiliates to acquire limited partnership units;  management of the partnerships
by the  Insignia  affiliates;  and the series of  transactions  which  closed on
October 1, 1998 and February 26, 1999 whereby  Insignia and Insignia  Properties
Trust,  respectively,  were merged into AIMCO.  The plaintiffs  sought  monetary
damages and equitable relief, including judicial dissolution of the Partnership.
On June 25, 1998, the Corporate General Partner filed a motion seeking dismissal
of the action.  In lieu of responding  to the motion,  the  plaintiffs  filed an
amended complaint.  The Corporate General Partner filed demurrers to the amended
complaint, which were heard February 1999.

Pending the ruling on such  demurrers,  settlement  negotiations  commenced.  On
November 2, 1999,  the parties  executed and filed a Stipulation  of Settlement,
settling claims, subject to court approval, on behalf of the Partnership and all
limited partners who owned units as of November 3, 1999. Preliminary approval of
the  settlement  was obtained on November 3, 1999 from the Court,  at which time
the Court set a final  approval  hearing for  December  10,  1999.  Prior to the
December  10,  1999  hearing,  the  Court  received  various  objections  to the
settlement, including a challenge to the Court's preliminary approval based upon
the alleged lack of authority of prior lead counsel to enter the settlement.  On
December 14, 1999, the Corporate  General Partner and its affiliates  terminated
the  proposed  settlement.  In  February  2000,  counsel  for some of the  named
plaintiffs filed a motion to disqualify plaintiff's lead and liaison counsel who
negotiated  the  settlement.  On June  27,  2000,  the  Court  entered  an order
disqualifying  them  from the case and an  appeal  was  taken  from the order on
October 5, 2000. On December 4, 2000, the Court  appointed the law firm of Lieff
Cabraser  Heimann & Bernstein  LLP as new lead  counsel for  plaintiffs  and the
putative class.  Plaintiffs filed a third amended complaint on January 19, 2001.
On March 2, 2001,  the  Corporate  General  Partner and its  affiliates  filed a
demurrer to the third amended  complaint.  On May 14, 2001,  the Court heard the
demurrer to the third amended  complaint.  On July 10, 2001, the Court issued an
order  sustaining  defendants'  demurrer on certain  grounds.  On July 20, 2001,
Plaintiffs filed a motion for reconsideration of the Court's July 10, 2001 order
granting in part and denying in part defendants' demurrer. On September 7, 2001,
Plaintiffs  filed a fourth amended class and  derivative  action  complaint.  On
September 12, 2001, the Court denied Plaintiffs' motion for reconsideration.  On
October 5, 2001, the Corporate General Partner and affiliated defendants filed a
demurrer to the fourth amended complaint,  which was heard on December 11, 2001.
On February 2, 2002,  the Court served its order  granting in part the demurrer.
The Court dismissed without leave to amend certain of the plaintiffs' claims. On
February 11, 2002, plaintiffs filed a motion seeking to certify a putative class
comprised  of all  non-affiliated  persons  who own or have  owned  units in the
partnerships.  The Corporate General Partner and affiliated  defendants  opposed
the motion.  On April 29, 2002, the Court held a hearing on  plaintiffs'  motion
for class  certification  and took the matter  under  submission  after  further
briefing,  as ordered by the court,  was  submitted by the parties.  On July 10,
2002, the Court entered an order vacating the trial date of January 13, 2003 (as
well as the pre-trial and  discovery  cut-off  dates) and stayed the case in its
entirety  through November 7, 2002 so that the parties could have an opportunity
to discuss settlement. On October 30, 2002, the court entered an order extending
the stay in effect through January 10, 2003.

During the third  quarter of 2001, a complaint  (the "Heller  action") was filed
against  the same  defendants  that are named in the  Nuanes  action,  captioned
Heller v. Insignia Financial Group. On or about August 6, 2001, plaintiffs filed
a first  amended  complaint.  The  Heller  action  was  brought  as a  purported
derivative  action,  and  asserted  claims for,  among other  things,  breach of
fiduciary duty, unfair competition,  conversion, unjust enrichment, and judicial
dissolution.  Plaintiffs in the Nuanes action filed a motion to consolidate  the
Heller action with the Nuanes action and stated that the Heller action was filed
in order to preserve the derivative  claims that were dismissed without leave to
amend in the Nuanes action by the Court order dated July 10, 2001. On October 5,
2001, the Corporate  General Partner and affiliated  defendants  moved to strike
the first  amended  complaint in its entirety for violating the Court's July 10,
2001 order  granting  in part and  denying in part  defendants'  demurrer in the
Nuanes action,  or  alternatively,  to strike certain  portions of the complaint
based on the statute of limitations.  Other defendants in the action demurred to
the fourth amended complaint, and, alternatively, moved to strike the complaint.
On  December  11,  2001,  the court  heard  argument on the motions and took the
matters under  submission.  On February 4, 2002,  the Court served notice of its
order granting  defendants' motion to strike the Heller complaint as a violation
of its July 10,  2001  order in the  Nuanes  action.  On  March  27,  2002,  the
plaintiffs  filed a notice  appealing the order striking the  complaint.  Before
completing briefing on the appeal, the parties stayed further proceedings in the
appeal in light of a settlement.

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

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

On June 13, 2003, the Court granted final approval of the settlement and entered
judgment in both the Nuanes and Heller actions.

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

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 2.     Management's Discussion and Analysis or Plan of Operation

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

The Partnership's  investment  properties consist of three apartment  complexes.
The following table sets forth the average  occupancy of the properties for each
of the six months ended June 30, 2003 and 2002:

                                                            Average
                                                           Occupancy
       Property                                        2003          2002

       Essex Park Apartments
          Columbia, South Carolina                     84%            82%

       Colony House Apartments
          Murfeesboro, Tennessee                       94%            94%

       Willowick Apartments
          Greenville, South Carolina                   89%            91%

Results of Operations

The Partnership's  net loss was approximately  $1,000 and $201,000 for the three
and six months  ended June 30,  2003,  respectively,  compared  to net income of
approximately $17,000 and $108,000,  respectively, for the corresponding periods
in 2002.  The decrease in net income for the three months ended June 30, 2003 is
due to a decrease in income from discontinued operations and a decrease in total
revenues,  partially offset by a decrease in total expenses. The decrease in net
income for the six months  ended  June 30,  2003 is due to a decrease  in income
from discontinued  operations,  a decrease in total revenues, and an increase in
total expenses.

Effective  January 1, 2002,  the  Partnership  adopted  Statement  of  Financial
Accounting  Standards  No. 144,  "Accounting  for the  Impairment or Disposal of
Long-Lived Assets", which established standards for the way that public business
enterprises  report  information  about long-lived  assets that are either being
held for sale or have  already  been  disposed  of by sale or other  means.  The
standard  requires  that results of  operations  for a long-lived  asset that is
being  held  for  sale  or  has  already  been  disposed  of  be  reported  as a
discontinued  operation  on  the  statement  of  operations.  As a  result,  the
accompanying  consolidated  statements  of  operations  have been restated as of
January 1, 2002 to reflect the  operations of North River Village  Apartments as
income from discontinued operations.

On December 13, 2002, the Partnership sold North River Village  Apartments to an
unrelated  third party for a gross sale price of  $6,800,000.  The net  proceeds
realized by the  Partnership  were  approximately  $6,613,000  after  payment of
closing costs of  approximately  $187,000.  The Partnership  used  approximately
$1,568,000 of the net proceeds to repay the mortgages  encumbering the property.
The Partnership  realized a gain of approximately  $4,348,000 for the year ended
December 31, 2002, as a result of this sale. The property's  operations,  income
of approximately $29,000 and $64,000 for the three and six months ended June 30,
2002,  respectively,  and  revenues  of  approximately  $274,000  and  $562,000,
respectively, are included in income from discontinued operations.

Excluding the  discontinued  operations,  the  Partnership  realized a loss from
continuing operations of approximately $1,000 and $12,000, respectively, for the
three months ended June 30, 2003 and 2002, and a loss from continuing operations
of  approximately  $201,000 for the six months  ended June 30, 2003  compared to
income from continuing operations of approximately $44,000 for the corresponding
period in 2002.  The decrease in loss from  continuing  operations for the three
months  ended June 30,  2003 is due to a decrease in total  expenses,  partially
offset by a decrease in total  revenues.  The decrease in income from continuing
operations  for the six months ended June 30, 2003 is due to a decrease in total
revenues and an increase in total  expenses.  The decrease in total revenues for
the three months ended June 30, 2003 is due to a decrease in rental income.  The
decrease  in total  revenues  for the six months  ended June 30,  2003 is due to
decreases in both rental and other  income.  Rental  income  decreased  due to a
decrease in average  rental rates at all three of the  Partnership's  investment
properties, a decrease in occupancy at Willowick Apartments,  and an increase in
concessions  at Colony House  Apartments  and  Willowick  Apartments,  partially
offset by an  increase  in  occupancy  at Essex Park  Apartments.  Other  income
decreased for the six months ended June 30, 2003, primarily due to a decrease in
utility  reimbursements  and corporate housing revenue at Essex Park Apartments.
Other income  remained  relatively  constant for the three months ended June 30,
2003.

The  decrease in total  expenses for the three months ended June 30, 2003 is due
to a decrease in operating  expense.  The increase in total expenses for the six
months ended June 30, 2003 is due to an increase in operating expense, partially
offset by a decrease in interest expense.  The decrease in operating expense for
the three months  ended June 30, 2003 is  primarily  due to decreases in utility
and payroll related expenses at all of the properties. The increase in operating
expense for the six months ended June 30, 2003 is  primarily  due to an increase
in  contract  maintenance  expense at all of the  properties  and an increase in
advertising expense at Essex Park Apartments,  partially offset by a decrease in
property management fees as a result of the decrease in rental income.  Interest
expense decreased due to the scheduled payments on the mortgages encumbering the
investment properties.

Included in general and  administrative  expense during the three and six months
ended June 30,  2003 and 2002 are  management  reimbursements  to the  Corporate
General Partner as allowed under the Partnership Agreement.  In addition,  costs
associated  with the  quarterly  and annual  communications  with  investors and
regulatory  agencies and the annual audit required by the Partnership  Agreement
are also included in general and administrative expenses.

As part of the ongoing business plan of the Partnership,  the Corporate  General
Partner monitors the rental market environments of its investment  properties to
assess the feasibility of increasing rents,  maintaining or increasing occupancy
levels and protecting  the  Partnership  from increases in expenses.  As part of
this plan, the Corporate  General  Partner  attempts to protect the  Partnership
from the burden of  inflation-related  increases in expenses by increasing rents
and maintaining a high overall occupancy level.  However, 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 June 30, 2003, the Partnership had cash and cash equivalents of approximately
$247,000  compared to  approximately  $344,000 at June 30,  2002.  Cash and cash
equivalents  decreased  approximately  $419,000  from  December  31, 2002 due to
approximately  $216,000  of cash  used in  investing  activities,  approximately
$179,000 of cash used in financing activities, and approximately $24,000 of cash
used in operating  activities.  Cash used in investing  activities  consisted of
property  improvements  and  replacements.  Cash  used in  financing  activities
consisted   of  payments  of  principal  on  the   mortgages   encumbering   the
Partnership's  properties.  The Partnership invests its working capital reserves
in interest bearing accounts.

The sufficiency of existing  liquid assets to meet future  liquidity and capital
expenditure   requirements   is  directly   related  to  the  level  of  capital
expenditures  required at the investment  properties to adequately  maintain the
physical  assets and other operating needs of the Partnership and to comply with
Federal,  state  and local  legal and  regulatory  requirements.  The  Corporate
General  Partner  monitors  developments  in the  area of legal  and  regulatory
compliance and is studying new federal laws, including the Sarbanes-Oxley Act of
2002. The Sarbanes-Oxley Act of 2002 mandates or suggests additional  compliance
measures with regard to governance,  disclosure, audit and other areas. In light
of these changes,  the  Partnership  expects that it will incur higher  expenses
related  to  compliance,  including  increased  legal  and audit  fees.  Capital
improvements planned at each of the Partnership's properties are detailed below.

Essex Park Apartments

During  the  six  months  ended  June  30,  2003,  the   Partnership   completed
approximately  $116,000  of  capital  improvements  at  Essex  Park  Apartments,
consisting  primarily of building and structural  upgrades,  and floor covering,
appliance,  and water heater  replacements.  These improvements were funded from
operating cash flow. The Partnership  evaluates the capital improvement needs of
the property  during the year and  currently  expects to complete an  additional
$121,000 in capital  improvements  during the remainder of 2003.  The additional
capital  improvements  will  consist  primarily  of parking lot  upgrades,  pool
improvements,    appliances,   building   improvements,   and   floor   covering
replacements.  Additional capital improvements may be considered and will depend
on the physical  condition of the property as well as the anticipated  cash flow
generated by the property.

Colony House Apartments

During  the  six  months  ended  June  30,  2003,  the   Partnership   completed
approximately  $44,000  of  capital  improvements  at Colony  House  Apartments,
consisting  primarily of water heaters,  plumbing  upgrades,  and floor covering
replacements.  These  improvements  were funded from  operating  cash flow.  The
Partnership  evaluates the capital  improvement needs of the property during the
year and  currently  expects  to  complete  an  additional  $20,000  in  capital
improvements  during the remainder of 2003. The additional capital  improvements
will consist  primarily of floor covering  replacements,  appliances,  cabinets,
fencing,  and air conditioning  units.  Additional  capital  improvements may be
considered and will depend on the physical  condition of the property as well as
the anticipated cash flow generated by the property.

Willowick Apartments

During  the  six  months  ended  June  30,  2003,  the   Partnership   completed
approximately   $56,000  of  capital   improvements  at  Willowick   Apartments,
consisting  primarily  of  floor  covering  and  appliance  replacements.  These
improvements were funded from operating cash flow. The Partnership evaluates the
capital  improvement needs of the property during the year and currently expects
to complete an additional $17,000 in capital  improvements  during the remainder
of 2003. The additional  capital  improvements will consist primarily of parking
lot upgrades, structural enhancements,  appliances,  building improvements,  and
floor covering  replacements.  Additional capital improvements may be considered
and  will  depend  on the  physical  condition  of the  property  as well as the
anticipated cash flow generated by the property.

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

The  Partnership's  assets are thought to be sufficient  for any near term needs
(exclusive  of  capital   improvements)   of  the   Partnership.   The  mortgage
indebtedness  of  approximately  $12,868,000 is amortized over 240 months and is
scheduled to be fully amortized in January 2021.

The Partnership  distributed  the following  amounts during the six months ended
June 30, 2003 and 2002 (in thousands, except per unit data):
<TABLE>
<CAPTION>

                      Six Months      Per Limited       Six Months      Per Limited
                        Ended         Partnership         Ended         Partnership
                    June 30, 2003         Unit        June 30, 2002         Unit

<S>                      <C>              <C>             <C>              <C>
Operations               $ --             $ --            $ 108            $ 1.95
</TABLE>

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.  The  Partnership's  cash
available  for  distribution  is  reviewed on a monthly  basis.  There can be no
assurance,  however,  that the Partnership  will generate  sufficient funds from
operations,  after  planned  capital  improvement  expenditures,  to permit  any
distributions  to its  partners  during  the  remainder  of 2003  or  subsequent
periods.

Other

In addition to its indirect  ownership of the combined general partner interests
in the Partnership,  AIMCO and its affiliates  owned 35,663 limited  partnership
units (the "Units") in the  Partnership  representing  64.84% of the outstanding
Units at June 30, 2003. A number of these Units were acquired pursuant to tender
offers  made by  AIMCO  or its  affiliates.  It is  possible  that  AIMCO or its
affiliates will acquire  additional  Units in exchange for cash or a combination
of cash and Units in the operating  partnership of AIMCO either through  private
purchases or tender offers.  Pursuant to the Partnership Agreement,  unitholders
holding a majority of the Units are  entitled  to take action with  respect to a
variety of matters  that  include,  but are not  limited  to,  voting on certain
amendments  to the  Partnership  Agreement  and voting to remove  the  Corporate
General  Partner.  As a result of its  ownership  of  64.84% of the  outstanding
Units,  AIMCO and its  affiliates are in a position to influence all such voting
decisions  with  respect to the  Partnership.  Although  the  Corporate  General
Partner owes fiduciary duties to the limited  partners of the  Partnership,  the
Corporate  General  Partner  also  owes  fiduciary  duties  to AIMCO as its sole
stockholder.  As a result,  the  duties of the  Corporate  General  Partner,  as
corporate general partner,  to the Partnership and its limited partners may come
into conflict with the duties of the Corporate  General Partner to AIMCO, as its
sole stockholder.

Critical Accounting Policies and Estimates

The consolidated financial statements are prepared in accordance with accounting
principles generally accepted in the United States which require the Partnership
to  make  estimates  and  assumptions.  The  Partnership  believes  that  of its
significant  accounting  policies,  the following may involve a higher degree of
judgment and complexity.

Impairment of Long-Lived Assets

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

Real  property  investments  are  subject  to varying  degrees of risk.  Several
factors  may  adversely  affect  the  economic  performance  and  value  of  the
Partnership's  investment  properties.  These  factors  include  changes  in the
national,  regional and local economic  climate;  local  conditions,  such as an
oversupply  of  multifamily   properties;   competition   from  other  available
multifamily  property  owners and changes in market  rental  rates.  Any adverse
changes in these factors could cause an impairment in the Partnership's assets.

Revenue Recognition

The Partnership generally leases apartment units for twelve-month terms or less.
Rental income  attributable to leases is recognized  monthly as it is earned and
the Partnership  fully reserves all balances  outstanding  over thirty days. The
Partnership will offer rental concessions during  particularly slow months or in
response to heavy  competition  from other  similar  complexes in the area.  Any
concessions  given at the inception of the lease are amortized  over the life of
the lease.

ITEM 3.     CONTROLS AND PROCEDURES

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

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

                           PART II - OTHER INFORMATION


ITEM 1.     LEGAL PROCEEDINGS

In March 1998, several putative unit holders of limited partnership units of the
Partnership  commenced an action  entitled  Rosalie  Nuanes,  et al. v. Insignia
Financial Group, Inc., et al. (the "Nuanes action") in the Superior Court of the
State of  California  for the  County  of San  Mateo.  The  plaintiffs  named as
defendants,  among others,  the Partnership,  its Corporate  General Partner and
several of their  affiliated  partnerships  and corporate  entities.  The action
purported  to  assert  claims  on  behalf  of a class of  limited  partners  and
derivatively  on behalf  of a number  of  limited  partnerships  (including  the
Partnership)  that are named as nominal  defendants,  challenging,  among  other
things,  the  acquisition  of interests  in certain  Corporate  General  Partner
entities by Insignia Financial Group, Inc.  ("Insignia") and entities that were,
at one  time,  affiliates  of  Insignia;  past  tender  offers  by the  Insignia
affiliates to acquire limited partnership units;  management of the partnerships
by the  Insignia  affiliates;  and the series of  transactions  which  closed on
October 1, 1998 and February 26, 1999 whereby  Insignia and Insignia  Properties
Trust,  respectively,  were merged into AIMCO.  The plaintiffs  sought  monetary
damages and equitable relief, including judicial dissolution of the Partnership.
On June 25, 1998, the Corporate General Partner filed a motion seeking dismissal
of the action.  In lieu of responding  to the motion,  the  plaintiffs  filed an
amended complaint.  The Corporate General Partner filed demurrers to the amended
complaint, which were heard February 1999.

Pending the ruling on such  demurrers,  settlement  negotiations  commenced.  On
November 2, 1999,  the parties  executed and filed a Stipulation  of Settlement,
settling claims, subject to court approval, on behalf of the Partnership and all
limited partners who owned units as of November 3, 1999. Preliminary approval of
the  settlement  was obtained on November 3, 1999 from the Court,  at which time
the Court set a final  approval  hearing for  December  10,  1999.  Prior to the
December  10,  1999  hearing,  the  Court  received  various  objections  to the
settlement, including a challenge to the Court's preliminary approval based upon
the alleged lack of authority of prior lead counsel to enter the settlement.  On
December 14, 1999, the Corporate  General Partner and its affiliates  terminated
the  proposed  settlement.  In  February  2000,  counsel  for some of the  named
plaintiffs filed a motion to disqualify plaintiff's lead and liaison counsel who
negotiated  the  settlement.  On June  27,  2000,  the  Court  entered  an order
disqualifying  them  from the case and an  appeal  was  taken  from the order on
October 5, 2000. On December 4, 2000, the Court  appointed the law firm of Lieff
Cabraser  Heimann & Bernstein  LLP as new lead  counsel for  plaintiffs  and the
putative class.  Plaintiffs filed a third amended complaint on January 19, 2001.
On March 2, 2001,  the  Corporate  General  Partner and its  affiliates  filed a
demurrer to the third amended  complaint.  On May 14, 2001,  the Court heard the
demurrer to the third amended  complaint.  On July 10, 2001, the Court issued an
order  sustaining  defendants'  demurrer on certain  grounds.  On July 20, 2001,
Plaintiffs filed a motion for reconsideration of the Court's July 10, 2001 order
granting in part and denying in part defendants' demurrer. On September 7, 2001,
Plaintiffs  filed a fourth amended class and  derivative  action  complaint.  On
September 12, 2001, the Court denied Plaintiffs' motion for reconsideration.  On
October 5, 2001, the Corporate General Partner and affiliated defendants filed a
demurrer to the fourth amended complaint,  which was heard on December 11, 2001.
On February 2, 2002,  the Court served its order  granting in part the demurrer.
The Court dismissed without leave to amend certain of the plaintiffs' claims. On
February 11, 2002, plaintiffs filed a motion seeking to certify a putative class
comprised  of all  non-affiliated  persons  who own or have  owned  units in the
partnerships.  The Corporate General Partner and affiliated  defendants  opposed
the motion.  On April 29, 2002, the Court held a hearing on  plaintiffs'  motion
for class  certification  and took the matter  under  submission  after  further
briefing,  as ordered by the court,  was  submitted by the parties.  On July 10,
2002, the Court entered an order vacating the trial date of January 13, 2003 (as
well as the pre-trial and  discovery  cut-off  dates) and stayed the case in its
entirety  through November 7, 2002 so that the parties could have an opportunity
to discuss settlement. On October 30, 2002, the court entered an order extending
the stay in effect through January 10, 2003.

During the third  quarter of 2001, a complaint  (the "Heller  action") was filed
against  the same  defendants  that are named in the  Nuanes  action,  captioned
Heller v. Insignia Financial Group. On or about August 6, 2001, plaintiffs filed
a first  amended  complaint.  The  Heller  action  was  brought  as a  purported
derivative  action,  and  asserted  claims for,  among other  things,  breach of
fiduciary duty, unfair competition,  conversion, unjust enrichment, and judicial
dissolution.  Plaintiffs in the Nuanes action filed a motion to consolidate  the
Heller action with the Nuanes action and stated that the Heller action was filed
in order to preserve the derivative  claims that were dismissed without leave to
amend in the Nuanes action by the Court order dated July 10, 2001. On October 5,
2001, the Corporate  General Partner and affiliated  defendants  moved to strike
the first  amended  complaint in its entirety for violating the Court's July 10,
2001 order  granting  in part and  denying in part  defendants'  demurrer in the
Nuanes action,  or  alternatively,  to strike certain  portions of the complaint
based on the statute of limitations.  Other defendants in the action demurred to
the fourth amended complaint, and, alternatively, moved to strike the complaint.
On  December  11,  2001,  the court  heard  argument on the motions and took the
matters under  submission.  On February 4, 2002,  the Court served notice of its
order granting  defendants' motion to strike the Heller complaint as a violation
of its July 10,  2001  order in the  Nuanes  action.  On  March  27,  2002,  the
plaintiffs  filed a notice  appealing the order striking the  complaint.  Before
completing briefing on the appeal, the parties stayed further proceedings in the
appeal in light of a settlement.

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

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

On June 13, 2003, the Court granted final approval of the settlement and entered
judgment in both the Nuanes and Heller actions.

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


ITEM 6.     EXHIBITS AND REPORTS ON FORM 8-K

            a) Exhibits:

                    3    Amended  and  Restated  Certificate  and  Agreement  of
                         Limited  Partnership   (Exhibit  A  to  the  Prospectus
                         included   in   Registrant's   Amendment   No.   1   to
                         Registration  Statement,  filed September 2, 1981 (File
                         No. 2-72567), is incorporated herein by reference).

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

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

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

            b) Reports on Form 8-K filed during the quarter ended June 30, 2003:

                  None.


<PAGE>


                                   SIGNATURES



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



                                    SHELTER PROPERTIES III


                                    By:   Shelter Realty III Corporation
                                          Corporate General Partner


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


                                    By:   /s/Thomas C. Novosel
                                          Thomas C. Novosel
                                          Senior Vice President
                                          and Chief Accounting Officer


                                    Date: August 13, 2003


<PAGE>




Exhibit 31.1


                                  CERTIFICATION


I, Patrick J. Foye, certify that:


1.    I have reviewed this quarterly report on Form 10-QSB of Shelter Properties
      III;

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

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

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

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

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

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

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

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

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

Date:  August 13, 2003

                                    /s/Patrick J. Foye
                                    Patrick J. Foye
                                    Executive  Vice  President of Shelter Realty
                                    III  Corporation,  equivalent  of the  chief
                                    executive officer of the Partnership


<PAGE>



Exhibit 31.2


                                  CERTIFICATION


I, Paul J. McAuliffe, certify that:


1.    I have reviewed this quarterly report on Form 10-QSB of Shelter Properties
      III;

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

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

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

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

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

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

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

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

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

Date:  August 13, 2003

                                    /s/Paul J. McAuliffe
                                    Paul J. McAuliffe
                                    Executive Vice President and Chief Financial
                                    Officer of Shelter  Realty III  Corporation,
                                    equivalent of the chief financial officer of
                                    the Partnership


<PAGE>


Exhibit 32.1


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



In connection with the Quarterly Report on Form 10-QSB of Shelter Properties III
(the "Partnership"),  for the quarterly period ended June 30, 2003 as filed with
the  Securities  and  Exchange  Commission  on the date hereof  (the  "Report"),
Patrick  J.  Foye,  as the  equivalent  of the chief  executive  officer  of the
Partnership,  and Paul J.  McAuliffe,  as the equivalent of the chief  financial
officer of the Partnership, each hereby certifies, pursuant to 18 U.S.C. Section
1350,  as adopted  pursuant  to Section 906 of the  Sarbanes-Oxley  Act of 2002,
that, to the best of his knowledge:

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

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


                                           /s/Patrick J. Foye
                                    Name:  Patrick J. Foye
                                    Date:  August 13, 2003

                                           /s/Paul J. McAuliffe
                                    Name:  Paul J. McAuliffe
                                    Date:  August 13, 2003

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