UNITED STATES SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549
                       ----------------------------------


                                    FORM 10-Q


    X        QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                For the quarterly period ended November 30, 1996

                                       OR

             TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)

             For the transition period from           to          .


                       Commission File Number:    0-15036


              PAINE WEBBER  QUALIFIED PLAN PROPERTY FUND FOUR, LP
     (Exact name of registrant as specified in its charter)

               Delaware                                     04-2841746
(State or other jurisdiction of                            (I.R.S. Employer
incorporation or organization)                              Identification No.)


265 Franklin Street, Boston, Massachusetts                          02110
(Address of principal executive offices)                           (Zip Code)


Registrant's telephone number, including area code    (617) 439-8118


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed  by  Section  13 or 15 (d) of the  Securities  Exchange  Act of 1934
during the preceding 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 ____
                                     ----





<PAGE>

              PAINE WEBBER QUALIFIED PLAN PROPERTY FUND FOUR, LP

                                 Balance Sheets
                November 30, 1996 and August 31, 1996(Unaudited)
                                 (In thousands)


                                     Assets
                                                    November 30    August 31
                                                    -----------    ---------

Real estate investments:
   Investment properties held for sale, net           $12,100        $12,100
   Land                                                 1,115          1,115
   Mortgage loans, net                                  7,285          7,285
                                                      -------        -------
                                                       20,500         20,500

Cash and cash equivalents                               1,964          2,060
Interest receivable                                        60             60
Accounts receivable                                        61             14
Deferred expenses, net                                     94             99
Other assets                                              104             68
                                                      -------        -------
                                                      $22,783        $22,801
                                                      =======        =======

                        LIABILITIES AND PARTNERS' CAPITAL

Accounts payable - affiliates                         $    32        $    32
Accounts payable and accrued expenses                     186            201
Unearned rental income                                      -             26
Tenant security deposits                                   72             45
Partners' capital                                      22,493         22,497
                                                      -------        -------
                                                      $22,783        $22,801
                                                      =======        =======























                             See accompanying notes.


<PAGE>


               PAINE WEBBER QUALIFIED PLAN PROPERTY FUND FOUR, LP

                              STATEMENTS OF INCOME
        For the three months ended November 30, 1996 and 1995 (Unaudited)
                     (In thousands, except per Unit amounts)

                                                1996           1995
                                                ----           ----

Revenues:
   Interest from mortgage loans            $    179        $   338
   Land rent                                     27             99
   Other interest income                         25             38
                                           --------        -------
                                                231            475

Expenses:
   Management fees                               35             51
   General and administrative                    94             85
   Amortization of deferred expenses              5             25
                                           --------        -------
                                                134            161
                                           --------        -------

Operating income                                 97            314

Income from operations of investment
   properties held for sale, net                222            242

Gain on sale of land                              -          1,378
                                           --------        ------
Net income                                 $    319        $ 1,934
                                           ========        =======

Net income per Limited
  Partnership Unit                            $0.35           $2.13
                                              =====           =====

Cash distributions per Limited
  Partnership Unit                            $0.36           $0.56
                                              =====           =====

   The above net income and cash distributions per Limited  Partnership Unit are
based upon the  896,993  Units ($50 per Unit) of  Limited  Partnership  Interest
outstanding during each period.



<PAGE>



              STATEMENTS OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
        For the three months ended November 30, 1996 and 1995 (Unaudited)
                                 (In thousands)

                                                        General    Limited
                                                        Partners   Partners
                                                        --------   --------

Balance at August 31, 1995                              $   (18)   $29,265
Net income                                                   20      1,914
Cash distributions                                           (7)      (506)
                                                        -------    -------
Balance at November 30, 1995                            $    (5)   $30,673
                                                        =======    =======

Balance at August 31, 1996                              $    11    $22,486
Net income                                                    3        316
Cash distributions                                           (3)      (320)
                                                        -------    -------
Balance at November 30, 1996                            $    11    $22,482
                                                        =======    =======

                             See accompanying notes.


<PAGE>


               PAINE WEBBER QUALIFIED PLAN PROPERTY FUND FOUR, LP

                            STATEMENTS OF CASH FLOWS
        For the three months ended November 30, 1996 and 1995 (Unaudited)
                Increase (Decrease) in Cash and Cash Equivalents
                                 (In thousands)

                                                            1996        1995
                                                            ----        ----
Cash flows from operating activities:
  Net income                                             $    319     $ 1,934
  Adjustments to reconcile net income
     to net cash provided by operating activities:
   Gain on sale of land                                         -      (1,378)
   Amortization of deferred expenses                            5          25
   Changes in assets and liabilities:
     Interest receivable                                        -          58
     Accounts receivable                                      (47)         15
     Other assets                                             (36)         10
     Accounts payable and accrued expenses                    (15)         (6)
     Unearned rental income                                   (26)          -
     Other liabilities                                          -         (50)
     Tenant security deposits                                  27           -
                                                         --------     -------
        Total adjustments                                     (92)     (1,326)
                                                         --------     -------
        Net cash provided by operating activities             227         608
                                                         --------     -------

Cash flows from investing activities:
   Net proceeds from sale of land                               -       3,440
   Proceeds received from repayment of mortgage loan            -       6,188
                                                         --------     -------
        Net cash provided by investing activities               -       9,628
                                                         --------     -------

Cash flows from financing activities:
   Distributions to partners                                 (323)       (513)
                                                         --------     -------

Net (decrease) interest in cash and cash equivalents          (96)      9,723

Cash and cash equivalents, beginning of period              2,060       1,851
                                                         --------     -------

Cash and cash equivalents, end of period                 $  1,964     $11,574
                                                         ========     =======















                             See accompanying notes.


<PAGE>


              PAINE WEBBER QUALIFIED PLAN PROPERTY FUND FOUR, LP
                          Notes to Financial Statements
                                   (Unaudited)



1. General
   -------

   The accompanying  financial  statements,  footnotes and discussion  should be
   read in conjunction with the financial  statements and footnotes contained in
   the  Partnership's  Annual  Report for the year ended August 31, 1996. In the
   opinion of management, the accompanying financial statements,  which have not
   been audited, reflect all adjustments necessary to present fairly the results
   for the interim period.  All of the accounting  adjustments  reflected in the
   accompanying interim financial statements are of a normal recurring nature.

   The accompanying financial statements have been prepared on the accrual basis
   of accounting in accordance  with generally  accepted  accounting  principles
   which require  management to make estimates and  assumptions  that affect the
   reported  amounts of assets and  liabilities  and  disclosures  of contingent
   assets and  liabilities  as of  November  30,  1996 and  August 31,  1996 and
   revenues and expenses for the three months ended  November 30, 1996 and 1995.
   Actual results could differ from the estimates and assumptions used.

2. Mortgage Loan and Land Investments
   ----------------------------------

   The following are the first  mortgage loans  outstanding  and the cost of the
   related land to the  Partnership at November 30, 1996 and August 31, 1996 (in
   thousands):

                              Amount of Mortgage Loan         Cost of Land
                              -----------------------       ------------------
      Property                  11/30/96    8/31/96         11/30/96   8/31/96
      --------                  --------    -------         --------   -------

   Willow Creek Apartments
     Wichita, Kansas           $ 3,055       $ 3,055       $    345     $   345

   Park South Apartments
     Charlotte, North Carolina   4,230         4,230            770         770
                               -------       -------       --------     -------
                               $ 7,285       $ 7,285       $  1,115     $ 1,115
                               =======       =======       ========     =======

   In general,  the loans are secured by first mortgages on the properties,  the
   owner's  leasehold  interest  in the land  and an  assignment  of all  tenant
   leases. Interest is payable monthly and the principal is due at maturity. The
   interest  rates on the mortgage loans range from 9.0% to 11%. The land leases
   have terms of 40 years.  Among the  provisions of the lease  agreements,  the
   Partnership  is entitled to additional  rent based upon gross revenues of the
   underlying  properties  in excess of a base  amount,  as defined.  During the
   three months ended November 30, 1995,  the  Partnership  received  additional
   rent  under the  terms of the Park  South  Apartments  land  lease  totalling
   $22,000. During the three months ended November 30, 1996, the Partnership did
   not receive any additional  rent. The lessees have the option to purchase the
   land for specified  periods of time,  beginning  between February of 1995 and
   December of 1997, at a price based on fair market value, as defined,  but not
   less than the original cost to the Partnership. The Partnership's investments
   are  structured to share in the  appreciation  in the value of the underlying
   real  estate.  Accordingly,  upon either sale,  refinancing,  maturity of the
   mortgage  loan  or  exercise  of the  option  to  repurchase  the  land,  the
   Partnership  will  receive  a 40% to 50%  share of the  appreciation  above a
   specified base amount.

   The Willow Creek mortgage loan became prepayable in November 1995. Management
   believes that the potential for a near term  prepayment of this loan is high.
   As a result of these circumstances, based on an expected short-term maturity,
   the estimated fair value of the Willow Creek mortgage loan  approximated  its
   carrying  value as of November 30, 1996 since the estimated fair value of the
   collateral property exceeds the principal balance of the loan. The fair value
   of the Park South loan, which does not become prepayable until December 1997,
   has been estimated using discounted cash flow analysis and also  approximated
   the loan's carrying value as of November 30, 1996.

   The mortgage  loan  secured by The Corner at Seven  Corners  Shopping  Center
   became  prepayable  in February  1995.  On December  16,  1994,  the borrower
   notified  the  Partnership  of its intent to prepay the loan and exercise the
   option to purchase the land during 1995.  On November 22, 1995,  the borrower
   of The Corner at Seven Corners loan prepaid the Partnership's first leasehold
   mortgage loan and purchased the Partnership's interest in the underlying land
   for total consideration of $9,628,000.  The principal balance of the mortgage
   loan was  $6,188,000  plus  interest  accrued  through  November  22, 1995 of
   $43,000. The Partnership's cost basis in the land was $2,062,000. Pursuant to
   the ground lease, the Partnership  received  $1,378,000 in excess of its land
   investment  as its  share  of the  appreciation  in  value  of the  operating
   investment  property above a specified base amount.  Such amount was recorded
   as a gain in the  Partnership's  financial  statements  for the quarter ended
   November 30, 1995.  The net proceeds from this  prepayment  transaction  were
   distributed to the Limited Partners as part of a special distribution paid on
   January  31,  1996 in the  amount of  approximately  $9,598,000,  or $214 per
   original $1,000 investment.

3. Investment Properties Held for Sale
   -----------------------------------

   Martin Sunnyvale Research and Development Center
   ------------------------------------------------

      The Partnership foreclosed under the terms of the mortgage loan secured by
   the Martin  Sunnyvale  Research and Development  Center on July 12, 1991. The
   borrower had  defaulted on the payment  terms of the loan due to  significant
   lease turnover during 1991. The property contains 39,000 rentable square feet
   and is located in Sunnyvale,  California.  The combined carrying value of the
   original  land  and  loan  investments,   of  $5,100,000,   was  adjusted  to
   management's estimate of the fair value of the property as of the date of the
   foreclosure,  of $3,400,000,  and reclassified to investment  properties held
   for sale.  Subsequent to the date of the  foreclosure  and through August 31,
   1994, the  Partnership had recorded  provisions for possible  investment loss
   totalling  $900,000 to write down the carrying value of the Martin  Sunnyvale
   investment  property  to  $2,500,000  to reflect  additional  declines in its
   estimated  fair value,  net of selling  expenses.  During  fiscal 1996,  real
   estate  values for R&D office  properties  in Northern  California  recovered
   somewhat as a result of the  resurgence in the growth of the high  technology
   industries.  As a result of lower market vacancy levels and increasing rental
   rates,  the estimated fair value of the Martin  Sunnyvale  property  improved
   significantly  during  fiscal 1996 to an amount which  exceeds the cost basis
   established for the property in fiscal 1991 of $3,400,000.  Accordingly,  the
   Partnership  adjusted  the  valuation  account  with  respect  to the  Martin
   Sunnyvale  property and recognized a recovery of possible  investment loss of
   $900,000 in the fiscal  1996  income  statement.  The  carrying  value of the
   investment,   of  $3,400,000,  is  included  in  the  balance  of  investment
   properties  held for sale on the  accompanying  balance sheets as of November
   30, 1996 and August 31, 1996.

      During fiscal 1994,  the  Partnership  was notified by a California  state
   water agency of a potential  environmental problem at Martin Sunnyvale.  As a
   result of governmental  required testing,  management  learned that there has
   been a  contamination  of the  underground  soil and water at the  site.  The
   environmental  testing  was paid for by one of the  parties  identified  as a
   potential contaminator.  Management believes that this contamination occurred
   prior to the Partnership's initial mortgage loan and ground lease investments
   in the property,  which were made in 1985. The California  state water agency
   has issued a site cleanup order  identifying two companies which had occupied
   the  Martin  Sunnyvale  property  prior  to  the  Partnership's   investment.
   Management  has engaged  local counsel to monitor all legal actions to insure
   that the Partnership's rights are fully protected.  Management will seek full
   indemnification from the parties identified as being potentially responsible.

   Bell Forge Square Shopping Center
   ---------------------------------

      On October 4, 1991, the Partnership received a deed in lieu of foreclosure
   on the mortgage loan secured by the Bell Forge Square  Shopping  Center.  The
   property,  which was 90% occupied as of November  30,  1996,  is comprised of
   126,890  leasable  square feet and is located in  Nashville,  Tennessee.  The
   Managing  General  Partner  estimated  that the fair value of the  investment
   property,  net of  selling  expenses,  at the  date  title  to the  mortgaged
   property was transferred was approximately  equal to the combined cost of the
   land and the face amount of the  Partnership's  mortgage  loan.  The combined
   value of the land and the face amount of the mortgage  loan,  of  $9,000,000,
   was reclassified to investment  properties held for sale. During fiscal 1992,
   the  Partnership  had recorded a provision  for possible  investment  loss of
   $600,000 to write down the carrying value of the Bell Forge Square investment
   property to reflect a decline in its  estimated  fair  value,  net of selling
   expenses, as of August 31, 1992. During fiscal 1993, the Partnership recorded
   an  adjustment  to reduce the  valuation  allowance by $300,000 to reflect an
   increase in the estimated fair value of the Bell Forge Square  property as of
   August 31, 1993.  The resulting net carrying  value of $8,700,000 is included
   in the balance of  investment  properties  held for sale on the  accompanying
   balance sheet at November 30, 1996 and August 31, 1996.
<PAGE>
      The Partnership  recognizes income from the investment properties held for
   sale equal to its share of the excess of the properties'  gross revenues over
   property operating expenses (including capital improvement costs),  taxes and
   insurance.  Combined  summarized  operating  results of the Martin  Sunnyvale
   Research and Development Center and Bell Forge Square Shopping Center for the
   quarters ended November 30, 1996 and 1995 are as follows (in thousands):

                                            1996           1995
                                            ----           ----

   Revenues:
     Rental income                       $   385        $   360
     Other income                             89             58
                                         -------        -------
                                             474            418
   Expenses:
     Property operating expenses             212            127
     Property taxes and insurance             40             49
                                        ---------      --------
                                             252            176
                                        --------       --------

   Income from operations, net          $    222       $    242
                                        ========       ========

   Property  operating expenses for the three months ended November 30, 1996 and
   1995 include capital improvement costs of $154,000 and $80,000, respectively.

4. Related Party Transactions
   --------------------------

   The  Adviser  earned  basic  management  fees of $35,000  and $51,000 for the
   three-month periods ended November 30, 1996 and 1995, respectively.  Accounts
   payable - affiliates  at both  November 30, 1996 and August 31, 1996 consists
   of management fees of $32,000 payable to the Adviser.

   Included in general and  administrative  expenses  for the three months ended
   November 30, 1996 and 1995 is $47,000 and $43,000, respectively, representing
   reimbursements  to an affiliate of the Managing General Partner for providing
   certain  financial,  accounting  and investor  communication  services to the
   Partnership.

   Also  included in general and  administrative  expenses  for the three months
   ended  November  30,  1996  and  1995 is  $3,000  and  $5,000,  respectively,
   representing  fees earned by an affiliate,  Mitchell  Hutchins  Institutional
   Investors, Inc., for managing the Partnership's cash assets.

5. Contingencies
   --------------

   As discussed in more detail in the Annual Report, the Partnership is involved
   in certain legal actions.  At the present time, the Managing  General Partner
   is  unable  to  estimate  the  impact,  if  any,  of  these  matters  on  the
   Partnership's financial statements, taken as a whole.



<PAGE>



              PAINE WEBBER QUALIFIED PLAN PROPERTY FUND FOUR, LP

                      MANAGEMENT'S DISCUSSION AND ANALYSIS
               OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Liquidity and Capital Resources

      The  Partnership's  wholly-owned,  39,000  square  foot  Martin  Sunnyvale
Research and  Development  Center  remained 100% leased as of November 30, 1996.
During the current  quarter,  the  largest  tenant at Martin  Sunnyvale  vacated
17,784  square feet when its lease  expired at the  beginning of November  1996.
However,  a replacement  tenant has executed a five-year lease through  November
2001 for the entire 17,784 square foot space at an average  rental rate which is
40% higher than the previous tenant had been paying. This transaction  completed
the successful re-leasing of the three tenant spaces at the property.  The other
two spaces were re-leased  during fiscal 1996 at rental rates 40% and 60% higher
than the  previous  leases.  As a result of the  significant  increase in rental
income,  the  market  value  of the  Martin  Sunnyvale  property  has  increased
substantially.  Accordingly, management believes that it would be appropriate to
begin to market the property for sale. Such marketing  efforts will begin in the
second quarter of fiscal 1997.

      As previously reported, the Partnership was notified by a California state
water  agency in fiscal  1994 of a  potential  environmental  problem  at Martin
Sunnyvale. As a result of governmental required testing, management learned that
there has been a contamination  of the  underground  soil and water at the site.
The state water agency has issued a final report  identifying  two tenants which
had occupied the  property  prior to 1985 and may have caused the  environmental
problem. Both prior tenants are Fortune 500 companies and both have been ordered
at their own expense to perform the necessary testing, cleanup and documentation
as required  by the  California  state water  agency.  The  Partnership  will be
required to monitor the efforts of these two firms.  The  environmental  testing
was paid  for by one of the  parties  identified  as a  potential  contaminator.
Management has engaged local counsel to monitor all legal actions to insure that
the Partnership's rights are fully protected. In addition,  management will seek
full  indemnification  from the parties  identified as being  responsible.  This
matter is not expected to have any  long-term  impact on the market value of the
Partnership's operating property.

      At the Partnership's other wholly-owned commercial investment,  Bell Forge
Square  Shopping  Center  in  Nashville,  Tennessee,  occupancy  stood at 90% at
November  30, 1996,  as compared to 100% at August 31, 1996.  During the current
quarter,  two tenants,  a furniture store and a pet store,  occupying 10% of the
center's  rentable area,  vacated their spaces prior to the termination of their
leases.  The  former  furniture  store  tenant  remains  current  on its  rental
obligations  to date  although it seeks to terminate  its lease as soon as a new
tenant  can be found.  The former pet store  tenant  has ceased  operations  and
stopped paying rent. The  Partnership  has commenced legal action to enforce the
lease  obligation.  The property's  leasing team has begun marketing this vacant
space to prospective tenants. As previously  reported,  although Discovery Zone,
which  occupies 9% of the center's net rentable  area,  has filed for protection
under  Chapter  11 of  the  U.S.  Bankruptcy  Code,  it  continues  to  pay  its
post-petition  rent and operate its store at Bell Forge Square.  While there are
likely  to  be  some  store  closings  as  part  of  the  company's   bankruptcy
reorganization  plan, it is uncertain at this time whether the Bell Forge Square
location  would be affected by such actions.  At the present  time,  real estate
values  for retail  shopping  centers in  certain  markets  are being  adversely
impacted  by the  effects  of  certain  consolidations  and  bankruptcies  among
retailers  which have resulted in an oversupply of space and the generally  flat
rate of growth in overall  retail  sales.  To date,  the  operations of the Bell
Forge Square  property have not been affected by this general trend.  During the
quarter  ended  November  30,  1996,  management  decided to  explore  potential
opportunities to sell the Bell Forge Square property.  Formal marketing  efforts
are expected to begin by the end of the second fiscal quarter.

      The mortgage loan secured by the Willow Creek Apartments bears interest at
a rate of 11.00%  per  annum.  As  previously  reported,  since  current  market
interest rates for first mortgage loans are  considerably  lower than this rate,
and with the continued  availability  of credit in the capital  markets for real
estate  transactions,   the  likelihood  of  the  Partnership's   mortgage  loan
investment  being  prepaid  has been high  since the time that the terms of such
mortgage loan allowed for prepayment. The Willow Creek loan became prepayable in
November 1995. However,  the Willow Creek loan includes a prepayment premium for
any prepayment between November 1995 and October 2000 at rates between 5% and 1%
of the mortgage loan balance.  To date, the  Partnership  has received no notice
from the Willow Creek borrower  indicating an intent to prepay the mortgage loan
and repurchase the underlying land. The average  occupancy level at Willow Creek
for the  quarter  ended  November  30,  1996 was  98%.  Recent  improvements  in
occupancy  at the  Willow  Creek  Apartments  are the  result  of an  aggressive
marketing  program that has included the use of lower rental rates,  concessions
and shorter than one-year  lease terms.  The owner's  property  management  team
expects to implement rental rate increases in the second quarter of fiscal 1997.

     Occupancy at the Park South  Apartments in Charlotte,  North Carolina,  was
92% for the quarter ended November 30, 1996. Operations of the property continue
to  fully  support  the debt  service  and  ground  lease  payments  owed to the
Partnership  despite  a recent  weakening  in  market  conditions  for  existing
properties in the greater  Charlotte  area.  Over the past year, more than 3,900
new  apartment  units  have  been  added  to  the  overall   Charlotte   market.
Approximately  1,500 of these new units are in southeast  Charlotte,  where Park
South is located,  and 708 of these new units are in Park South's submarket.  In
addition,  a new rental community is under construction  within one mile of Park
South which will include 400 rental units,  a retail center and a movie theater.
This  property's  pre-leasing  program began in late August.  In order to remain
competitive  with these new units,  Park South  currently  offers reduced rental
rates and/or discounted move-in rates to prospective tenants. As an incentive to
renew leases, current tenants are offered minimal increases at the expiration of
their leases.  The use of rental  concessions and renewal incentives is expected
to continue throughout fiscal 1997.

      At  November  30,  1996,  the  Partnership  had  available  cash  and cash
equivalents of $1,964,000.  Such cash and cash  equivalents will be used for the
working capital needs of the Partnership,  distributions to the partners and, if
necessary,  for  tenant  improvement  expenses  and other  leasing  costs of the
Partnership's wholly-owned investment properties. The source of future liquidity
and  distributions to the partners is expected to be through cash generated from
the Partnership's  real estate and mortgage loan  investments,  the repayment of
the  mortgage  loans  receivable  and the future  sales or  refinancings  of the
underlying  land and the  investment  properties.  Such sources of liquidity are
expected to be adequate to meet the Partnership's needs on both a short-term and
long-term basis.

Results of Operations
Three Months ended November 30, 1996
------------------------------------

      The Partnership reported net income of $319,000 for the three months ended
November 30, 1996, as compared to net income of  $1,934,000  for the same period
in the prior year. The decrease in net income is primarily  attributable  to the
gain  recognized  in the prior period on the sale of The Corner at Seven Corners
land, of $1,378,000.  In addition, the Partnership's net income decreased due to
a decrease in operating income of $217,000. Operating income decreased primarily
due to a decrease in revenues of $244,000. Revenues decreased due to declines in
interest earned on mortgage loans of $159,000,  land rent revenue of $72,000 and
other  interest  income of $13,000.  Interest  earned on mortgage loans and land
rent  revenue  decreased  as a result of The  Corner at Seven  Corners  mortgage
repayment and related land sale which occurred  during the prior year.  Interest
income  decreased  due to the  inclusion of The Corner at Seven  Corners'  sales
proceeds in the invested cash  balances in the prior period  pending the special
distribution  to the Limited  Partners  which was made on January 31, 1996.  The
decrease in revenues was partially  offset by a reduction in management  fees of
$16,000  and  a  decline  in  amortization  of  deferred  expenses  of  $20,000.
Management fees decreased due to a reduction in adjusted capital  contributions,
upon which such fees are based,  as a result of the capital  distribution  which
followed the sale of the The Corner at Seven Corners investment. Amortization of
deferred  expenses  decreased  due to the  write-off of the  remaining  deferred
acquisition  expenses associated with The Corner at Seven Corners investments at
the time of the sale.

    A decrease of $20,000 in income  from  investment  properties  held for sale
also contributed to the decline in net income in the current period. Income from
investment  properties held for sale decreased primarily due to a decline in net
operating income at Martin  Sunnyvale of $27,000.  Net operating income declined
at Martin Sunnyvale due to a temporary  decrease in rental income as a result of
the tenant turnover during November, as discussed further above, and an increase
in capital improvement expenditures.


<PAGE>


                                     PART II
                                Other Information

Item 1. Legal Proceedings
-------------------------

      In November  1994,  a series of  purported  class  actions  (the "New York
Limited Partnership Actions") were filed in the United States District Court for
the Southern District of New York concerning PaineWebber Incorporated's sale and
sponsorship of various limited partnership investments,  including those offered
by the Partnership.  The lawsuits were brought against PaineWebber  Incorporated
and Paine Webber Group Inc. (together "PaineWebber"), among others, by allegedly
dissatisfied  partnership  investors.  In March  1995,  after the  actions  were
consolidated under the title In re PaineWebber Limited  Partnership  Litigation,
the  plaintiffs  amended their  complaint to assert claims  against a variety of
other  defendants,  including Fourth Qualified  Properties,  Inc. and Properties
Associates  ("PA"),  which  are the  General  Partners  of the  Partnership  and
affiliates of  PaineWebber.  On May 30, 1995, the court  certified  class action
treatment of the claims asserted in the litigation.

      The amended complaint in the New York Limited  Partnership Actions alleged
that, in connection  with the sale of interests in Paine Webber  Qualified  Plan
Property Fund Four, LP, PaineWebber,  Fourth Qualified  Properties,  Inc. and PA
(1) failed to provide adequate disclosure of the risks involved;  (2) made false
and  misleading  representations  about the  safety of the  investments  and the
Partnership's  anticipated  performance;  and (3)  marketed the  Partnership  to
investors for whom such  investments  were not  suitable.  The  plaintiffs,  who
purported  to be suing on behalf of all  persons who  invested  in Paine  Webber
Qualified  Plan Property Fund Four,  LP, also alleged that following the sale of
the partnership interests, PaineWebber, Fourth Qualified Properties, Inc. and PA
misrepresented   financial   information  about  the  Partnership's   value  and
performance.  The amended complaint  alleged that PaineWebber,  Fourth Qualified
Properties,   Inc.  and  PA  violated  the  Racketeer   Influenced  and  Corrupt
Organizations  Act  ("RICO") and the federal  securities  laws.  The  plaintiffs
sought  unspecified  damages,  including  reimbursement for all sums invested by
them in the  partnerships,  as well as disgorgement of all fees and other income
derived  by  PaineWebber  from  the  limited  partnerships.   In  addition,  the
plaintiffs also sought treble damages under RICO.

     In January 1996,  PaineWebber signed a memorandum of understanding with the
plaintiffs in the New York Limited Partnership Actions outlining the terms under
which the parties have agreed to settle the case. Pursuant to that memorandum of
understanding,  PaineWebber  irrevocably  deposited  $125 million into an escrow
fund under the  supervision of the United States District Court for the Southern
District of New York to be used to resolve the  litigation in accordance  with a
definitive  settlement  agreement  and plan of  allocation.  On July  17,  1996,
PaineWebber and the class plaintiffs submitted a definitive settlement agreement
which has been preliminarily approved by the court and provides for the complete
resolution of the class action  litigation,  including  releases in favor of the
Partnership  and the General  Partners,  and the  allocation of the $125 million
settlement  fund among  investors  in the various  partnerships  at issue in the
case.  As part of the  settlement,  PaineWebber  also  agreed to  provide  class
members with certain financial  guarantees relating to some of the partnerships.
The details of the settlement are described in a notice mailed directly to class
members at the  direction of the court.  A final  hearing on the fairness of the
proposed  settlement  was held in December  1996, and a ruling by the court as a
result of this final hearing is currently pending.

      In February 1996,  approximately  150 plaintiffs  filed an action entitled
Abbate v.  PaineWebber  Inc. in  Sacramento,  California  Superior Court against
PaineWebber   Incorporated  and  various  affiliated   entities  concerning  the
plaintiffs' purchases of various limited partnership interests,  including those
offered by the  Partnership.  The complaint  alleged,  among other things,  that
PaineWebber and its related entities committed fraud and  misrepresentation  and
breached  fiduciary  duties  allegedly  owed to the  plaintiffs  by  selling  or
promoting  limited   partnership   investments  that  were  unsuitable  for  the
plaintiffs and by overstating the benefits,  understating  the risks and failing
to state  material  facts  concerning  the  investments.  The  complaint  sought
compensatory  damages of $15 million plus punitive damages against  PaineWebber.
Mediation  with  respect to the Abbate  action was held in December  1996.  As a
result of such mediation,  a tentative  settlement  between  PaineWebber and the
plaintiffs  was reached  which would  provide for  complete  resolution  of such
action. PaineWebber anticipates that releases and dismissals with regard to this
action will be received by February 1997.

      Under certain limited circumstances, pursuant to the Partnership Agreement
and other contractual  obligations,  PaineWebber affiliates could be entitled to
indemnification  for expenses and  liabilities in connection with the litigation
described above. However, PaineWebber has agreed not to seek indemnification for
any amounts it is required to pay in connection  with the  settlement of the New
York Limited  Partnership  Actions.  At the present time,  the General  Partners
cannot estimate the impact, if any, of the potential  indemnification  claims on
the  Partnership's  financial  statements,  taken  as a whole.  Accordingly,  no
provision  for any  liability  which could result from the  eventual  outcome of
these  matters has been made in the  accompanying  financial  statements  of the
Partnership.

Items 2 through 5:            NONE

Item 6. Exhibits and Reports on Form 8-K

(a)  Exhibits:                NONE

(b)  Reports on Form 8-K:     NONE





<PAGE>





              PAINE WEBBER QUALIFIED PLAN PROPERTY FUND FOUR, LP




                                   SIGNATURES


Pursuant  to the  requirements  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.

                              PAINE WEBBER QUALIFIED PLAN PROPERTY
                                         FUND FOUR, LP


                              By:  FOURTH QUALIFIED PROPERTIES, INC.
                                       Managing General Partner



                              By: /s/ Walter V. Arnold
                                  --------------------
                                  Walter V. Arnold
                                  Senior Vice President and Chief
                                  Financial Officer




Dated:  January 13, 1997