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



                                    FORM 8-K


                                 CURRENT REPORT


                     Pursuant to Section 13 or 15(d) of the
                         Securities Exchange Act of 1934

          Date of Report (Date of earliest event reported): April 30, 2003

                         REAL ESTATE ASSOCIATES LIMITED III
               (Exact Name of Registrant as Specified in Its Charter)


               California                   0-10673               95-3547611
      (State or other jurisdiction        (Commission          (I.R.S. Employer
            of incorporation)             File Number)          Identification
                                                                    Number)


                                55 Beattie Place
                              Post Office Box 1089
                        Greenville, South Carolina 29602
                    (Address of principal executive offices)


         Registrant's telephone number, including area code (864) 239-1000


                                       N/A

                   (Former address, if changed since last report)











Item 5.     Other Events.

On April 29, 2003,  the Court  entered  judgment  against  National  Partnership
Investments Corp.  ("NAPICO"),  the corporate general partner of the Registrant,
and certain other  defendants in the previously  disclosed action entitled In Re
Real Estate  Associates  Limited  Partnership in the amount of $25.2 million for
violations of securities  laws and against NAPICO for $67.3 million for breaches
of fiduciary duty, both amounts plus prejudgment  interest of $25.6 million, and
for punitive  damages  against  NAPICO in the amount of $2.6 million.  Since the
amount of the judgment  substantially  exceeds NAPICO's net worth, NAPICO cannot
post a bond for the full amount of the judgment,  and NAPICO cannot predict what
actions  plaintiffs may attempt to take to satisfy the judgment.  While the case
is  expected  to be  appealed,  the matter is the  responsibility  of the former
shareholders  of  Casden  Properties   pursuant  to  documents  related  to  the
acquisition completed in March 2002.








                                    SIGNATURE



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 hereunto duly authorized.



                                    REAL ESTATE ASSOCIATES LIMITED III
                                    (a California limited partnership)


                                    By:   National Partnership Investments Corp.
                                          Corporate General Partner


                                    By:   /s/Brian H. Shuman
                                          Brian H. Shuman
                                          Senior Vice President and
                                          Chief Financial Officer


                                    Date: April 30, 2003