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): August 11, 2003

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


               California                   0-13810               95-3290316
      (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 August 11, 2003,  National  Partnership  Investments  Corp.  ("NAPICO"),  the
corporate  general  partner of the  Registrant,  entered into a  Stipulation  of
Settlement  (the  "Stipulation  of  Settlement")  with the plaintiff  class (the
"Plaintiffs")  and their counsel relating to the settlement of In Re Real Estate
Associates  Limited  Partnership   Litigation  (the  "REAL   Litigation").   The
Stipulation of Settlement  remains subject to the preliminary and final approval
of the  court  as  well  as the  approval  of the  Plaintiffs.  Pursuant  to the
Stipulation  of  Settlement,   within  two  days  after  receiving  the  court's
preliminary  approval of the proposed  settlement,  Alan I. Casden, on behalf of
himself, NAPICO and other defendants in the REAL Litigation,  is responsible for
depositing $29 million into an escrow account for the benefit of the Plaintiffs.
Upon final court approval,  approval by the Plaintiffs and the lapse of any time
to appeal the court approval of the settlement, the following shall occur:

      1.    Alan I. Casden, on behalf of himself, NAPICO and other defendants in
            the REAL  Litigation,  will transfer to an agent for the  Plaintiffs
            shares  of  common  stock  ("Class  A Common  Stock")  of  Apartment
            Investment  and  Management   Company  ("AIMCO")  owned  by  certain
            affiliates  of Alan I. Casden with an aggregate  market value of $19
            million,  subject to certain  transfer  restrictions,  or at Alan I.
            Casden's option, $19 million in cash.

      2.    NAPICO will issue an  aggregate of $35 million in  promissory  notes
            for the benefit of the  Plaintiffs.  An  aggregate  of $7 million of
            notes are to be repaid each year. The notes will bear interest based
            on applicable rates of U.S. Treasury bills with similar  maturities.
            The notes will be guaranteed by AIMCO Properties, L.P., an affiliate
            of AIMCO.

      3.    The parties to the Stipulation of Settlement will release each other
            and related parties from any and all claims associated with the REAL
            Litigation and the Plaintiffs'  investment in the Registrant and the
            other affiliated partnerships.

      4.    The $29 million in the escrow account  established by Alan I. Casden
            will be released to the Plaintiffs.

Pursuant to the Stipulation of Settlement, upon final approval of the settlement
by the court,  the parties shall jointly  request that a new judgment be entered
in the REAL  Litigation  that will,  among other  things,  expunge the  judgment
originally entered against NAPICO and the other defendants on April 29, 2003.

On August 12, 2003, in connection with the proposed  settlement  pursuant to the
Stipulation of Settlement, NAPICO and AIMCO executed a Settlement Agreement (the
"Settlement  Agreement") with the prior  shareholders of Casden  Properties Inc.
The principal terms of the Settlement Agreement include:

      1.    That NAPICO will voluntarily  discontinue the action it commenced on
            May 13, 2003 against the former  shareholders  of Casden  Properties
            Inc. and other  indemnitors  in AIMCO's  March 2002  acquisition  of
            Casden Properties Inc. (the "Casden Merger").

      2.    That Alan I.  Casden  and  certain  related  entities  will  resolve
            certain pending claims for indemnification made by NAPICO, AIMCO and
            their affiliates.  These claims include  indemnification  related to
            the REAL Litigation and certain other matters in connection with the
            Casden Merger.

     3.   AIMCO,  or an  affiliate,  will deposit $25 million of the $29 million
          that Alan I.  Casden is  responsible  for  depositing  into the escrow
          account for the benefit of the Plaintiffs pursuant to the terms of the
          Stipulation of Settlement.  In connection  with this deposit by AIMCO,
          The Casden  Company  will  transfer to AIMCO  531,915  shares of AIMCO
          Class A Common Stock owned by The Casden Company,  which shares are to
          be held in escrow by AIMCO until final approval of the  Stipulation of
          Settlement by the court and the Plaintiffs.  Upon such approval, AIMCO
          will become the owner of the 531,915 shares.  If final approval by the
          court and the Plaintiffs is not obtained, the $25 million deposited by
          AIMCO into the escrow account will be returned to AIMCO and AIMCO will
          return to The Casden Company the 531,915 shares.

     4.   The Casden  Company  will  promise to pay an  aggregate  amount of $35
          million on a secured,  nonrecourse basis to NAPICO. The Casden Company
          will  be  obligated  to  repay  an  aggregate  of $7  million  of  the
          obligation  each year.  The  obligation  to repay the $35 million will
          bear  the  same  interest  and  mature  on the  same  schedule  as the
          promissory  notes issued by NAPICO to the  plaintiffs  pursuant to the
          Stipulation  of  Settlement.  Payment  of  these  obligations  will be
          secured  by (i) a pledge of  744,681  shares  of AIMCO  Class A Common
          Stock  owned by Alan I.  Casden or an  affiliated  entity,  plus up to
          60,000 additional shares for accrued interest,  and (ii) cash proceeds
          of  recoveries  or  settlements  that  Alan  I.  Casden  or any of his
          affiliates,  or any of the former  shareholders  of Casden  Properties
          Inc.,  receive in  connection  with or related to the REAL  Litigation
          (collectively,  "Recoveries").  The payment obligations to NAPICO will
          be required to be prepaid with any Recoveries received. Payment may be
          made in cash or in  shares  of  AIMCO  Class A  Common  Stock,  except
          payments with respect to Recoveries must be made in cash.

                                    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 VII
                                    (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: August 13, 2003