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) July 5, 2005

                          NATIONAL PROPERTY INVESTORS III
               (Exact name of Registrant as specified in its charter)


            California                0-9567                  13-2974428
      (State or other jurisdiction  (Commission            (I.R.S. Employer
         of incorporation or        File Number)        Identification Number)
           organization)
                                55 Beattie Place
                              Post Office Box 1089
                        Greenville, South Carolina 29602
                    (Address of principal executive offices)


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

Check  the  appropriate  box  below  if the  Form  8-K  filing  is  intended  to
simultaneously satisfy the filing obligations of the registrant under any of the
following provisions:

[ ]   Written communications pursuant to Rule 425 under the Securities Act (17
      CFR 230.425)

[ ]   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
      240.14a-12)

[ ]   Pre-commencement communications pursuant to Rule 14d-2(b) under the
      Exchange Act (17 CFR 240.14d-2(b))

[ ]   Pre-commencement communications pursuant to Rule 13e-4(c) under the
      Exchange Act (17 CFR 240.13e-4(c))









Item 1.02   Termination of a Material Definitive Agreement.

National  Property  Investors  III (the  "Registrant")  owns a 99%  interest  in
National Pinetree Limited Partnership, a North Carolina limited partnership (the
"Partnership").  The Partnership owns Pinetree Apartments,  a 220-unit apartment
complex located in Charlotte, North Carolina ("Pinetree").  On May 19, 2005, the
Partnership,   and  eight  other  partnerships  that  own  apartment   complexes
containing 1,666 units, collectively (the "Selling Partnerships"),  entered into
a Purchase and Sale  Contract  (the  "Purchase  Agreement")  with a third party,
Juniper Investment Group, Ltd, a Texas limited  partnership (the "Purchaser") to
sell the nine apartment complexes owned by the Partnerships to the Purchaser for
a total sales price of  $62,300,000,  of which  $5,800,000  represents the sales
price for Pinetree.  Each of the Selling  Partnerships  is affiliated with AIMCO
Properties,   L.P.,  an  affiliate  of  the  managing  general  partner  of  the
Partnership ("AIMCO Properties").

On July 5, 2005,  the Purchaser  terminated the Purchase  Agreement.  On July 7,
2005,  the  Selling  Partnerships  and the  Purchaser  entered  into the  Second
Amendment to the Purchase and Sale Contract, which had the effect of reinstating
the Purchase Agreement. There were no material changes to the Purchase Agreement
as described in the Registrant's Current Report on Form 8-K dated May 19, 2005.








                                    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.



                                NATIONAL PROPERTY INVESTORS III
                                (a California Limited Partnership)


                                By: NPI Equity Investments, Inc.
                                    Managing General Partner


                                By: /s/Martha L. Long
                                    Martha L. Long
                                    Senior Vice President


                                Date: July 11, 2005