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

                                    Form 10-Q

                   QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934


                       For Quarter Ended December 31, 1996 

                          Commission File Number 1-8893


                  ROYAL PALM BEACH COLONY, LIMITED PARTNERSHIP
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)


          DELAWARE                                      59-2501059
---------------------------------        ---------------------------------------
(State of other jurisdiction             (I.R.S. Employer Identification Number)
of incorporation or organization)



     2501 S. Ocean Drive
     Hollywood, Florida                                           33019
----------------------------------------                        ----------
(Address of principal executive offices)                        (Zip Code)


Registrant's telephone number, including area code (954) 927-3080

                                      NONE
--------------------------------------------------------------------------------
Former name, former address and former fiscal year, if changed since last report


Indicate by checkmark  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  [   ]

Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date.

           CLASS                       Outstanding at December 31, 1996
           -----                       --------------------------------
Limited Partnership Units                      4,485,504 units
<PAGE>
                  ROYAL PALM BEACH COLONY, LIMITED PARTNERSHIP








                                     INDEX


PART I.   Financial Information

                Balance sheets -
                     December 31, 1996 and
                     September 30, 1996

               Statements of operations -
                     Three months ended
                     December 31, 1996 and 1995

               Statements of cash flows -
                     Three months ended
               December 31, 1996 and 1995

               Notes to financial statements

               Management's discussion and analysis
                     of financial condition and results
                     of operations

PART II.  Other information and signatures
<PAGE>
<TABLE>
<CAPTION>
                  ROYAL PALM BEACH COLONY, LIMITED PARTNERSHIP
                                 BALANCE SHEETS



                                                      December 31,   September 30,
                                                          1996           1996 
                                                      ----------      ----------
                                                      (unaudited)
           ASSETS
<S>                                                   <C>             <C>
Cash                                                  $   41,785      $   41,451
Other receivables:                                       131,518         133,318
Property held for sale                                 5,340,657       5,249,988
Other assets                                              44,306          61,377
                                                      ----------      ----------
                                                      $5,558,266      $5,486,134
                                                      ==========      ==========


           LIABILITIES AND EQUITY


Liabilities:
  Mortgage payable, bank                              $1,344,638      $1,212,412
  Mortgage payable, general partner                      527,249         527,249
  Mortgage payable, related party                        325,000         325,000
  Accounts payable and accrued
    liabilities                                          948,501       1,037,440
  Estimated cost of development
    of land and property sold                             14,142          14,142


Equity:
  Partners' equity, 4,485,504 units
    outstanding                                        2,398,736       2,369,891
                                                      ----------      ----------
                                                      $5,558,266      $5,486,134
                                                      ==========      ==========



                        See notes to financial statements 

<PAGE>
<CAPTION>

                  ROYAL PALM BEACH COLONY, LIMITED PARTNERSHIP
                            STATEMENTS OF OPERATIONS
                               THREE MONTHS ENDED
                             DECEMBER 31, 1996 AND 1995
                                   (UNAUDITED)


                                                     1996               1995    
                                                 -----------        -----------


<S>                                              <C>                <C>
Revenues                                         $   320,619        $   144,044
                                                 -----------        -----------

Cost and expenses:

  Cost of land sold                                  118,483            106,210
  Selling, general and
    administrative expenses                          118,474            146,000
  Interest                                            23,121             15,618
  Terminated merger costs                               --               65,720
  Depreciation and property taxes                     31,696             41,896
                                                 -----------        -----------
      Total costs and expenses                       291,774            375,444
                                                 -----------        -----------

Net income (loss)                                $    28,845        $  (231,400)
                                                 ===========        ===========

Net income (loss) per unit                       $      0.01        $     (0.05)
                                                 ===========        ===========

Weighted average number of
  units outstanding                                4,485,504          4,485,504
                                                 ===========        ===========

                        See notes to financial statements 
<PAGE>
<CAPTION>
                  ROYAL PALM BEACH COLONY, LIMITED PARTNERSHIP
                            STATEMENTS OF CASH FLOWS
                  THREE MONTHS ENDED DECEMBER 31, 1996 AND 1995 
                                   (UNAUDITED)


                                                  1996                   1995
                                               ----------             ----------
<S>                                            <C>                    <C>
Cash flows from operating activities:

  Cash was received from:
    Collections on sales
     and receivables                           $ 320,440              $ 372,292
    Interest income                                  179                  5,888
    Other                                           --                      300
                                               ---------              ---------
                                                 320,619                378,480
                                               ---------              ---------

  Cash was expended for:
    Selling, administrative and
      property taxes                             183,348                213,461
    Interest paid (net of amounts
      capitalized)                                 2,048                  1,915
    Improvements to property                     267,115                240,982
                                               ---------              ---------
                                                 452,511                456,358
                                               ---------              ---------

Net cash used in operating activities           (131,892)               (77,878)
                                               ---------              ---------
Cash flows from financing activities:
    Net borrowings from mortgage note
      payable, bank                              132,226                 48,131
                                               ---------              ---------

Net increase (decrease) in cash                      334                (29,747)

Cash, beginning of period                         41,451                 83,902
                                               ---------              ---------

Cash, end of period                            $  41,785              $  54,155
                                               ---------              ---------

                        See notes to financial statements 

<PAGE>
<CAPTION>
                  ROYAL PALM BEACH COLONY, LIMITED PARTNERSHIP
                            STATEMENTS OF CASH FLOWS
                     RECONCILIATION OF NET LOSS TO NET CASH
                     PROVIDED (USED) BY OPERATING ACTIVITIES
                  THREE MONTHS ENDED DECEMBER 31, 1996 AND 1995
                                   (UNAUDITED)

                                                       1996              1995
                                                    ---------         ---------
<S>                                                 <C>               <C>
Reconciliation of net income (loss)
  to net cash used in operating
  activities:

Net income (loss)                                   $  28,845         $(231,400)
                                                    ---------         ---------
Adjustments to reconcile net
  income (loss) to net cash  used
  in operating activities:

     Depreciation and amortization                        688             1,025


  Change in assets and
    liabilities:

     Increase in:
       Property held for sale                         (90,669)         (149,866)
       Accounts payable and accrued
         liabilities                                     --              15,525
       Estimated costs of
         development of land
         and property sold                               --              27,482

     Decrease in:
       Mortgage notes and other
         receivables                                    1,800           238,986
     Other assets                                      16,383            20,370
     Accounts payable and
       accrued liabilities                            (88,939)             --
                                                    ---------         ---------
Total adjustments                                    (160,737)          153,522


Net cash flow used in
  operating activities                              $(131,892)        $ (77,878)
                                      

                       See notes to financial statements. 
</TABLE>
<PAGE>
                  ROYAL PALM BEACH COLONY, LIMITED PARTNERSHIP
                         NOTES TO FINANCIAL STATEMENTS
                               THREE MONTHS ENDED
                           DECEMBER 31, 1996 AND 1995
                                  (UNAUDITED)




1.        Interim financial statements:

            The accompanying  unaudited financial  statements have been prepared
in accordance  with the  instructions to Form 10-Q and do not include all of the
information and footnotes required by generally accepted  accounting  principles
for complete financial statements. In the opinion of management, all adjustments
(consisting  of  normal  recurring  accruals)  considered  necessary  for a fair
presentation  have been included.  Operating  results for the three months ended
December  31, 1996 are not  necessarily  indicative  of the results  that may be
expected for the fiscal year ending September 30, 1997. These statements  should
be read in conjunction with the financial  statements and notes thereto included
in the Company's  Annual Report on Form 10-K for the fiscal year ended September
30, 1996.

2.        Income tax:

            The  Partnership  has made no provision for income taxes since it is
not subject to income  taxes.  Instead,  the partners are required to include in
their  income tax returns  their share of the  Partnership's  taxable  income or
loss.
<PAGE>
                  ROYAL PALM BEACH COLONY, LIMITED PARTNERSHIP
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                               THREE MONTHS ENDED
                           December 31, 1996 AND 1995
                                   (UNAUDITED)


Results of Operations

         During the three months ended  December 31, 1996, the  Partnership  had
revenues  totaling  $320,619.  Of  the  foregoing,  approximately  $100,000  was
realized in October, 1996 on the sale to the County of Palm Beach of 18 one-acre
lots out of a 206 acre tract owned by the Partnership in Palm Beach County. (The
County also  purchased  16  additional  lots for  $84,000 in January,  1997.) In
addition,  the  Partnership  sold the  balance  of the its  undeveloped  land in
Hernando County to the State of Florida for gross proceeds of $125,000 and three
residential lots for gross proceeds of $90,000.

         Revenues for the three months ended  December 31, 1995,  were $144,044,
which  include  the net  proceeds  of  $140,000  received  upon the sale of four
residential  lots,  offset in part by by  approximately  $65,000  of  terminated
merger expense.  During the quarter ended December 31, 1995 the Partnership also
received $168,962 in satisfaction of a mortgage note receivable.

         As a result of the foregoing,  the Partnership's  cash balances,  which
had declined to $41,000 at September 30, 1996 remained at approximately the same
level at December 31, 1996.

Liquidity and Capital Resources

         The  Partnership  is obligated  to repay a working  capital loan in the
amount of $527,000 due to Hasam Realty Limited Partnership, a general partner of
the Partnership,  on February 28, 1997. In addition, the Partnership obtained an
additional  working  capital loan in the amount of $300,000 from an affiliate of
Jack  Friedland  and $25,000  from Mr.  Friedland  directly.  Mr.  Friedland  is
affiliated  with Hasam  Realty  Limited  Partnership,  a general  partner of the
Partnership.  The maturity date of the loan,  originally  October 31, 1996,  has
been extended through February 28, 1997.

         The  Partnership's  future revenues will depend solely upon its ability
to develop and sell its  remaining  real estate,  and upon receipts from a prior
sale of a utility plant. The Partnership's properties are described in Item 2 of
its report on Form 10-K for the year ended September 30, 1996 (the "Incorporated
1996 10K"). An extract from the Incorporated  1996 10K containing Item 2 thereof
is annexed to this report as an Exhibit and is incorporated herein by reference.

         As  described  in of the  Incorporated  1996 10K,  the  Partnership  is
committed to the continuing  development of phases II and III of the "Crestwood"
residential tract as the most efficacious manner in which to enhance liquidation
values. The Partnership  intends to finance on-site  development of the 166 lots
in Phases II and III of the Residential Tract,  anticipated to cost in the range
of $1.9  million,  with the balance of its borrowing  available  under the Union
Bank Loan  referred  to in the  following  paragraph  and the net  proceeds of a
public bond  financing  effected  in  November,  1996 by the Indian  Trail Water
Control District (the  "District"),  which produced net avai lable funds for the
<PAGE>
project of approximately  $1,074,000.  The bonds are a direct  obligation of the
District and not of the  Partnership,  and  interest and  principal on the bonds
will payable from taxes levied on the lots in the Residential  Tract.  Such bond
issue  resulted  in an  increase in an  aggregate  real  estate tax  increase of
approximately  $117,000  per annum on the  entire  Residential  Tract,  of which
amount $600 is allocable to each lot individually.

         During the quarter the Partnership's  financing arrangements with Union
Bank  ("Bank")  were  amended  to  increase  the  Bank's  loan  commitment  from
$2,175,000  to  $2,725,000,  and the  maturity  date of the loan was extended to
January 31, 1998.  The  Partnership is required to apply $20,000 of the proceeds
of each lot sale to payment of the Union Bank Loan.

         Under the Partnership's  agreement with Lennar Homes, Inc.  ("Lennar"),
as described in the Incorporated  1996 10K, Lennar has contracted to purchase of
86 lots in Phase II of the Residential Tract for an aggregate of $2,451,000.  It
is  anticipated  that  closing on at least 22 of the lots will occur  during the
summer of 1997,  resulting in gross proceeds to the Partnership of approximately
$612,000. Lennar's obligations are subject to certain conditions as described in
the Incorporated 1996 10K.

         As described in the Incorporated 1996 10K, the Partnership has obtained
the rezoning of a 28 acre portion of the Crestwood  Tract  previously  zoned for
multi-family  housing to permit the Partnership to develop a 14 acre portion for
use as a shopping center site. The Partnership has executed an agreement to sell
the  entire  28  acre  portion  to an  unaffiliated  shopping  center  developer
("Purchaser") in four phases. The closing on the first phase,  postponed several
times,  is now  scheduled  to take place by the end of  February,  1997,  and is
anticipated to generate  approximately  $1,542,024 of gross proceeds (subject to
final  survey).  If the Purchaser  should  refuse to close,  which is considered
highly  unlikely,  its only  liability  would be its loss of deposits  presently
aggregating  $71,000.  The completion of the second,  third and fourth phases is
subject to numerous  contingencies  described in the Incorporated  1996 10-K and
revenues  under  current  contractual  arrangements  with the  Purchaser are not
likely to be received for several years.

         During the current  fiscal year, and based upon  management's  judgment
that ordinary operating expenses will not increase, the Partnership  anticipates
that cash flow and liquidity requirements will be satisfied by current cash, the
Union Bank financing  described above, land sales,  contingent  utility receipts
described  "Utility  Contingent  Receipts" in the Incorporated 1996 10K, and the
proceeds of the Indian Trail Water Control  District bonds. 

Affect of Land Sales on Future Cash Flow

         As indicated in Item 2 in the  Incorporated  1996 10K, the  Partnership
has  determined  to develop  portions of its  remaining  properties  in order to
enhance their ultimate  selling price.  It is unlikely,  in view of management's
decision to continue  development  activities  as an aid to the  enhancement  of
ultimate  liquidation  proceeds,  that  distributions  to partners  will be made
during  fiscal 1997.  However,  the  successful  completion  of sales  contracts
described  above could have a substantial  positive affect on liquidity and cash
flow in the 1997 fiscal  year and enable the  partnership  to resume  payment of
liquidating dividends in early part of the 1998 fiscal year.
<PAGE>
         Total net cash flow  which  might  become  available  for  distribution
remains  unpredictable  due to uncertain  conditions  in the South  Florida real
estate market in which the Partnership's  remaining real estate is located,  and
competition from other owners and developers of real estate in the South Florida
market.  These  conditions  will continue to affect the realizable  value of the
Partnership's  remaining land, including decisions by parties holding options on
the Partnership's land to exercise such options in whole or in part.

         The Partnership  received an annual contingent  payment on a prior sale
of a utility plant in the amount of $129,000 in late January, 1997. This payment
was substantially less than the $433,000 received in the previous year. The rate
of  construction in the Village of Royal Palm Beach could  significantly  affect
future  payments  to the  Partnership  under the  contract  described  under the
caption  "Utilities  Contingent  Receviable" in the Incorporated  1996 10-K. The
ability of the  Partnership  to realize  the  maximum  price  future  contingent
payments  (approximately  $5,475,000)  is  dependent  upon the rate at which the
population in the Village grows, and levels of water  consumption  which in turn
depends upon  economic,  social and climatic  factors which cannot be predicted.
There can be no assurance,  particularly in view of the decline in payments from
1995 to 1996,  that the rate of new  construction  or water  consumption in such
area will be sufficient to enable the  Partnership to receive the full amount or
even a  substantial  portion of such  payments  prior to the  expiration  of the
contingent payment term.

Environmental Matters

         There are no environmental  contingencies in respect of the Partnership
or its  properties.  Use of all of the  Partnership's  properties  is subject to
compliance with state and county land use regulations  relating to environmental
matters,  which the Partnership  takes into account in considering the values of
its properties.
<PAGE>
                           PART II - OTHER INFORMATION




ITEM 6.   Exhibits and Reports on Form 8-K

          (a)  Exhibits

               Exhibit 99 - Extract from Annual Report of the Registrant on Form
               10-K for the fiscal year ended September 30, 1996 - Item  2

          (b)  Reports on Form 8-K: None





                                   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.


                                         ROYAL PALM BEACH COLONY,
                                           LIMITED PARTNERSHIP

                                         By:  Stein Management Company, Inc.
                                              Managing General Partner


                                         By: /s/ David B. Simpson
                                             -----------------------------------
DATE:  February 17, 1997                     David B. Simpson,  Vice President