<PAGE>
 
                       SECURITIES AND EXCHANGE COMMISSION

                                Washington, D.C.

                                   Form 10-K

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

For the Fiscal Year Ended                                Commission File Number
December 31, 1996                                        #33-19736-A

                           Condev Land Fund II, Ltd.
                           -------------------------
                          (Exact Name of Registrant as
                           specified in its charter)

          Florida                                      #59-2862457
-------------------------------             -------------------------------
(State or other jurisdiction                (IRS Employer ID #)
 of incorporation or
 organization)


2487 Aloma Avenue
Winter Park, Florida                          32792
-------------------------------             ---------        
(Address of principal executive             (Zip Code)
 offices)

Registrant's telephone number, including area code (407) 679-1748
                                                   --------------
Securities registered pursuant to Section 12(b) of the Act:

                                      None
                                      ----

Securities registered pursuant to Section 12(g) of the Act:

                                      None
                                      ----

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 of 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
        -------        -------

State the aggregate market value of the voting stock held by non-affiliates of
the Registrant:
                                 Not Applicable
                                 --------------
<PAGE>
 
                                     PART I

Item l.

     Business:
     -------- 

     Condev Land Fund II, Ltd. (the "Partnership") is a Florida limited
     partnership formed on December 16, 1987 under the Florida Revised Uniform
     Partnership Act. The Partnership was formed with an initial contribution of
     $1,000 from the General Partner and $1,500 from the Initial Limited
     Partners. The Partnership registered with the Securities and Exchange
     Commission a total of 30,000 units of limited partnership interest (Units).
     Condev Investment Company, the Managing Dealer, had the right to sell an
     original amount of 20,000 units, and up to an additional 10,000 units
     pursuant to an over-allotment option.

     On May 11, 1988, Condev Associates, on behalf of Condev Land Fund II, Ltd.,
     accepted subscriptions for 4,218 units. On May 11, 1988, the general
     partner notified Barnett Banks Trust Company, N.A., the Escrow Agent, that
     the minimum number of units had been accepted and directed the Escrow Agent
     to pay the escrowed amount to the Partnership. The net proceeds of the
     offering were placed in short term, money-market type instruments pending
     investment as described in the Use of Proceeds section of the Prospectus
     dated February 29, 1988. Upon receipt of the net proceeds of the offering,
     the Amended and Restated Certificate and Agreement of Limited Partnership
     was filed with the Florida Secretary of State to admit the additional
     Limited Partners and to effect the withdrawal of the Original Limited
     Partners.

     From May 11, 1988 through June 30, 1989 the general partner accepted
     additional subscriptions for 25,580 Units. The Partnership collected
     $7,449,500 in Limited Partnership capital as of December 31, 1989.

     As provided under the terms of the Partnership Agreement the Partnership
     was to be in existence until December 31, 1995.  In accordance with the
     Florida Limited Partnership Law and the Partnership Agreement, after
     December 31, 1995 the Partnership has been in liquidation with no change in
     the status of the limited partners or general partner. The Partnership's
     operation will continue until all investments of the Partnership are sold
     and proceeds distributed to the partners.

     The Partnership has purchased seven properties to be held for investment in
     the Central Florida area. One parcel was purchased during 1988, five
     parcels were purchased during 1989 and one parcel was purchased during
     1990. Refer to Item 2. Properties, for full details.

     The Partnership has no employees. Messrs. Robert N. Gardner and Joseph J.
     Gardner are the general partners of Condev Associates, a Florida general
     partnership, which is the general partner of the Partnership. Mr. Robert L.
     Secrist, Jr. withdrew as a partner of Condev Associates on September 1,
     1988.

                                       2
<PAGE>
 
Item 2.

     Properties:
     ---------- 

     Since its inception, the Partnership has purchased seven properties for
     investment in the Central Florida area.   During 1994, one entire property
     and part of another property was sold.  There were no sales of land during
     1995.  During 1996, three parcels were sold.  As of December 31, 1996, the
     partnership owned or had an investment in three properties. At year end
     1996, the Partnership had a contract for sale of one additional property.

     The Limited Partnership Agreement requires an independent appraisal for
     each property it purchases, and the acquisition price not to exceed the
     appraised value.  The appraised values referred to herein are the results
     of the appraisal at the time of acquisition.

     The following is a summary of all properties acquired by the Partnership:

     Parcel 1:
     -------- 

     Originally, a 12.04 acre parcel of vacant land located at the northwest
     corner of Alafaya Trail and McCulloch Road in Seminole County, Florida.
     After the transaction with the Florida Department of Transportation (FDOT)
     described below, the remaining property is 9.23 acres. The property has 570
     feet of frontage on Alafaya Trail and 434 feet of frontage on McCulloch
     Road. The Partnership received an appraisal in the amount of $1,704,200 for
     the property at the time of acquisition.

     The property is located in an area of Orlando experiencing significant
     residential and commercial growth. Several road projects in the area,
     including the four-laning of McCulloch Road east of Alafaya Trail and six-
     laning of Alafaya Trail from the north entrance to the University of
     Central Florida to Highway 50 will be helpful in supporting continued
     growth in the area.

     During the first quarter of 1994, the FDOT condemned 2.81 acres of the
     12.04 acre commercial parcel. The FDOT paid $676,800 as compensation for
     the taking.  Of the compensation awarded, the Partnership received
     $608,635; the balance paid attorney's fees costs and taxes. In April, 1994,
     a distribution to limited partners in the amount of $506,556 was made. The
     balance was added to Partnership reserves.

     The Partnership sued the FDOT for additional compensation for the taking of
     the property. This suit was settled on September 27, 1994 by mediation
     which resulted in an additional $388,200 cash payment by FDOT to the
     Partnership. Of this amount, $97,050 was used to pay legal fees. As
     provided by Florida State law, these legal fees were refunded to the
     Partnership during the first quarter of 1995.
<TABLE>
<CAPTION>
 
     Date of Purchase:                        August 31, 1988
     <S>                                      <C>
     Purchase Price:                          $1,500,000
     Additional Capitalized Costs:            $  130,776
                                              ----------
     Less: Sale of 2.81 acres to FDOT         (  753,899)
                                              ----------
                                              $  876,877
</TABLE>

                                       3
<PAGE>
 
     On November 19, 1996 the Partnership entered into an Agreement of Sale
     relating to this parcel with a developer who intends to construct a retail
     center on the site. The Agreement calls for an inspection period of 90 days
     followed by a period of 180 days to obtain all required regulatory
     approvals for development of the site. Closing is scheduled for mid-August,
     assuming all required approvals have been obtained by that date.

     Parcel 2:
     -------- 
 
     The Partnership purchased, in joint venture with an affiliated partnership,
     Condev Land Growth Fund '86, Ltd., a 19+ acre tract located immediately
                                            -
     north of the University of Central Florida with 622 feet of frontage on
     McCulloch Road. This parcel is zoned for up to 212 residential units on
     17.65 acres, and 16,880 square feet of professional/office space on 1.45
     acres. The Partnership received an MAI appraisal for $935,000 on this
     property.

     On February 17, 1995, the Partnership entered into a Contract for Sale and
     Purchase relating to this property with Royal Apartments USA based in
     Champaign, Illinois. The sale was concluded on April 22, 1996. The purchase
     price for this parcel was $1,190,000, which included an amount of $35,000
     paid by the purchaser as additional consideration to extend the closing
     date. After expenses of the sale, the net proceeds realized by the Joint
     Venture were $1,104,330. A total of $1,080,000 was distributed to limited
     partners in May, 1996, $540,000 to limited partners of Condev Land Fund
     '86, Ltd., and $540,000 to limited partners of Condev Land Fund II, Ltd..
     The balance was added to Partnership reserves.
<TABLE>
<CAPTION>
 
     Date of Purchase:                          February 6, 1989
     <S>                                        <C>
     Purchase Price:                               $737,355
     Additional Capitalized Costs:                 $ 62,769
     Partnership Share (50.l% Interest)            $399,262
         Less: sale                                 399,262
                                                   --------
     Balance                                            -0-
</TABLE>

     Parcel 3:
     -------- 

     A 15.938 acre, commercially zoned parcel located in Lake County, Florida
     between Tavares and Leesburg on U.S. Highway 441. The Partnership received
     an appraisal of $1.8 million for the property.

     This property was sold in June, 1996. See Parcel 4 below.
<TABLE>
<CAPTION>
 
     Date of Purchase:                March 16, 1989
     <S>                              <C>
     Purchase Price:                      $1,275,000
     Additional Capitalized Costs:        $   24,112
     Less: sale                           $1,299,112
                                          ----------
     Balance:                                    -0-
</TABLE>

                                       4
<PAGE>
 
     Parcel 4:
     -------- 

     This is a 1.85 acre commercial parcel which adjoins parcel 3 and squares
     off the property. The property contains 1.85+ acres with approximately 260
                                                 -
     feet of frontage on U.S. Highway 441. The Partnership received an appraisal
     for $450,000 or $5.58 per square foot for the property.

     On June 14, 1996, the Partnership concluded the sale of this parcel, along
     with parcel 3 described above, to Home Depot USA, Inc. The purchase price
     for these two parcels was $2,750,000. After the expenses of the sale, the
     net cash proceeds realized by the Partnership were $2,433,823. A total of
     $2,425,000 was distributed to limited partners in July 1996. The balance
     was added to partnership reserves.
<TABLE>
<CAPTION>
 
     Date of Purchase:                June 27, 1989
     <S>                              <C>
     Purchase Price:                       $395,000
     Additional Capitalized Costs:         $ 18,779
     Less: sale                            $413,779
                                           --------
     Balance:                              $    -0-
 
</TABLE>

     Parcel 5:
     -------- 

     This parcel originally consisted of 4.65 acres of commercially zoned
     property located on the north side of U.S. Highway 27-441 in Lady Lake,
     Lake County, Florida. The property has road frontage on U.S. Highway 27 and
     Griffin Avenue. The Partnership received an appraisal of $2.50 per square
     foot or $535,000 for the property.

     On June 5, 1990 the Partnership sold 1.785 acres of the total 4.6512 acre
     site to SunBank N.A. for $375,000.

     On September 12, 1994, the Partnership entered into a Contract for Sale and
     Purchase that was ultimately assigned to First Federal Savings Bank of Lake
     County. The Contract provided for the sale of the entire remaining acreage
     at a price of $475,000. This transaction was concluded on October 10, 1994.

     Parcel 6:
     -------- 

     A 111.64 acre parcel located on U. S. Highway 27 in Lake County
     approximately one mile north of U.S. 192 and five miles from Walt Disney
     World. The property is zoned as a Planned Development comprised of single-
     family, multi-family and commercial uses. The Partnership received an
     appraisal of $20,000 per acre or $2,232,800 for the property.

     The southwest corridor of Orlando is an area that continues to experience
     rapid gain in employment, population and household growth and commercial
     development.

                                       5
<PAGE>
 
<TABLE>
<CAPTION>
 

     Date of Purchase:                November 11, 1989
     <S>                              <C>
     Total Purchase Price:                   $1,574,761
     Additional Capitalized Costs:           $  106,612
     
</TABLE>
     Parcel 7:
     -------- 

     Parcel 7 is a tract of land consisting of approximately 7 developable and
     15.57 (plus over minus) total acres. It is zoned OC-2 in the City of
     Maitland. The Partnership received an appraisal of $1,350,000 for the
     property.

     The parcel has a unique lakefront setting in the Lake Lucien/Maitland
     Center area on the north side of Orlando. This area is one of the
     preeminent office communities in the metropolitan area.
<TABLE>
<CAPTION>
 
     Date of Purchase:                June 7, 1990
     <S>                              <C>
     Purchase Price:                      $375,000
     Additional Capitalized Costs:        $ 39,163
 
</TABLE>

     In September, the Partnership entered into a contract for sale of this
     parcel with a developer who intended to use the site for professional
     offices. The purchaser was unable to conclude the contract, so the
     Partnership offset the purchaser's $5,000 deposit and placed the property
     back on the market.

Item 3.

     Legal Proceedings:
     ----------------- 

     As of December 31, 1996, the Partnership was not subject to any pending
     legal proceedings.


Item 4.
 
     Submission of Matters to a Vote of Security:
     ------------------------------------------- 

     No matter was submitted to Unit Holders for a vote during the year ended
     December 31, 1996.

                                       6
<PAGE>
 
                                    PART II
Item 5.

     Markets for Registrant's Common Equity and Related Stockholder Matters:
     ---------------------------------------------------------------------- 

     (a)  There has not been a public secondary market and it is not anticipated
     that a public secondary market for the Units will develop.

     (b)  As of December 31, 1996, there were approximately 973 holders of
     record of the Units of the Partnership.

     (c)  Unit holders received cash distributions totalling $4,600 during the
     year ended December 31, 1988 representing their pro-rata share of interest
     earned while funds were held in escrow.

     (d)  Cash distributions totalling $90,282 were made during the year ended
     December 31, 1989, representing net cash flow of the Partnership during the
     year 1988.  As provided in the Partnership Agreement, 99% of net cash flow
     was distributed to unit holders based on the number of days their
     investment was held during the year and the amount of the investment. The
     general partner received l% of the net cash flow, or $902.

     (e)  Pursuant to the Partnership Agreement, cash flow generated each year
     by the Partnership is to be distributed 99% to the limited partners and l%
     to the general partner. In March 1990 the limited partners and general
     partner received distributions of $155,263 and $1,569, respectively,
     attributable to cash flow generated during the year ended December 31,
     1989.

     On June 13, 1990 the distributable proceeds of the sale to SunBank, N. A.
     were distributed to Partners. After closing costs, the net proceeds to the
     Partnership were $375,020. Of this amount, $331,795 was distributed to the
     limited partners and $32,886 was distributed to the general partner.

     On April 20, 1994, a total of $506,556 was distributed to Partners. Funds
     for this distribution resulted from the initial settlement with the FDOT.
     See Item 2. Properties. Parcel 1. In November, 1994 the Partnership made an
     additional distribution to Partners in the amount of $715,152, representing
     proceeds from the Lady Lake parcel sale and the final settlement with the
     FDOT. Total distributions to Partners during 1994 were $1,221,718.

     On May 2, 1996, a total of $540,000 was distributed to Limited Partners.
     This represented net proceeds after expenses and reserves relating to the
     Partnership's interest in a 19.10 acre parcel of land located in Seminole
     County, Florida. On July 1, 1996, a total of $2,425,000 was distributed to
     limited partners representing net proceeds after expenses and reserves
     relating to the sale of Parcels 3 and 4 to Home Depot, USA, inc.. Total
     distributions during 1996 were $2,965,000.

                                       7
<PAGE>
 
Item 6.
     Selected Financial Data:
     ----------------------- 

                            Year Ended December 31,
                            -----------------------
<TABLE>
<CAPTION>

                                1993         1992         1991        1990         1989
                             -----------  -----------  ----------  -----------  -----------
<S>                          <C>          <C>          <C>         <C>          <C>
    Revenue                   $   17,435   $   20,724  $   24,580   $  260,768   $  201,435
    Net Income                 (  68,683)   (  71,303)  (  84,109)     146,497      153,515
    Total Assets               6,131,464    6,200,147   6,294,039    6,356,159    6,733,421
    Partnership
       Capital                 6,131,464    6,200,147   6,271,450    6,730,574    6,355,559

                                 1994         1995        1996
                              ----------   ----------  ----------
    Revenue                   $  516,468   $   19,549  $  913,179
    Net Income                   422,902    (  62,680)    842,315
    Total Assets               5,335,562    5,271,404   3,151,702
    Partnership
       Capital                 5,332,648    5,269,968   3,147,283

</TABLE>
     The above selected financial data should be read in conjunction with the
     financial statements and related notes appearing elsewhere in this annual
     report.

Item 7.

     Management's Discussion and Analysis of Financial Condition and Results of
     --------------------------------------------------------------------------
     Operations:
     ---------- 

     January 1, 1996 through December 31, 1996:

     The Partnership continued to manage the affairs of the Partnership and the
     portfolio properties.  Emphasis was placed on positioning the portfolio
     properties for sale and on preserving property development rights.

     On March 28, 1996 the Partnership entered into a contract with a developer
     for sale of its 9.2 (plus over minus) acre site at the intersection of
     Alafaya Trail and McCulloch Road in Seminole County, Florida. The
     prospective buyer intended to develop the site as a retail center. This
     contract was cancelled by the prospective buyer during the inspection
     period because the buyer was unable to secure an acceptable anchor tenant.

     On April 22, 1996, Condev/McCulloch Road Joint Venture, in which the
     Partnership had a 49.9% interest, concluded the sale of its 19.10 acre
     property located on McCulloch Road in Seminole County, Florida. The buyer
     was a group of investors who intend to construct a 192 unit student housing
     complex on the site. The Purchase Price for this parcel was $1,190,000,
     which includes an amount of $35,000 paid by the purchaser as additional
     consideration to extend the closing date. After expenses of the sale, the

                                       8
<PAGE>
 
     net proceeds realized by the joint Venture were $1,104,330.  Distributions
     aggregating $1,080,000 were made to limited partners in May, 1996.

     On June 14, 1996, the Partnership concluded the sale of two parcels
     aggregating 17.75 acres located on U.S. Highways 441/27 near the Lake
     County Mall in Lake County, Florida. The Purhase Price for these parcels
     was $2,750,000. After expenses of the sale, the net proceeds realized by
     the Partnership were $2,433,823. A total of $2,425,000 was distributed to
     limited partners in July 1996. The balance was added to partnership
     reserves.

     In November, the contract for sale of the Partnership's parcel located in
     Maitland, Seminole County was allowed to expire after the prospective buyer
     requested another extension but without additional consideration to the
     Partnership. As a result, the Partnership retained $5,000 in escrow
     deposits and has placed the property back on the market.

     For the year ended December 31, 1996, the Partnership reported total income
     of $913,179, including $737,235 gain on sale of land and $146,799 equity in
     income of joint venture, and $29,145 in other revenues. This compares to
     total income in 1995 of $19,549. The 1996 revenues reflect sale of the
     Partnership's land in Leesburg (Parcel #s 3 and 4) and Condev/McCulloch
     Road Joint Ventures sale of its 19.1 acre parcel in Seminole County (Parcel
     #2). There were no sales of land by the Partnership in 1995.

     Operating expenses totalled $70,864 for the year ended December 31, 1996,
     compared to $82,229 in 1995. The primary reason for the decrease was a
     reduction in taxes and permits, which decreased from $46,031 in 1995 to
     $29,400 in 1996. This is a result of properties being sold during the year.
     The other decrease was the elimination of the $5,124 equity loss in the
     joint venture in 1995. These decreases were partially offset by slight
     inceases in professional fees and office expenses in 1996, and by
     amortization of organizational expenses totalling $4,905. There was no
     amortization of organizational expenses in 1995 because no properties were
     sold. See Note 1 to the accompanying financial statements.

     The net profit reported for the year ended December 31, 1996 was $842,315,
     compared to a net loss of $62,680 for the year ended December 31, 1995, and
     a net profit for the year ended December 31, 1994 of $422,902.

     At year-end 1996, total assets of the Partnership were $3,151,702, compared
     with $5,271,404 at year-end 1995. This decrease reflects the sale of two
     properties during the year and the net operating costs of managing the
     Partnership. Liabilities at December 31, 1996 were $4,419, compared to
     total liabilities of $1,436 at December 31, 1995. Partners capital declined
     from $5,269,968 at December 31, 1995 to $3,147,283 at December 31, 1996.
     This decline resulted from the net profit for the year less the $2,965,000
     in distributions to limited partners during the year.

                                       9
<PAGE>
 
     The business of the Partnership is to own, manage and sell, as market
     conditions permit, pre-development land in the Central Florida area. Due to
     the slow recovery of the commercial real estate market in the Central
     Florida area, it is difficult to project when individual properties will
     sell or when the entire portfolio will be liquidated. Because of these
     uncertainties, the General Partner has established reserves to fund real
     estate taxes, costs associated with maintaining the properties and other
     required services such as partnership administration, accounting and legal.
     The reserve will be replenished from future land sales as needed.

     For 1997, the General Partner estimates that approximately $30,000 will be
     required to pay real estate taxes on the remaining properties held by the
     Partnership. In addition, the General Partner estimates that property
     associated holding costs will total approximately $16,000 during 1996 and
     the costs of administration, legal and accounting will require
     approximately $20,000. These three categories of expense, totaling $66,000,
     will be paid from Partnership reserves which were $169,876 at 1996 year
     end. Interest and other income is projected at $20,000 for 1997. Should the
     Partnership not successfully conclude a property sale in 1996 and add to
     reserves, reserves would fall to approximately $124,000 by year end 1996.
     At the level of costs associated with the Partnership's business as set out
     above the Partnership has reserves at year end 1996 to fund approximately
     two years of costs. The General Partner intends to add to Partnership
     reserves during 1997 from property sales. In the event the Partnership is
     unable to generate adequate reserves through the sale of properties, the
     General Partner is obligated to lend to the Partnership up to an aggregate
     amount of $100,000 to fund operating expenses. See Item 13, Certain
     Relationships and Related Transactions.

     The General Partner estimates that two properties will be sold in 1997,
     resulting in cash to the Partnership in the approximate amount of
     $1,815,000. If concluded as estimated, the sale proceeds would result in a
     distribution to the limited partners in the approximate amount of
     $1,800,000. The General Partner intends to supplement the Partnership's
     reserves as set forth above. However, the General Partner feels the
     majority of sale proceeds could be distributed. If the sale and
     distribution are concluded as estimated above, Partnership assets and
     Partner's Capital would fall to approximately $1,850,000.

     In addition to the projected sales above, the General Partner reasonably
     expects to place the one remaining Partnership property under contract in
     1997. However, it is expected that this contract would not close until
     1998. It is estimated that it will require another two (2) years to
     complete the sale of properties held by the Partnership.
 

                                       10
<PAGE>
 
     The following is a summary of capital resources and investment from
     inception to December 31, 1996:
<TABLE>
<CAPTION>
 
<S>                                                        <C>
          Gross Proceeds of Offering:                      $7,449,500
          Less:  Syndication Costs                         (  914,667)
                 Capitalized Organizational
                    expenses                               (   18,362)
                                                           ----------
          Net Proceeds available for
            investment in property:                        $6,516,471
 
          Investments:
                 Properties                                $2,972,413
                                                           ----------
 
          Partnership Reserves:                            $  169,876
                                                           ==========
 
</TABLE>
     January 1, 1995 through December 31, 1995:

     The Partnership continued to manage the affairs of the Partnership and the
     portfolio properties to position them for sale.

     On February 17, 1995, the Partnership entered into a Contract for Sale and
     Purchase relating to Parcel 2 on McCulloch Road in Seminole County with
     Royal Apartments USA based in Champaign, Illinois. The agreement provided
     for the sale of approximately 1/3 of the property zoned multi-family, and
     an option agreement with the same buyer for the remaining multi-family
     acreage. In August, 1995 the Contract was amended to provide for the
     purchase of the entire tract at one time in December 1995. In December,
     1995, the Contract was further amended to provide for an additional
     security deposit and an extension of the latest possible closing date to
     April 15, 1996. This was necessary to allow the Buyer time to obtain vested
     concurrency rights from Seminole County.

     On May 30, 1995, the Partnership entered into a contract for sale of Parcel
     1 in Seminole County with a developer of retail shopping centers. The
     contract provided for a 90-day period for the purchaser to reach an
     agreement with an anchor tenant for the proposed development. The contract
     was cancelled by the buyer on August 24, 1995.

     In September, the Partnership entered into a contract for sale of parcel 7
     in Maitland with a developer who intends to use the site for professional
     offices. The contract calls for a 180-day due diligence period and closing
     30 days thereafter. As set forth in the agreement, a substantial cash
     payment is due at closing with two additional payments of $50,000 due at
     the end of each of the first two years after closing and the balance is due
     three years from the date of closing. In addition, the buyer will pay the
     partnership interest at 8% per annum. With allowable extensions, the
     contract can be expected to close in June 1996.

     In November, the Partnership entered into a contract for sale of Parcels 3
     and 4 with a nationally recognized retailer. The contract calls for a 90-
     day due diligence period, followed by extensions of up to six months to
     obtain all required permits. The Buyer is required to make monthly non-
     refundable deposits with each 30-day extension request. With all possible
     extensions, the contract would close in September 1996.

     For the year ended December 31, 1995, the Partnership reported total income

                                       11
<PAGE>
 
     of $19,549. This compares to total income in 1994 of $516,468, including
     $499,719 recognized gain on the sale of land and $16,749 in interest and
     other income. There were no sales of land in 1995. The 1994 gain on sale of
     land was the net result of the sale relating to 2.81 acres of the
     Partnership's 12.04 acre parcel of land in Seminole County, Florida, and
     the net profit from the sale of the Partnership's 2.83 acre parcel in Lady
     Lake, Florida.

     Operating expenses totalled $82,229 for the year ended December 31, 1995,
     compared to $93,566 in 1994. The primary reason for the decrease was a
     reduction in professional fees, which decreased from $14,625 in 1994 to
     $7,462 in 1994. The higher level in 1994 relates to professional services
     needed in connection with the FDOT condemnation of Parcel No. 1. In
     addition, there was no amortization of organizational expenses in 1995
     because no properties were sold. See Note 1 to the accompanying financial
     statements. The other expense categories remained essentially unchanged
     from the prior year.

     The net loss reported for the year ended December 31, 1995 was $62,680
     compared to a net profit of $422,902 for the year ended December 31, 1994,
     and a net loss for the year ended December 31, 1993 of $68,683.

     At year-end 1995, total assets of the Partnership were $5,271,404, compared
     with $5,335,562 at year-end 1994. This decrease reflects the net operating
     costs of managing the Partnership. Liabilities at December 31, 1995 were
     $1,436, compared to total liabilities of $2,914 at December 31, 1993.
     Partners capital declined from $5,332,648 at December 31, 1994 to
     $5,269,968 at December 31, 1995, a decrease of $62,680. This decline
     resulted from the net loss reported for the year.

     The following is a summary of capital resources and investment from
     inception to December 31, 1995:

<TABLE> 
<CAPTION> 
<S>                                                    <C> 
          Gross Proceeds of Offering:                  $7,449,500
          Less: Syndication Costs                      (  914,667)
                Capitalized Organizational
                  expenses                             (   18,362)
                                                        ---------
          Net Proceeds available for
            investment in property:                    $6,516,471
  
          Investments:
                Properties                             $4,672,647
                Joint Ventures                            399,262
                                                        ---------

          Total Investments:                           $5,071,909

          Partnership Reserves:                        $  184,283
                                                       ==========

</TABLE> 
     January 1, 1994 through December 31, 1994:

     The Partnership continued to manage the portfolio properties to position

                                       12
<PAGE>
 
     them for sale in what seemed to be an improving market for commercial
     properties. Emphasis was on sale of properties where conditions permitted.

     In April 1994, the Partnership distributed $506,556 to the Partners. Funds
     for this distribution came from payments received from the Florida
     Department of Transportation (FDOT) in connection with their acquisition of
     2.81 acres of the Partnership's 12.04 acre parcel on Alafaya Trail. At that
     time, the General Partner felt that the Partnership had not been adequately
     compensated for this parcel and concluded that it was in the best interest
     of the Partnership to initiate legal action against the FDOT for additional
     compensation. This action resulted in court-supervised mediation, which was
     concluded in September 1994. The final settlement called for an additional
     cash payment of $388,200 by the FDOT to the Partnership. The additional
     cash payment was received in November, 1994, and $291,150 was distributed
     to Limited Partners. The balance was used to pay legal fees and augment
     Partnership reserves. It is anticipated that reimbursement for $166,530 in
     accrued legal fees will be received during the first quarter of 1995. Also
     in November 1994, the net proceeds from the Lady Lake sale in the amount of
     $424,002 were distributed to Partners. Total distributions for the year
     were $1,221,718.

     On September 12, 1994, the Partnership entered into a Contract for Sale and
     Purchase of its 2.83 acre parcel located in Lady Lake, Florida. See Item 2,
     Properties, Parcel 5. This Contract was ultimately assigned to First
     Federal Savings Bank of Lake County. The Contract provided for the sale of
     the entire remaining acreage at a price of $475,000. This transaction was
     concluded on October 10, 1994.

     On November 23, 1994, the Partnership entered into a Binding Letter of
     Intent for the sale of Parcels 3 and 4 located in Leesburg, Florida. The
     agreement is with ROW Properties & Development, Inc., a commercial
     developer based in Fort Lauderdale, Florida. The agreement provides for a
     contingency period during which the buyer may evaluate the site for its
     intended use and to obtain a commitment from a major tenant. The agreement
     was terminated by the buyer in April 1995. See Item 2. Properties, 
     parcel 4.

     On December 6, 1994, the Partnership entered into a Contract for Sale and
     Purchase of the entire remaining acreage of Parcel 1 located at the
     northwest corner of Alafaya Trail and McCulloch Road in Seminole County,
     Florida with GTB Development, Inc., a local real estate development
     company. This Contract was cancelled by the Partnership when the Buyer
     failed to make the required escrow deposit.

     For the year ended December 31, 1994, the Partnership reported total income
     of $516,468, including $499,719 recognized gain on the sale of land and
     $16,749 in interest and other income. This compares to $17,435 in interest
     and other income for the year ended December 31, 1993. There were no sales
     of land in 1993. The 1994 gain on sale of land was the net result of the
     sale relating to 2.81 acres of the Partnership's 12.04 acre parcel of land
     in Seminole County, Florida, and the net profit from the sale of the
     Partnership's 2.83 acre parcel in Lady Lake, Florida. Refer to Item 2,
     Properties, Parcels 1 and 5.

                                       13
<PAGE>
 
     Operating expenses totalled $93,566 for the year ended December 31, 1994,
     compared to $86,118 the previous year. The primary reason for the increase
     was a higher expense for professional services incurred in connection with
     the Alafaya Trail property, which increased from $5,748 in 1993 to $14,625
     in 1994. This was partially offset by lower real estate taxes which
     declined from $55,001 in 1993 to $46,041 in 1994. This is the result of
     having sold properties during the year, reducing real estate taxes. This
     trend can be expected to continue as the portfolio is liquidated. The other
     expense categories remained essentially unchanged from the prior year.

     The net income reported for the year ended December 31, 1994 was $422,902,
     a dramatic improvement from the net loss reported for the year ended
     December 31, 1993 of ($68,683).

     At year-end 1994, total assets of the Partnership were $5,335,562, compared
     with $6,131,464 at year-end 1993. This decrease reflects the sale of the
     2.81 acres of the Partnership's 12.04 acre parcel of land to the FDOT, and
     the Partnership's 2.83 acre parcel in Lady Lake, Florida. Assets will
     continue to decrease as properties are sold. Liabilities at December 31,
     1994 were $2,914. There were no outstanding liabilities as of December 31,
     1993. Partners capital declined from $6,131,464 at December 31, 1993 to
     $5,332,648 at December 31, 1994, a decrease of $798,816. This decline
     resulted from $1,221,718 in distributions to Limited Partners offset by
     Partnership income of $422,902 for the year.

     The following is a summary of capital resources and investment from
     inception to December 31, 1994:
<TABLE> 
<CAPTION> 
<S>                                            <C> 
          Gross Proceeds of Offering:          $7,449,500
          Less:  Syndication Costs             (  914,667)
                 Capitalized Organizational
                   expenses                    (   18,362)
                                                ---------
          Net Proceeds available for
            investment in property:            $6,516,471
 
          Investments:
                 Properties                    $4,619,772
                 Joint Ventures                   399,568
                                                ---------

          Total Investments:                   $5,019,340

          Partnership Reserves:                $  134,480
                                               ==========
</TABLE> 

                                       14
<PAGE>
 
Item 8.

     Financial Statement and Supplementary Data:
     ------------------------------------------ 

     See Index to Financial Statements and Financial Statement Schedules on Page
     F-1.


Item 9.

     Changes in and Disagreements with Accountants on Accounting and Financial
     -------------------------------------------------------------------------
     Disclosure:
     ---------- 

     There were no disagreements on accounting and financial disclosures
     required to be disclosed by Item 304 of Regulation S-K.

     Please refer to Item 14(b) in Form 10K submitted for the year 1989 for
     information relating to a change of auditors.

     During 1992 the General Partner elected to change auditors for the
     Partnership to save on audit costs. There were no disagreements with either
     KPMG, the prior auditors, or the new auditor, Osburn, Henning and Company
     with respect to accounting or financial disclosures required to be
     disclosed by Item 304 of Regulation S-K.

                                       15
<PAGE>
 
                                    PART III

Item 10.

     Directors and Executive Officers of the Registrant
     --------------------------------------------------

     (a)  The Registrant does not have a Board of Directors.  Condev Associates,
     A Florida general partnership consisting of Messrs. Robert N. Gardner and
     Joseph J. Gardner is the General Partner of the Partnership.

     (b), (c), and (e)

     The background and experience of the partners of the General Partner are as
     follows:

     Robert N. Gardner, age 62 has been president, a director and shareholder of
     -----------------                                                          
     Condev Corporation and it's predecessors since 1961.  A Florida licensed
     real estate broker and Class A Contractor, he serves on the boards of
     directors of Barnett Bank of Central Florida, N.A., and Schroeder-Manatee,
     Inc.

     Joseph J. Gardner, age 59 has been an officer, a director and shareholder
     -----------------                                                        
     of Condev Corporation and its predecessors since 1961. Prior to joining
     Condev Corporation, he was employed in the land department of Continental
     Oil Company. Mr. Gardner is a licensed real estate broker.

     Condev Corporation, which has its offices located at the same address of
     the General Partner and Partnership, has been operating in the Florida real
     estate market since 1961. It has two active affiliates. PCD, Inc. is a
     development company specializing in horizontal land development. Condev
     Realty, Inc. is a Florida licensed real estate broker which concentrates on
     site acquisition, land assemblage and land investment.

Item 11.

     (a), (b), (c) and (d)

     The Registrant has not paid and does not plan to pay any executive
     compensation to the General Partner or its affiliates (other than described
     in Item 13 below).

     (e)  The Partnership Agreement provides the following:

     If a General Partner is removed, he has the option of becoming a Special
     Limited Partner with respect to his interest at the time of removal or
     requiring the successor General Partner to purchase his interest at its
     then fair market value determined by mutual agreement between them or by
     arbitration if they fail to agree.  The Registrant will automatically
     continue if there is a General Partner remaining upon such removal, and may
     continue if the Limited Partners elect a successor General Partner prior to
     such removal if there would be no remaining General Partner upon such
     removal.

                                       16
<PAGE>
 
Item 12.

     Security Ownership of Certain Beneficial Owners and Management:
     -------------------------------------------------------------- 

     (a)  The following is a list of persons who are known to the Registrant to
     be the beneficial owners of more than 5% of the total units outstanding as
     of December 31, 1996:

                                      NONE

     (b)  The following is a list of units beneficially owned by all partners of
     the General Partner as of December 31, 1996:

                                      NONE

     (c)  There are no arrangements known to the registrant, including any
     pledge by any person of security of the registrant or any of its parents or
     affiliates, the operation of which may at a subsequent date result in a
     change in control of the registrant.


Item 13.

     Certain Relationships and Related Transactions
     ----------------------------------------------

     The Partnership Agreement provides for the reimbursement to the general
     partner for direct administrative expenses incurred in the operation of the
     Partnership.  For each of the years ended December 31, 1996, 1995, and
     1994, a total of $11,676 was reimbursed to the general partner for direct
     expenses incurred.

     The Partnership Agreement permits the general partner or an affiliate to
     receive an acquisition fee or a real estate commission from sellers in an
     amount not to exceed 5% of the gross purchase price of land purchased by
     the Partnership so long as the total acquisition fee, including that paid
     to unaffiliated parties, does not exceed 10% of the gross purchase price.
     No acquisition fees were paid to the General Partner during 1996, 1995, or
     1994, as no properties were acquired during these years.

     When properties are sold, under certain circumastances, an affiliate of the
     general partner may be paid real estate commissions in amounts customarily
     charged by others rendering the same services not to exceed 10% of the
     gross sales price. No real estate commissions were paid to the general
     partner or any affiliate of the general pertner during the years ended
     December 31, 1996, 1995 or 1994.

     The general partner is obligated to loan up to $100,000 to the Partnership
     during its term to meet working capital requirements. No such loans were
     made to the Partnership during the years ended December 31, 1996, 1995, or
     1994.

     (c)  No management person is indebted to the Registrant.

                                       17
<PAGE>
 
                                    PART IV


Item 14.

     Exhibits, Financial Statements, Schedules and Reports on Form 8-K:
     ----------------------------------------------------------------- 

     (a)  (1 and 2) See Index to Financial Statements and Financial Statement
     Schedules on Page F-1 previously submitted.

     (b) Reports on Form 8-K submitted June 5, 1990 regarding the sale of a
     portion of Parcel 5 to SunBank, N. A.

     (c)  Exhibits:

          (1)    Managing Dealer Agreement*
          (1.1)  Form of Soliciting Dealer Agreement*
          (1.2)  Escrow Agreement*
          (4)    Limited Partnership Agreement and Certificate*
          (4.1)  Amended and Restated Limited Partnership Agreement @
          (10.1)    Contract for Purchase and Sale between Registrant and J. L.
                    Mason Group of Central Florida, Inc. dated September 2,
                    1988@
          (10.2)    Contract for Purchase and Sale between Registrant and Ann
                    Eva Polacek, Trustee dated December 8, 1988@
          (10.3)    Contract for Purchase and Sale between Registrant and Orbell
                    Corporation dated November 30, 1988@
          (10.4)    Contract for Purchase and Sale between Registrant and Allan
                    L. Silbernagel dated May 2, 1989#
          (10.5)    Contract for Purchase and Sale between Registrant and Lil'
                    Champ Food Stores dated August 21, 1989#
          (10.6)    Contract for Purchase and Sale between Registrant and Zom
                    Tourist Commercial dated March 30, 1989#
          (10.7)    Contract for Purchase and Sale between SunBank, N. A.
                    (Buyer) and Registrant dated December 22, 1989#
          (10.8)    Contract for Purchase and Sale between Registrant and Grant
                    Street National Bank.
                    
          *      Incorporated by reference to the exhibits to the Registration
                 Statement No 33-06419 effective on February 29, 1986

          @      Incorporated by reference to the exhibits to Form 10-K
                 submitted for the Fiscal Year ended December 31, 1988.

          #      Incorporated by reference to the exhibits to Form 10-K,
                 submitted for the fiscal year ended December 31, 1989.

          (13)   Annual Report to Security Holders The Annual Report to Unit
                 Holders is in the form of a year end quarterly report and is
                 attached as Exhibit "B".

                                       18
<PAGE>
 
                                   SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf of the undersigned, thereunto duly authorized.

                                        CONDEV ASSOCIATES, General Partner


Date: February 25, 1997                 By:Robert N. Gardner
      --------------------              ----------------------------
                                        Robert N. Gardner, Partner

Date: February 25, 1997                 By:Joseph J. Gardner
      --------------------              ----------------------------
                                        Joseph J. Gardner, Partner


    Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and the capacities and on the date indicated.

CONDEV ASSOCIATES, General Partner


Robert N. Gardner                       February 25, 1997
---------------------------------       -------------------
Robert N. Gardner, Partner              Date


Joseph J. Gardner                       February 25, 1997
---------------------------------       -------------------
Joseph J. Gardner, Partner              Date

                                       19
<PAGE>
 
SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT TO SECTION
15(d) OF THE ACT BY REGISTRANTS WHICH HAVE NOT REGISTERED SECURITIES PURSUANT TO
SECTION 12 OF THE ACT.


                         INDEX TO FINANCIAL STATEMENTS
                                      AND
                              FINANCIAL SCHEDULES


Condev Land Fund II, Ltd.
       Financial Reoprt - December 31, 1996                      13A
       1996 Annual Report                                         B
                                        

                                       20
<PAGE>
 
                                  Exhibit 13A

                           CONDEV LAND FUND II, LTD.
                        (A FLORIDA LIMITED PARTNERSHIP)

                               FINANCIAL REPORT

                               DECEMBER 31, 1996
<PAGE>
 
                                C O N T E N T S
<TABLE>
<CAPTION>
                                                                        Page
<S>                                                                     <C>
 
INDEPENDENT AUDITORS' REPORT                                               1
 
FINANCIAL STATEMENTS
 
  Balance sheets                                                           2
  Statements of operations                                                 3
  Statements of partners' capital                                          4
  Statements of cash flows                                                 5
  Notes to financial statements                                       6 - 10
 
</TABLE>
<PAGE>
 
                          INDEPENDENT AUDITORS' REPORT
                          ----------------------------



                                January 15, 1997



The Partners
Condev Land Fund II, Ltd.
Winter Park, Florida


    We have audited the accompanying balance sheets of Condev Land Fund II, Ltd.
(a Florida Limited Partnership) as of December 31, 1996 and 1995, and the
related statements of operations, partners' capital, and cash flows for each of
the three years in the period ended December 31, 1996.  These financial
statements are the responsibility of the General Partner.  Our responsibility is
to express an opinion on these financial statements based on our audits.

    We conducted our audits in accordance with generally accepted auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

    In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Condev Land Fund II, Ltd. as
of December 31, 1996 and 1995, and the results of its operations and its cash
flows for each of the three years in the period ended December 31, 1996, in
conformity with generally accepted accounting principles.

                                      -1-
<PAGE>
 
                           CONDEV LAND FUND II, LTD.
                        (A Florida Limited Partnership)

                                 BALANCE SHEETS
                           December 31, 1996 and 1995


<TABLE>
<CAPTION>
                                           1996        1995
                                        ----------  ----------
<S>                                     <C>         <C>
      ASSETS
 
Cash and cash equivalents               $  169,876  $  184,283
Accounts receivable                            105           -
Land, at cost (Note 2)                   2,972,413   4,672,647
Investment in joint venture (Note 3)             -     399,262
Organization costs, less accumulated
  amortization of $9,064 and $3,160
  in 1996 and 1995                           9,308      15,212
                                        ----------  ----------
 
                                        $3,151,702  $5,271,404
                                        ==========  ==========
 
  LIABILITIES AND PARTNERS' CAPITAL

Liabilities
   Accounts payable                     $    4,419   $    1,436
                                        ----------   ----------
 
 
Partners' capital
  General partner                           (2,465)       3,342
  Limited partners                       3,149,748    5,266,626
                                        ----------   ----------
 
          Total partners' capital        3,147,283    5,269,968
                                        ----------   ----------
 
                                        $3,151,702   $5,271,404
                                        ==========   ==========
 
</TABLE>



 The Notes to Financial Statements are an integral part of these statements.

                                      -2-
<PAGE>
 
                            CONDEV LAND FUND II, LTD.
                        (A Florida Limited Partnership)

                            STATEMENTS OF OPERATIONS
                  Years Ended December 31, 1996, 1995 and 1994


<TABLE>
<CAPTION>
 
 
                                         1996        1995       1994
                                       ---------  ----------  ---------
<S>                                    <C>        <C>         <C>
Revenue:
  Gain on land sale                     $737,235   $      -    $499,719
  Equity in income of joint venture      146,799          -           -
  Interest income                          9,379      7,065       6,042
  Forfeited deposits                      13,000          -           -
  Other income                             6,766     12,484      10,707
                                        --------   --------    --------
                                         913,179     19,549     516,468
                                        --------   --------    --------
 
Expenses:
  Taxes and permits                       29,400     46,031      46,041
  Office expenses                         18,819     16,794      15,612
  Professional fees                       11,197      7,462      14,625
  Amortization                             5,904          -       2,602
  Other expenses                           5,544      6,818       9,556
  Equity in loss of joint venture              -      5,124       5,130
                                        --------   --------    --------
                                          70,864     82,229      93,566
                                        --------   --------    --------
 
          Net income (loss)             $842,315   $(62,680)   $422,902
                                        ========   ========    ========
 
</TABLE>



 The Notes to Financial Statements are an integral part of these statements.

                                      -3-
<PAGE>
 
                            CONDEV LAND FUND II, LTD.
                        (A Florida Limited Partnership)

                        STATEMENTS OF PARTNERS' CAPITAL
                  Years Ended December 31, 1996, 1995 and 1994


<TABLE>
<CAPTION>
 
 
                                General     Limited
                                Partner     Partners       Total
                               ---------  ------------  ------------
<S>                            <C>        <C>           <C>
 
Balances, December 31, 1993     $ 4,737   $ 6,126,727   $ 6,131,464
 
  Distributions                       -    (1,221,718)   (1,221,718)
 
  Net income (loss)                (768)      423,670       422,902
                                -------   -----------   -----------
 
Balances, December 31, 1994       3,969     5,328,679     5,332,648
 
  Net income (loss)                (627)      (62,053)      (62,680)
                                -------   -----------   -----------
 
Balances, December 31, 1995       3,342     5,266,626     5,269 968
 
  Distributions                       -    (2,965,000)   (2,965,000)
 
  Net income (loss)              (5,807)      848,122       842,315
                                -------   -----------   -----------
 
Balances, December 31, 1996     $(2,465)  $ 3,149,748   $ 3,147,283
                                =======   ===========   ===========
 
</TABLE>



 The Notes to Financial Statements are an integral part of these statements.

                                      -4-
<PAGE>
 
                            CONDEV LAND FUND II, LTD.
                        (A Florida Limited Partnership)

                            STATEMENTS OF CASH FLOWS
                  Years Ended December 31, 1996, 1995 and 1994


<TABLE>
<CAPTION>
 
 
                                                 1996         1995         1994
                                             ------------  ----------  ------------
<S>                                          <C>           <C>         <C>
CASH FLOWS FROM OPERATING ACTIVITIES
  Net income (loss)                          $   842,315    $(62,680)  $   422,902
  Adjustments to reconcile net income
    (loss) to net cash used in operating
    activities:
      Gain on land sale                         (737,235)          -      (499,719)
      Equity in (income) loss of joint
        venture                                 (146,799)      5,124         5,130
      Amortization                                 5,904           -         2,602
      (Increase) in accounts receivable             (105)          -             -
      Increase (decrease) in
        accounts payable                           2,983      (1,478)        2,914
                                             -----------    --------   -----------
          Net cash used in operating
            activities                           (32,937)    (59,034)      (66,171)
                                             -----------    --------   -----------
 
CASH FLOWS FROM INVESTING ACTIVITIES
  Land acquisitions and related costs             (7,406)    (52,875)      (13,473)
  Proceeds from land sale, net of
    closing costs                              2,444,875     166,530     1,242,898
  Refund of sewer capacity fees                        -           -        54,000
  Proceeds from severance award                        -           -        76,800
  Distribution from joint venture                549,200
  Investment in joint venture                     (3,139)     (4,818)       (5,267)
                                             -----------    --------   -----------
          Net cash provided by (used in)
            investing activities               2,983,530     108,837     1,354,958
                                             -----------    --------   -----------
 
CASH FLOWS FROM FINANCING ACTIVITIES
  Distributions to partners                   (2,965,000)          -    (1,221,718)
                                             -----------    --------   -----------
 
          Net increase (decrease) in cash        (14,407)     49,803        67,069
 
CASH AND CASH EQUIVALENTS, BEGINNING             184,283     134,480        67,411
                                             -----------    --------   -----------
 
CASH AND CASH EQUIVALENTS, ENDING            $   169,876    $184,283   $   134,480
                                             ===========    ========   ===========
 
</TABLE>



  The Notes to Financial Statements are an integral part of these statements.

                                      -5-
<PAGE>
 
                            CONDEV LAND FUND II, LTD.
                        (A Florida Limited Partnership)

                         NOTES TO FINANCIAL STATEMENTS



Note 1.  Summary of Significant Accounting Policies

       Organization
       ------------

         Condev Land Fund II, Ltd. (the Partnership) was formed on December 16,
         1987 pursuant to the provisions of the Florida Revised Uniform Limited
         Partnership Act for the purpose of acquiring and holding unimproved
         land in Central Florida for investment.  The Partnership was formed
         with an initial capital contribution of $1,000 from the general
         partner, Condev Associates, and the issuance of 29,798 units of limited
         partnership interest at $250 per unit.

         The terms of the partnership agreement provided that the Partnership
         was to continue in existence until December 31, 1995.  However, the
         Partner-ship's operation will continue until all investments of the
         Partnership are sold and proceeds distributed to the partners.

       Use of Estimates
       ----------------

         In preparing the financial statements, management is required to make
         estimates and assumptions that affect the reported amounts of assets
         and liabilities as of the date of the financial statements and revenues
         and expenses for the period.  Actual results could differ significantly
         from those estimates.

       Organization Costs
       ------------------

         The Partnership has capitalized all organization costs.  Upon sale of
         land, each parcel is allocated a portion of these costs based on the
         ratio of total acquisition cost to the net proceeds of the offering
         available to purchase properties for investment.  In connection with
         the sales of land during the years ended December 31, 1996 and 1994,
         amortization of organization costs amounted to $5,904 and $2,602 which
         is reflected in the accompanying statements of operations.  No
         amortization of organization costs was recorded during the year ended
         December 31, 1995, as no sales occurred.

       Land
       ----

         Land is stated at the lower of cost or fair value.  Costs that clearly
         relate to land development projects are capitalized.  Interest costs,
         real estate taxes and insurance are capitalized while development is in
         progress.  When development is complete, these costs are expensed.

CONTINUED ON NEXT PAGE

                                      -6-
<PAGE>
 
                            CONDEV LAND FUND II, LTD.
                        (A Florida Limited Partnership)

                         NOTES TO FINANCIAL STATEMENTS


Note 1.  Summary of Significant Accounting Policies - (Continued)

         Investments in Joint Venture
         ----------------------------

           Investments in joint ventures are accounted for using the equity
           method.

         Income Taxes
         ------------

           The Partnership functions as a conduit for income tax purposes.  As
           such, the Partnership files an information tax return on which it
           allocates its revenue and expenses among the partners as required by
           the partnership agreement.  The partners are required to report such
           items on their individual income tax returns.

         Cash and Cash Equivalents
         -------------------------

           For purposes of the statement of cash flows, the Partnership
           considers all highly liquid debt instruments purchased with a
           maturity of three months or less to be cash equivalents. At December
           31, 1996, cash and cash equivalents included $65,413 invested in the
           Emerald Treasury Cash Fund.
 
 
Note 2.    Land

           At December 31, 1996 and 1995, land consisted of the following:
<TABLE> 
<CAPTION> 
 
                                                       1996        1995
                                                    ----------  ----------
<S>                                                 <C>         <C>
         9.22 acre parcel (zoned commercial)
           in southeast Seminole County, Florida    $  876,877  $  876,877
             (2.82 acres sold in 1994)
         111.64 acre parcel (zoned PUD)
           in Lake County, Florida                   1,681,373   1,674,352
         15.938 acre parcel (zoned commercial)
           in Lake County, Florida, sold in 1996             -   1,299,112
         1.85 acre parcel (zoned commercial)
           in Lake County, Florida, sold in 1996             -     413,779
         15 acre parcel (zoned office)
           in Orange County, Florida                   414,163     408,527
                                                    ----------  ----------
 
                                                    $2,972,413  $4,672,647
                                                    ==========  ==========
 
</TABLE>

                                      -7-
<PAGE>
 
                           CONDEV LAND FUND II, LTD.
                        (A Florida Limited Partnership)

                         NOTES TO FINANCIAL STATEMENTS


Note 3.  Accounts receivable

         In connection with a land condemnation during the year ended December
         31, 1994, the Partnership was due $166,530 representing legal fees
         withheld from the condemnation proceeds. The Partnership collected this
         receivable in full during the year ended December 31, 1995.


Note 4.  Investment in Joint Venture

         The Partnership owned a 49.9% interest (which was acquired in 1989) in
         Condev/McCulloch Road Joint Venture (a Florida Joint Venture) (the
         Joint Venture) whose purpose was to acquire and hold a 19 acre parcel
         of land in Seminole County, Florida for investment purposes. The
         remaining 50.1% interest was owned by Condev Land Growth Fund '86,
         Ltd., an affiliate of the Partnership's general partner. The
         Partnership's investment in the Joint Venture as of December 31, and
         its equity in loss of the Joint Venture for the years then ended are as
         follows:
<TABLE>
<CAPTION>
                                                EQUITY IN
                        YEAR     INVESTMENT   (INCOME) LOSS
                        -------  ----------   --------------
<S>                              <C>          <C>
 
                         1996      $      -     $(146,799)
                         1995      $399,262     $   5,124
                         1994      $399,568     $   5,130
</TABLE>

         During the year ended December 31, 1996, the Joint Venture sold its
         parcel of land and recognized a gain of $300,900. The Joint Venture
         made a complete distribution to its venturers of $1,100,602, of which
         the Partnership received $549,200, thereby terminating the Joint
         Venture.

         A summary of the assets, liabilities, and venturers' capital of
         Condev/McCulloch Road Joint Venture as of December 31, 1996 and 1995 is
         as follows:
<TABLE>
<CAPTION>
                                1996      1995
                               ------   --------
          Assets
          ------
<S>                            <C>      <C>
 
         Cash                  $    -   $    345
         Investment in land         -    801,216
                                -----   --------
                                $   -   $801,561
                                =====   ========
</TABLE>
CONTINUED ON NEXT PAGE

                                      -8-
<PAGE>
 
                            CONDEV LAND FUND II, LTD.
                        (A Florida Limited Partnership)

                         NOTES TO FINANCIAL STATEMENTS


Note 4.  Investment in Joint Venture - Continued

            Liabilities and Venturers' Capital
            ----------------------------------
<TABLE>
<CAPTION>
 
<S>                            <C>    <C>
         Liabilities           $  -   $  1,439
         Venturers' capital       -    800,122
                                ---   --------
                               $  -   $801,561
                                ===   ========
</TABLE>

         The Joint Venture had revenue of $300,900, $-0- and $-0- during the
         years ended December 31, 1996, 1995 or 1994, respectively, and net
         income (loss) for each year was $295,826, $(10,270) and $(10,280)
         respectively.

Note 5.  Allocations and Distributions to Partners

         Operations (excluding land sales)
         -------------------------------- 

           Pursuant to the partnership agreement, cash flow and profits and
           losses from operations are allocated and distributed 99% to the
           limited partners and 1% to the general partner. No distributions
           attributable to cash flow were made during the years ended December
           31, 1996, 1995 or 1994.

         Land sales
         ----------

           With respect to disposition of parcels of land, the allocations and
           distributions shall be made as follows:

           1. To the limited partners, an amount equal to the Partnership's cost
              of the parcel disposed of.

           2. To the limited partners, an amount equal to real estate taxes, and
              organization and syndication expenses allocable to the parcel
              disposed of.

           3. To the limited partners, an amount equal to 10% per year non-
              compounded return on such distributions minus previous
              distributions of cash flows.
 
           4. To the general partner and limited partners, 20% and 80%,
              respectively, of the net cash proceeds after the above
              distributions.


CONTINUED ON NEXT PAGE

                                      -9-
<PAGE>
 
                            CONDEV LAND FUND II, LTD.
                        (A Florida Limited Partnership)

                         NOTES TO FINANCIAL STATEMENTS


Note 5.  Allocations and Distributions to Partners - Continued

         Land sales - Continued
         ----------------------

           For purposes of making the above described computations, the
           Partnership books will be deemed to close as of the month-end closest
           to the date of sale.

           The limited partners received distributions of $2,965,000, $-0- and
           $1,221,718 attributable to net cash proceeds from the sales of land
           during the years ended December 31, 1996, 1995 and 1994,
           respectively.


Note 6.  Related Party Transactions

         The partnership agreement permits the general partner or its affiliates
         to receive an acquisition fee or a real estate commission from sellers
         in an amount not to exceed 5% of the gross purchase price of land
         purchased by the Partnership, so long as the total acquisition fee,
         including that paid to unaffiliated parties, does not exceed 10% of the
         gross purchase price. No acquisition fees were paid during the years
         ended December 31, 1996, 1995 or 1994, as no properties were purchased.

         When properties are sold, an affiliate of the general partner may be
         paid real estate commissions in amounts customarily charged by others
         rendering similar services, with such commissions, plus commissions
         paid to nonaffiliates, not to exceed 10% of the gross sales price. In
         connection with the two land sales during 1996, real estate commissions
         of 10% and 5.8%, respectively, were paid to nonaffiliates. No real
         estate commissions were paid during 1995 with respect to sales, as no
         sales occurred. In connection with the land sale during 1994, a 10%
         real estate commission was paid to a nonaffiliate.

         The general partner is obligated to loan up to $100,000 to the
         Partnership during its term to meet working capital requirements.  No
         such loans were made to the Partnership during the years ended December
         31, 1996, 1995 or 1994.

         The general partner earned certain fees for administration and
         management services provided, pursuant to the partnership agreement.
         Such fees amounted to $11,676 for each of the years ended December 31,
         1996, 1995 and 1994.

                                      -10-
<PAGE>
 
                                                            February 12, 1997
1996 Annual Report

Dear Limited Partner:

Enclosed is Schedule K-1 (Form 1065) relating to the Fund's operations for the
year ended December 31, 1996.

The financial statement, on the reverse side hereof, shows net income for the
year ended December 31, 1996 of $842,315.  The primary source of the net income
was profit on the sale of two parcels of land which occurred during the year.
In April the Partnership closed on the sale of its property located on McCulloch
Road in Seminole County.  In  June, the Partnership concluded the sale of its
17.75 acre parcel of land located on U.S. Highways 441/27 near the Lake County
Mall in Lake County, Florida.  As of December 31, 1996, the partnership owned or
had an interest in three parcels of land.  The net book value per limited
partner unit as of December 31, 1996 was $105.70.  Distributions to limited
partners for the year totalled $2,965,000.

On November 19, 1996 the Partnership entered into an Agreement of Sale relating
to the 9.2 (plus over minus) acre parcel at Alafaya Trail and McCulloch Road
with a well-known developer who intends to construct a retail center on the
site. The Agreement calls for an inspection period of 90 days, followed by a
period of 180 days to obtain all required regulatory approvals for development
of the site. Closing is scheduled for mid-August, assuming all required
approvals are in place by that date.

The contract for sale of the Partnership's parcel located in Maitland, Seminole
County was allowed to expire after the prospective buyer requested yet another
extension but without additional consideration to the partnership.  As a result,
the Partnership retained the buyer's escrow deposit and has placed the property
back on the market.

In a hearing before a Special Master, the Partnership was successful in
reconfirming the zoning and land uses for its 111-acre parcel on U.S. Highway 27
in Lake County. The County agreed to existing zoning and land uses and to
confirm vesting of development rights for the property for a period of 4 years.

We are working closely with several interested prospects and hope that one or
more of the properties owned by the Partnership will be concluded during the
coming year.

Sincerely yours,

CONDEV ASSOCIATES