<PAGE>   1
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

[X]    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
       EXCHANGE ACT OF 1934

                  FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2000

                                       OR

[ ]    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
       EXCHANGE ACT OF 1934

          FOR THE TRANSITION PERIOD FROM ____________ TO ____________.

                          COMMISSION FILE NUMBER 1-9885

                             LEGEND PROPERTIES, INC.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

            DELAWARE                                      36-3465359
   (STATE OR OTHER JURISDICTION OF                     (I.R.S. EMPLOYER
    INCORPORATION OR ORGANIZATION)                      IDENTIFICATION NO.)


3755 7TH TERRACE, SUITE 301, VERO BEACH, FLORIDA            32960
  (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)                (ZIP CODE)

        REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (561) 778-0180

                                 ---------------

       Indicate by check mark 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 [ ].

            Shares of common stock outstanding as of May 12, 2000:  6,290,874.



<PAGE>   2


                                TABLE OF CONTENTS

                         PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

        Condensed Consolidated Balance Sheets at March 31, 2000 (unaudited)
        and December 31, 1999.................................................3

        Condensed Consolidated Statements of Operations for the Three Months
        Ended March 31, 2000 and 1999 (unaudited).............................4

        Condensed Consolidated Statements of Cash Flows for the Three Months
        Ended March 31, 2000 and 1999 (unaudited).............................5

        Notes to Condensed Consolidated Financial Statements (unaudited)......6

Item 2. Management's Discussion and Analysis of Financial Condition and
        Results of Operations.................................................8

Item 3  Quantitative and Qualitative Disclosures about Market Risks..........14

                           PART II - OTHER INFORMATION

Item 1. Legal Proceedings....................................................15

Item 6. Exhibits and Reports of Form 8-K.....................................16

Signatures...................................................................17


                                       2
<PAGE>   3


                         PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                    LEGEND PROPERTIES, INC. AND SUBSIDIARIES
                      (A SUBSIDIARY OF RGI HOLDINGS, INC.)
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                      MARCH 31, 2000 AND DECEMBER 31, 1999
                                   (UNAUDITED)

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------------------
                                                                                                   2000                  1999
---------------------------------------------------------------------------------------------------------------------------------
                                                Assets
                                               --------

<S>                                                                                         <C>                        <C>
Real estate inventory                                                                       $   71,461,811             75,806,841
Cash and cash equivalents                                                                        2,250,482              2,902,359
Restricted cash and investments                                                                 12,045,787             10,602,370
Accounts and notes receivable                                                                    4,344,083              3,106,856
Property and equipment, net                                                                     22,458,316             22,869,703
Intangible assets, net                                                                           1,407,957              1,446,007
Other assets, net                                                                                7,072,531             10,954,824
                                                                                            -------------------------------------
                                                                                            $  121,040,967            127,688,960
                                                                                            =====================================
                                  Liabilities and Stockholders' Equity
                                  ------------------------------------

Notes payable to banks and others                                                           $   18,736,042             21,587,213
Payables to related parties                                                                     86,091,128             88,661,961
Accounts payable                                                                                 2,832,807              3,354,368
Other notes and liabilities                                                                     13,235,363             12,785,204
                                                                                            -------------------------------------
                                                                                               120,895,340            126,388,746
                                                                                            -------------------------------------

Stockholders'equity :
      Common stock, $.01 par value.  Authorized 10,000,000 shares;
        6,311,678 shares issued and 6,290,874 shares outstanding                                    63,117                 63,117
      Additional paid-in capital                                                                44,171,103             44,171,103
      Accumulated deficit                                                                      (43,967,277)           (42,812,690)
      Treasury stock, 20,804 shares                                                               (121,316)              (121,316)
                                                                                            -------------------------------------
                                          Total stockholders' equity                               145,627              1,300,214
                                                                                            -------------------------------------
                                                                                            $  121,040,967            127,688,960
                                                                                            =====================================
</TABLE>


See accompanying notes to the Condensed Consolidated Financial Statements


                                       3
<PAGE>   4



                     LEGEND PROPERTIES INC. AND SUBSIDIARIES
                      (A SUBSIDIARY OF RGI HOLDINGS, INC.)
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
               FOR THE THREE MONTHS ENDED MARCH 31, 2000 AND 1999
                                   (UNAUDITED)

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------------
                                                                                                    2000                 1999
-----------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                         <C>                       <C>
Revenues:
      Real estate sales                                                                     $     13,327,228          15,023,361
      Club operations                                                                              2,726,439           2,188,669
      Patient services                                                                               695,104             694,157
      Other                                                                                          431,330             746,926
                                                                                            ------------------------------------
                                   Total revenues                                                 17,180,101          18,653,113
                                                                                            ------------------------------------

Operating costs and expenses:
      Real estate sales                                                                           10,250,207          10,990,730
      Club operations                                                                              2,255,907           2,150,668
      Patient services                                                                               515,636             504,724
      Other                                                                                          503,587             575,243
      Selling, general and administrative                                                          2,731,173           5,216,127
      Depreciation and amortization                                                                  417,896             446,524
                                                                                            ------------------------------------

                                 Total operating costs and expenses                               16,674,406          19,884,016
                                                                                            ------------------------------------

Operating income (loss)                                                                              505,695          (1,230,903)
                                                                                            ------------------------------------

Other income (expense):
      Interest income                                                                                113,118             206,835
      Interest expense, including loan cost amortization                                            (208,291)           (840,489)
      Interest expense, related party                                                             (2,186,809)         (1,878,293)
                                                                                            ------------------------------------

                                 Net other expense                                                (2,281,982)         (2,511,947)
                                                                                            ------------------------------------

Loss before income tax benefit                                                                    (1,776,287)         (3,742,850)

Income tax benefit                                                                                   621,700                   -
                                                                                            ------------------------------------

Net loss                                                                                    $     (1,154,587)         (3,742,850)
                                                                                            ====================================

Net loss per share -- basic and diluted                                                     $          (0.18)              (0.59)
                                                                                            ====================================

Weighted average number of common shares outstanding                                               6,290,874           6,290,874
================================================================================================================================
</TABLE>

See accompanying notes to the Condensed Consolidated Financial Statements


                                       4
<PAGE>   5


                    LEGEND PROPERTIES, INC. AND SUBSIDIARIES
                       (A SUSIDIARY OF RGI HOLDINGS, INC.)
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
               FOR THE THREE MONTHS ENDED MARCH 31, 2000 AND 1999
                                   (UNAUDITED)

<TABLE>
<CAPTION>

--------------------------------------------------------------------------------------------------------------------------------
                                                                                                      2000              1999
--------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                            <C>                    <C>
Cash flows from operating activities:
            Net loss                                                                           $   (1,154,587)        (3,742,850)
            Adjustments to reconcile net loss to net cash used in operating activities:
                  Depreciation and amortization                                                       417,896            446,524
                  Amortization of loan costs                                                           45,778            101,323
                  Related party interest expense not paid                                           2,186,809          1,878,293
                  Loss on sale of property and equipment                                                1,140              9,063
                  Deferred tax benefit                                                               (621,700)                 -
            Change in certain assets and liabilities:
                  Decrease in real estate inventory and assets for sale                             4,345,030          3,399,522
                  Decrease (increase) in accounts and notes receivable and
                         other assets                                                               3,220,988           (473,919)
                  Decrease in accounts payable and other notes
                         And liabilities                                                              (71,402)        (1,326,230)
                                                                                               ---------------------------------
            Net cash provided by operating activities                                               8,369,952            291,726
                                                                                               ---------------------------------

Cash flows from investing activities:

                (Increase) decrease  in restricted cash and investments                            (1,443,417)         7,847,216
                Proceeds from sale of property and equipment                                          168,534            560,499
                Purchase of property and equipment                                                   (138,133)          (225,543)
                                                                                               ---------------------------------
            Net cash (used in) provided by investing activities                                    (1,413,016)         8,182,172
                                                                                               ---------------------------------

Cash flows from financing activities:

                Proceeds from notes payable to bank and others                                      2,987,747          4,353,857
                Repayment of notes payable to bank and others                                      (5,838,918)       (12,211,832)
                Repayment of loans from related parties                                            (4,757,642)                 -
                Payment of loan fees and other                                                              -            (88,303)
                                                                                               ---------------------------------

            Net cash used in financing activities                                                  (7,608,813)        (7,946,278)
                                                                                               ---------------------------------
Net (decrease) increase in cash and cash equivalents                                                 (651,877)           527,620

Cash and cash equivalents at beginning of period                                                    2,902,359          4,446,864
                                                                                               ---------------------------------
Cash and cash equivalents at end of period                                                     $    2,250,482          4,974,484
                                                                                               =================================
Supplemental Disclosure of Cash Flow Information:
      Cash paid during the period for interest, net of amount
      capitalized of $265,068 in 2000 and $270,175 in 1999                                     $      204,586            719,158
================================================================================================================================
</TABLE>

See accompanying notes to the Condensed Consolidated Financial Statements


                                       5
<PAGE>   6



                    LEGEND PROPERTIES, INC. AND SUBSIDIARIES
                      (A SUBSIDIARY OF RGI HOLDINGS, INC.)
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)
                                 MARCH 31, 2000

1.     BASIS OF PRESENTATION

Legend Properties, Inc. (the Company or Legend) formerly known as Banyan
Mortgage Investment Fund (Banyan), is the surviving corporation from the
December 31, 1996 merger (the Merger) with RGI U.S. Holdings, Inc. (RGI/US).
Prior to the Merger, RGI/US was a wholly-owned subsidiary of RGI Holdings, Inc.
(Holdings).

As of March 31, 2000, Holdings owns appproximately 80% of the outstanding common
shares of the Company. On October 15, 1999, the Company received a proposal from
Holdings for the merger of the Company with a wholly-owned subsidiary of
Holdings. The Company's Board of Directors established a special committee to
evaluate and consider the proposal. On January 6, 2000 the Board of Directors
approved a merger and the Company and Holdings executed a Merger Agreement where
Holdings will acquire all of the outstanding shares, not currently held by
Holdings, for $0.50 per share in cash. The merger is subject to, among other
things, approval by the shareholders and compliance with all applicable
regulatory and governmental requirements.

The condensed consolidated financial statements include the accounts of Legend
and its subsidiaries . In the opinion of management, the accompanying unaudited
condensed consolidated financial statements contain all adjustments (consisting
of only normal recurring adjustments) necessary to present fairly the financial
position, results of operations and cash flows for the periods presented. All
significant intercompany accounts and transactions have been eliminated in
consolidation.

These condensed consolidated financial statements should be read in conjunction
with the consolidated financial statements and the related disclosures contained
in the Company's Annual Report on Form 10-K for the year ended December 31,
1999, filed with the Securities and Exchange Commission.

The results of operations for the three months ended March 31, 2000 are not
necessarily indicative of the results to be expected for the full fiscal year.

2.     LIQUIDITY

As of March 31, 2000, the Company's debt obligations, including payables to
related parties of $86,091,128, totaled $104,827,170 of which $4,221,138 matures
by December 31, 2000. None of these maturities relate to payables to related
parties. In addition to the debt maturities under existing financings, the
Company requires additional financing to advance its business plan. As of March
31, 2000, the Company had $2,250,482 of cash and cash equivalents, which will
not be sufficient to fund these obligations.

The Company expects to meet its existing debt obligations that mature during
2000 by the renewal and extension of existing construction lines, and internally
generated funds from real estate sales and operations. Based on alternatives
available, management believes that sufficient funds will be available to meet
its obligations during 2000. If sufficient funds are not available from the
above sources, the Company anticipates delaying certain quarterly interest
payments to Holdings as allowed under the debt agreements. The Company also has
available, if needed, a $5 million credit facility from Holdings, which was
unused at March 31, 2000.


                                       6
<PAGE>   7


For future construction and development activities, the Company anticipates
utilizing existing construction lines or securing additional construction lines
or development financing as noted above. Once construction lines or development
financing are secured, they are typically renewed on an annual basis.

There can be no assurance that the Company will be able to secure the necessary
construction and development financing to implement its plan or that, if
available, the terms and conditions will be acceptable to the Company. If the
Company is unable to secure the necessary additional financing or capital when
needed, the plans for its projects will likely be materially revised, which
would have a material adverse effect on the Company's financial condition and
results of operations.

3.     INCOME TAXES

Income tax benefit attributable to loss from continuing operations was $621,700
and $0 for the three months ended March 31, 2000 and 1999, respectively. All of
the $621,700 was deferred and is recorded in other assets at March 31, 2000.

The 2000 income tax benefit resulted from the anticipated to be realized
utilization of the Company's 2000 operating loss by an affiliated consolidated
tax group, pursuant to a Tax Sharing and Allocation Agreement.

4.     OPERATING SEGMENTS

The Company's reportable operating segments are distinct operations that service
differing markets. The real estate segment consists of the development,
construction and sales activities for all of the Company's properties. The club
operations segment consists of the clubhouse and related activities for Grand
Harbor and Oak Harbor. Patient services consist of the Royal Palm Convalescent
Center which offers skilled nursing care, and Somerset House which offers
assisted living care. Summarized information concerning the reportable segments
for the three months ended March 31, 2000 and 1999, is presented in the
following table.

Three Months Ended March 31, 2000 and 1999

<TABLE>
<CAPTION>
                                                                                    Other,
                                                                      Patient    Corporate and
              ($000's omitted)    Real Estate   Club Operations      Services     Eliminations        Total
=============================================================================================================
                  2000

<S>                                <C>               <C>               <C>           <C>            <C>
Revenues                           $ 13,327           2,727             695             431          17,180
Operating costs and expenses        (12,002)         (2,596)           (890)         (1,187)        (16,675)
Other income/ expenses               (1,279)              -             (76)           (305)         (1,660)
                                   -------------------------------------------------------------------------
Net income (loss)                  $     46             131            (271)         (1,061)         (1,155)
                                   =========================================================================

                  1999

Revenues                           $ 15,023           2,189             694             747          18,653
Operating cost and expenses         (13,792)         (2,946)           (881)         (2,265)        (19,884)
Other income/expenses                (2,172)            (43)            (63)           (233)         (2,511)
                                   -------------------------------------------------------------------------
Net income (loss)                  $   (941)           (800)           (250)         (1,751)         (3,742)
                                   =========================================================================
</TABLE>


                                       7
<PAGE>   8


ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
          RESULTS OF OPERATIONS

OVERVIEW

Legend Properties, Inc., formerly known as Banyan Mortgage Investment Fund (the
Company or Legend), is the surviving corporation from the December 31, 1996
merger (the Merger) of Banyan Mortgage Investment Fund (Banyan ) with RGI U.S.
Holdings, Inc. (RGI/US), a wholly owned subsidiary of RGI Holdings, Inc.
(Holdings).

The Company's strategy is to realize and enhance the market potential of its
remaining assets. The Company currently controls approximately 2,700 acres of
land in a master planned community (Southbridge), a residential golf community
(Grand Harbor), and a retirement community (Oak Harbor.)

Grand Harbor, including the Grand Harbor Golf and Beach Club, is a 772-acre
residential golf community located in Vero Beach, Florida. Oak Harbor, including
the Oak Harbor Club, Royal Palm Convalescent Center and Somerset House, is a
116-acre retirement community also located in Vero Beach, Florida. The Royal
Palm Convalescent Center and Somerset House are skilled nursing care and
assisted living facilities. Southbridge is a 2,685-acre master planned
development located in Prince William County, Virginia.

The Company is currently focused on continuing the development of
infrastructure, amenities, residential land parcels and residential units at
Grand Harbor, Oak Harbor and Southbridge consistent with approved zoning and
development plans. At Southbridge, the Company is attempting to rezone the
future phases of the project to allow continuation of its development plan. The
Company's ability to fully implement these objectives is dependent on, among
other things, securing short-term and long-term financing related to the
development on acceptable terms. There can be no assurance that the Company will
be able to obtain the necessary financing on acceptable terms, if at all.

Certain statements in this quarterly report that are not historical fact
constitute "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. Without limiting the foregoing, words
such as "anticipates," "expects," "intends," "plans" and similar expressions are
intended to identify forward-looking statements. These statements are subject to
a number of risks and uncertainties. For a discussion of the factors affecting
the Company's business plan, see the Company's 1999 Annual Report on Form 10-K
"Management's Discussion and Analysis - Factors Affecting Legend's Business
Plan." Actual results could differ materially from those projected in the
forward-looking statements. The Company undertakes no obligation to update these
forward-looking statements to reflect future events or circumstances.

LIQUIDITY AND CAPITAL RESOURCES

Historically, the Company has utilized internally generated funds, third party
borrowings and loans from related parties (primarily Holdings), to fund its
construction and development activities, and ongoing operating expenses.
Deferral of interest due to Holdings pursuant to the terms of the loan
agreements has also allowed the Company to maintain and preserve its liquidity
and capital resources.

As of March 31, 2000, the Company's debt obligations, including payables to
related parties of $86,091,128, totaled $104,827,170 of which $4,221,138 matures
by December 31, 2000 and an additional $5,368,366 by December 31, 2001. None of
these maturities relate to payables to related parties. In addition to the debt
maturities under existing financings, the Company requires additional financing
to advance its business plan. As of March 31, 2000, the Company had $2,250,482
of cash and cash equivalents, which will not be sufficient to fund these
obligations.



                                       8
<PAGE>   9


During the quarter ended March 31, 2000, the Company utilized existing cash and
cash equivalents and third party borrowings to fund its development and
construction activities.

During 2000, the Company contemplates continued expenditures for the development
of residential lots and construction of residential homes at Grand Harbor, Oak
Harbor and Southbridge, so that finished units and lots will be available during
2000 and beyond to satisfy existing real estate sales contracts. For Grand
Harbor and Oak Harbor, the Company anticipates utilizing existing construction
lines for the majority of the construction financing and securing additional
construction lines from existing third party lenders for the remainder. At
Southbridge, the Company must arrange for development financing.

The Company expects to meet its existing debt obligations that mature during
2000 by the renewal and extension of existing construction lines, and internally
generated funds from real estate sales and operations. Based on alternatives
available, Management believes that sufficient funds will be available to meet
its obligations during 2000. If sufficient funds are not available from the
above sources, the Company anticipates delaying certain quarterly interest
payments to Holdings as allowed under the debt agreements. The Company also has
available, if needed, a $5 million credit facility from Holdings, which was
unused at March 31, 2000.

For future construction and development activities, the Company anticipates
utilizing existing construction lines or securing additional construction lines
or development financing as noted above. Once construction lines or development
financing are secured, they are typically renewed on an annual basis.

There can be no assurance that the Company will be able to secure the necessary
construction and development financing to implement its plan or that, if
available, the terms and conditions will be acceptable to the Company. If the
Company is unable to secure the necessary additional financing or capital when
needed, the plans for its projects will likely be materially revised, which
would have a material adverse effect on the Company's financial condition and
results of operations. See the Company's 1999 Annual Report on Form 10-K
"Factors Affecting Legend's Business Plan".

For each of Legend's projects, cash flow generated from operations can differ
substantially from reported earnings, depending on the status of the development
cycle. At Southbridge, which is in the initial stages of development,
significant cash outlays are required for, among other things, land
acquisitions, processing zoning and other regulatory approvals, construction of
amenities, sales facilities, major roads, utilities, general landscaping and
debt service. Since a major part of these initial expenditures is capitalized,
income reported for financial statement purposes during the initial years may
significantly exceed operating cash flow. At the Grand Harbor and Oak Harbor
properties, which have completed the initial stages of development, operating
cash flow can exceed earnings reported for financial statement purposes, since
expenses include charges for substantial amounts previously capitalized.

Three Months Ended March 31, 2000

The Company had cash and cash equivalents of $2,250,482 and $2,902,359 at March
31, 2000 and December 31, 1999, respectively. The decrease during the three
months ended March 31, 2000 is attributable to cash being used in investing and
financing activities of $1,413,016 and $7,608,813, respectively, which was
partially offset by $8,369,952 in cash provided by operating activities.

Cash Flows from Operating Activities: For the three month ended March 31, 2000,
the Company generated cash flow from operating activities of $8,369,952,
primarily due to the following:

-      A decrease in real estate inventory of $4,345,030, primarily due to the
       sale of 20 units at Grand Harbor, 6 units at Oak Harbor, and 26 finished
       residential lots and 200 unfinished residential lots at Southbridge,
       which reduced inventory by $8,970,829. These decreases were offset by
       additional development and construction costs of $4,625,799. Construction
       of residential units at Grand Harbor and Oak Harbor and


                                       9
<PAGE>   10



       development of residential lots at Southbridge continues so that finished
       units and lots will be available during the remainder of 2000 and beyond
       to satisfy existing contracts.

-      Related party interest expense of $2,186,809 that was accrued but not
       paid during the quarter in accordance with the terms of the related loan
       agreements.

-      A decrease in accounts and notes receivable and other assets and a
       decrease in accounts payable and other notes and liabilities of
       $3,220,988 and $71,402, respectively. The decrease in other assets is
       primarily attributable to the offset of related party receivable against
       the payable to related parties. Fluctuations in these accounts are
       generally due to the timing of the collection of accounts and notes
       receivable and the payment of certain liabilities, including trade
       accounts payable, advances from customers and prepaid expenses. These
       fluctuations can vary significantly from period to period depending on
       the timing of sale closings, and development and construction activities.
       Due to the nature of the Company's business, significant fluctuations in
       these operating assets and liabilities are not considered unusual.

-      Depreciation and amortization of $417,896 and amortization of loan costs
       of $45,778 related primarily to fixed asset depreciation and loan cost
       amortization for Grand Harbor and Oak Harbor.

Partially offset by the following:

-      A net loss of $1,154,587 due to substantial interest expenses, corporate
       overhead and operating losses at Oak Harbor and Southbridge, which were
       partially offset by an operating profit at Grand Harbor and the income
       tax benefit recorded. Grand Harbor's operating profit resulted from the
       sale of residential units which more than offset the operating losses
       generated from club operations. At Oak Harbor, operating losses from club
       and assisted living operations exceeded the operating profit generated
       from the sale of residential units. Residential lot sales at Southbridge
       were not sufficient for the project to cover its marketing and overhead
       costs which resulted in a slight operating loss.

-      Deferred tax benefit of $621,700 that was recorded but not received,
       related to the income tax benefit anticipated to be realized by the
       utilization of the Company's 2000 operating loss.

Cash Flows from Investing Activities: For the three months ended March 31, 2000,
the Company utilized $1,413,016 in cash flow from investing activities. Customer
deposits increased due to sales activity which increased restricted cash and
investments $1,443,417. Proceeds from sale of property and equipment totaled
$168,534 which relates to the Company's disposition of various equipment. Funds
were utilized for the purchase of $138,133 of property and equipment.

Cash Flows from Financing Activities: The Company used $7,608,813 in cash flows
from financing activities during the three months ended March 31, 2000.
Borrowings from third-party lenders used primarily to fund certain construction
and development costs at Grand Harbor and Oak Harbor totaled $2,987,747. Debt
repayments to third party lenders totaled $5,838,918, resulting from the sale of
residential units and club memberships at Grand Harbor and Oak Harbor. Debt
repayments to related parties totaled $4,757,642, attributable to the offset of
a related party receivable that was recorded from the utilization of prior year
tax losses in accordance with a Tax Sharing and Allocation Agreement.

Quarter Ended March 31, 1999

The Company had cash and cash equivalents of $4,974,484 and $4,446,864 at March
31, 1999 and December 31, 1998, respectively. The increase during the first
quarter of 1999 is attributable to cash provided by operating and investing
activities of $291,726 and $8,182,172, respectively, offset by $7,946,278 in
cash used in financing activities.


                                       10
<PAGE>   11


Cash Flows from Operating Activities: For the quarter ended March 31, 1999,
Legend's operating activities generated cash of $291,726, primarily due to the
following:

-      Depreciation and amortization of $547,847 related primarily to fixed
       asset depreciation and loan cost amortization for Grand Harbor and Oak
       Harbor.

-      Related party interest expense of $1,878,293 that was not paid pursuant
       to the terms of the loan agreements.

-      A decrease in real estate inventory of $3,399,522 caused primarily by the
       sale of 23 units at Grand Harbor, 9 units at Oak Harbor, and 40
       residential lots at Southbridge. These sales reduced inventory by
       $10,990,730. This reduction was offset by additional costs for
       construction and development of $7,591,208 as construction of residential
       units continued at Grand Harbor and Oak Harbor. Moreover, development
       activities continued at Southbridge so that finished lots would be
       available during 1999 and beyond to satisfy existing contracts.

Partially offset by the following:

-      Net losses of $3,742,850 due to substantial interest expenses, corporate
       overhead and operating losses at Oak Harbor, Southbridge and Ashburn,
       offset by an operating profit at Grand Harbor. Oak Harbor and Southbridge
       are in the initial phases of sales operations, while Ashburn incurred
       certain costs associated with holding the property during the period it
       has been held for sale without any revenues. Grand Harbor's operating
       profits have resulted from the timing of unit closing which are
       traditionally higher during the first quarter and better than expected
       sales results.

-      An increase in accounts and notes receivable and other assets of $473,919
       and a decrease in accounts payable and other notes and liabilities of
       $1,326,230. Fluctuations in these accounts are generally due to the
       timing of the payments or collections related to certain assets and
       liabilities, including trade accounts payable, advances from customers,
       prepaid expenses, and accounts and notes receivable. These fluctuations
       can vary significantly from period to period depending on the timing of
       closings, and construction and development activities. Due to the nature
       of the Company's business, significant fluctuations in these operating
       assets and liabilities are not considered unusual.

Cash Flows from Investing Activities: For the quarter ended March 31, 1999, the
Company generated cash flow from investing activities of $8,182,172. During the
first quarter of 1999, certain deposits that were held as collateral against a
bank loan were released and used to pay down that debt pursuant to a
renegotiated loan agreement. Moreover, customer deposits declined as a result of
sales activity which, when combined with the release of the deposit, caused a
decline in restricted cash and investments of $7,847,216. The Company also sold
a corporate housing unit for $560,499. All of this was offset by the purchase of
$225,543 of property and equipment.

Cash Flows from Financing Activities: The Company used $7,946,278 in cash for
financing activities during the first quarter of 1999. A total of $4,353,857 was
borrowed from third-party lenders which was used primarily to fund certain
construction and development costs of Grand Harbor and Oak Harbor. A substantial
portion of the debt repayments of $12,211,832 made during the first quarter of
1999 relate to the loan payment made from the release of the deposit that was
discussed previously. The remainder resulted from the sale of residential units
and club memberships at Grand Harbor and Oak Harbor.


                                       11
<PAGE>   12


RESULTS OF OPERATIONS

Results of operations for the three months ended March 31, 2000, consisted of
the consolidated revenues and expenses of Grand Harbor, Oak Harbor and
Southbridge, whereas the results of operations for the three months ended March
31,1999 consisted of the consolidated revenues and expenses of Grand Harbor, Oak
Harbor, Southbridge, and Ashburn. Ashburn's two parcels were acquired in March
1998 and April 1999 and sold during September 1999.

Three months ended March 31, 2000 compared with 1999

Total revenues for the three months ended March 31, 2000 and 1999 were
$17,180,101 and $18,653,113, respectively.

Real estate sales revenues decreased $1,696,133 for the three months ended March
31, 2000 as compared to 1999 due to a decline in sales at Grand Harbor, Oak
Harbor and Southbridge. Grand Harbor's sales declined from 23 units in 1999 to
20 units in 2000. The average sale price decreased from $425,000 to $369,000. At
Oak Harbor sales declined from 9 units to 6 units, at an average sale price of
$320,000 versus $434,000. Sales prices range from $165,000 to $1,100,000 at
Grand Harbor and Oak Harbor, and accordingly average sales prices may fluctuate
significantly from period to period.

Southbridge sold 26 finished residential lots at an average sales price of
approximately $47,000 during the first three months of 2000, as compared to 40
finished lots at an average sale price of $44,000 for the corresponding period
in 1999. In addition, 200 unfinished lots were sold in bulk at an average sale
price of $4,000. The decrease in finished lots sold resulted from delays in the
development of finished lots that would be available for delivery because of wet
weather and labor shortages experienced by certain contractors. Finished lot
sales prices range from $24,000 to over $65,000 at Southbridge and accordingly,
average sales prices may fluctuate from period to period.

Partially offsetting the decline in real estate sales revenues was the increase
in club operations revenues. Continued sales activities at both Grand Harbor and
Oak Harbor was the chief component in the rise of club membership and the
corresponding operating revenues between the three months ended March 31, 2000
and 1999.

Patient service revenues remained relatively unchanged in the three months ended
March 31, 2000, compared to the same period in 1999, due to fairly stable
patient levels.

A decline in selling, general and administrative costs was primarily responsible
for the decrease in operating costs and expenses between the three months ended
March 31, 2000 and 1999.

Gross margin as a percentage of real estate sales was 23% for the three months
ended March 31, 2000, compared to 27% for the comparable period in 1999. Gross
margins realized on the sale of residential units at Grand Harbor and Oak Harbor
may fluctuate significantly depending upon the type of product sold. Changes in
the mix of product types sold accounts for the decline in the gross margin
between 2000 and 1999.

Club operations costs and expenses increased $105,239 between 1999 and 2000.
This increase is chiefly due to the increase in club operations that was
discussed earlier. Club operations for Grand Harbor are an amenity provided to
Grand Harbor residences in order to promote real estate sales, while the Oak
Harbor Club is in its initial stages of operations. Profitability of these
operations can vary from period to period depending upon sales volume and
operating costs, which are linked to factors such as the seasonal nature of
their usage depending on the time of year, overall membership levels, and
similar factors.


                                       12
<PAGE>   13


Patient services costs and expenses remained relatively constant between 1999
and 2000 which is attributable to stable patient levels.

Selling, general and administrative decreased $2,484,954 between 1999 and 2000
due primarily to a decrease in marketing costs as well as a reduction of payroll
related costs. Also contributing to the decline was the elimination of the costs
of holding Ashburn which was sold during 1999. Certain incentive compensation
decreased in 2000 as compared to 1999 and $600,000 in severance and relocation
costs were recorded in 1999 that were not present in the 2000 expenses.

Total other expense decreased primarily due to a reduction of third party
interest expense between 1999 and 2000. Interest expense declined due to a net
reduction in external indebtedness that was attributable to the repayment of the
Ashburn loan upon it's sale in September 1999 and sales of residential units at
Grand Harbor and Oak Harbor. The increase in related party interest expense
between 1999 and 2000 is due to the higher outstanding loan payable to related
parties which is attributable to the capitalization of unpaid interest on these
advances into the loan payable balance on December 31, 1999.

The combination of the above changes resulted in a net loss of $1,154,587 ($0.18
per share) for the three months ended March 31, 2000, as compared to a net loss
of $3,742,850 ($0.59 per share) for the three months ended March 31, 1999.


                                       13
<PAGE>   14



ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

The Company is exposed to market risks associated with interest changes on the
debt used to fund its construction, development, and operating activities. The
Company's interest rate risk management objective is to limit the impact of
interest rate changes on earnings and cash flow and to lower overall borrowing
costs. The Company uses a mixture of fixed rate debt, interest rate swap
agreements, and offsetting financial instruments such as annuity contracts to
mitigate this risk. The Company does not enter into other derivative financial
instruments for speculative purposes.

The Company's interest rate risk is monitored by management. The table below
presents the principal amounts, weighted-average interest rates and fair values
required to evaluate the expected cash flows of the Company under debt and
related agreements and its sensitivity to interest rate changes at March 31,
2000.

<TABLE>
<CAPTION>


                                                                                                      There                  Fair
         (000,000's omitted)                  2000        2001       2002        2003       2004     -after        Total     Value
----------------------------------------------------------------------------------------------------------------------------------
<S>                                          <C>         <C>        <C>         <C>        <C>        <C>         <C>        <C>
Fixed rate debt                                0.3         0.3        0.4         0.4        0.5        2.5         4.4        4.4
Average interest rate                         6.3%        6.3%       6.3%        6.3%       6.3%       6.3%

Variable rate LIBOR debt                       0.1         0.2        0.2        32.8        0.0        0.0        33.3       33.3
Average interest rate                         8.9%        8.9%       8.9%        8.9%       0.0%       0.0%

Variable rate prime debt                       2.0         2.3        0.0        56.5        0.0        0.0        60.8       60.8
Average interest rate                        10.8%       10.9%       0.0%       10.9%       0.0%       0.0%

Variable rate bank cost of funds debt          1.8         2.6        1.9         0.0        0.0        0.0         6.3        6.3

Average interest rate                         8.4%        8.4%       8.4%        0.0%       0.0%       0.0%

</TABLE>

The table incorporates those exposures that exist as of March 31, 2000, and does
not consider those exposures or positions which could arise after that date. As
a result the Company's cost of funds with respect to interest rate fluctuations
will depend on the exposures that arise after March 31, 2000, the Company's
hedging strategy during that period and interest rates.


                                       14
<PAGE>   15


                           PART II - OTHER INFORMATION

ITEM 1.   LEGAL PROCEEDINGS

Podboy

In April, 2000, Edward F. Podboy, Jr., the Company's former Chief Executive
Officer, filed a lawsuit in the United States District Court for the Eastern
District of Virginia against the Company. Mr. Podboy is seeking in excess of
approximately $1 million in damages against the Company for breach of contract
involving amounts that Mr. Podboy claims are due to him in connection with
serving as the Company's Chief Executive Officer. The Company believes that Mr.
Podboy's claims are without merit and intends to vigorously defend the lawsuit.

General Legal Matters

The Company is subject to various lawsuits arising in the ordinary course of
business. The Company is of the opinion that the outcome of any such lawsuits
will not have a material adverse effect on its operations.


                                       15
<PAGE>   16


ITEM 6.     EXHIBITS AND REPORTS ON FORM 8-K

       (a)     EXHIBITS:

<TABLE>

EXHIBIT NO.
-----------

<S>        <C>
3.1         Amended and Restated Certificate of Incorporation of the Registrant.(1)
3.2         Bylaws of Registrant, as amended and restated as of July 1, 1996.(2

10.1        Edward F. Podboy's Employment Contract dated March 31, 1998(3)

10.2        Credit Agreements, Notes and Warrants between Registrant and Morgens
            Waterfall, Vintiadis & Co, Inc.(4)

10.3        Loan Modification Agreement, dated as May 20, 1996, by and between
            Registrant and RGI Holdings, Inc. (SoGen Loan) (5)

10.4        Loan Modification Agreement, dated as of May 21, 1996, by and between
            Registrant and RGI Holdings, Inc. (Morgens Loan) (5

10.5        Registration Rights Agreement, dated as of May 21,1996, by and between
            Registrant and RGI Holdings,Inc. (5)

10.6        Second Stipulation and Agreement of Settlement, signed September 17,
            1997, In Re: Banyan Mortgage Investment Fund Shareholders Litigation.(6)

27.1        Financial Data Schedule

99.1        Form of Director Stock Option Agreements dated July 1, 1993, July 24,1994
            and July 7, 1995.(7)

99.2        Form of Executive Stock Option Agreements dated July 1, 1993, January 12,
            1994 and February 8, 1995.(7)
--------------------------------------------------------------------------------------------
</TABLE>

(1)    Incorporated by reference to the Registrant's Report on Form 10-K for the
       year ended December 31, 1996.

(2)    Incorporated by reference to the Registrant's Report on Form 10-Q for the
       quarter ended June 30, 1996.

(3)    Incorporated by reference to the Registrant's Report on Form 10-K for the
       year ended December 31, 1997.

(4)    Incorporated by reference to Exhibits 10(a) through 10(n) to the
       Registrant's Report on Form 10-k for the year ended December 31, 1994.

(5)    Incorporated by reference to the Registrant's Report on Form 8-K dated
       May 20, 1996.

(6)    Incorporated by reference to the Registrant's Report on Form 10-K for the
       quarter ended September 30, 1997.

(7)    Incorporated by reference to the Registrant's Report on Form 10-K for the
       year ended December 31, 1995.

       (b)    Reports on Form 8-K:

       The following reports on Form 8-K were filed during the quarter ended
       March 31, 2000:

       Current report on Form 8-K filed on January 13, 2000, disclosed the Board
       of Director approval of a merger of the Company with wholly owned
       subsidiary of Holdings.


                                       16
<PAGE>   17


                                   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.

Date:  May 17, 2000                LEGEND PROPERTIES. INC



                                   By: /s/ Peter J. Henn
                                   ---------------------
                                   Peter J. Henn
                                   President and Chief Executive Officer

                                   By: /s/ Robert B. Cavoto
                                   ------------------------
                                   Robert B. Cavoto
                                   Chief Financial Officer



                                       17