Edgar Filing: HMG COURTLAND PROPERTIES INC

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

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934

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HMG/COURTLAND PROPERTIES, INC.
(Name of Registrant as Specified In Its Charter)

N/A
(Name of Person(s) Filing Proxy Statement if other than the Registrant)

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HMG/COURTLAND PROPERTIES, INC.
1870 South Bayshore Drive
Coconut Grove, Florida 33133
---------------------------------------

NOTICE OF
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD SEPTEMBER 20, 2002
--------------------------------------

August 23, 2002
TO THE SHAREHOLDERS:

The annual meeting of shareholders of HMG/Courtland Properties, Inc.
(the "Company") will be held at 10:30 A.M., on Friday, September 20, 2002, at
the Grove Isle Club and Resort, 4 Grove Isle Drive, Coconut Grove, Florida for
the following purposes:

1. To elect a Board of Directors;

2. To act upon the renewal and amendment of the Advisory Agreement
between the Company and HMG Advisory Corp.;

3. To transact such other business as may properly come before the
meeting.

The record date for determining shareholders entitled to notice of and
to vote at the annual meeting is August 16, 2002.

Enclosed is a copy of the Company's Annual Report to Shareholders (Form
10-KSB) for the fiscal year ended December 31, 2001.

It is important, whether or not you plan to attend the meeting in
person, that you fill in, sign and date the accompanying proxy and return it
promptly in the postage prepaid envelope which is enclosed for your convenience.
The signing and mailing of the proxy will not affect your right to vote your
shares in person if you attend the meeting and desire to do so.

By Order of the Board of Directors

Lawrence I. Rothstein
President and Secretary

PROXY STATEMENT
OF
HMG/COURTLAND PROPERTIES, INC.

The accompanying proxy is solicited by the Board of Directors for use
at the annual meeting of shareholders and is being mailed with this Proxy
Statement to all shareholders on August 23, 2002. If a proxy card is properly
signed and is not revoked by the shareholder, the shares of common stock of the
Company (the "Shares") represented thereby will be voted at the meeting in
accordance with the instructions, if any, of the shareholder. If no instructions
are given, they will be voted for the election of Directors nominated by the
Board of Directors and for approval of the amendment and renewal of the advisory
agreement (the "Advisory Agreement") between the Company and HMG Advisory Corp.
(the "Advisor"). Any shareholder may revoke his proxy at any time before it is
voted by giving written notice of revocation to the Secretary of the Company.

Holders of Shares of record at the close of business on August 16, 2002
are entitled to notice of and to vote at the meeting. On that date, there were
1,089,135 Shares outstanding. Each Share is entitled to one vote on all business
of the meeting. The holders of a majority of the outstanding Shares, present in
person or represented by proxy, will constitute a quorum at the meeting.
Abstentions and broker non-votes are counted for purposes of determining the
presence or absence of a quorum for the transaction of business. Abstentions are
counted in tabulations of the votes cast on proposals presented to stockholders,
whereas broker non-votes are not counted for purposes of determining whether a
proposal has been approved. As of August 16, 2002, Transco Realty Trust
("Transco"), 1870 South Bayshore Drive, Coconut Grove, Florida 33133, was the
beneficial owner of 477,300 Shares, or 44% of the outstanding Shares, and
Emanuel Metz, CIBC Oppenheimer Corp., One World Financial Center, 200 Liberty
Street, New York, New York 10281, was the beneficial owner of 59,500 Shares, or
5% of the outstanding Shares. Beneficial ownership is based on sole voting and
investment power.

The Company has been advised by its officers and nominees for
directors, and their affiliated shareholders, Transco, Courtland Group, Inc.
("CGI") and T.G.I.F. Texas, Inc. ("T.G.I.F.") that they intend to vote for the
election of each of the nominees and for the approval of the Advisory Agreement.
Such shareholders own in the aggregate 634,430 shares, or 58% of the outstanding
Shares. As a result, each of the nominees is expected to be elected as a
Director and the Advisory Agreement is expected to be approved. As noted below,
certain Directors of the Company are affiliated with principal shareholders of
the Company and are principal shareholders, directors and officers of the
Advisor. See "Election of Directors" below for information concerning holders
who may be deemed to own beneficially more than 5% of the outstanding Shares.

ELECTION OF DIRECTORS

The entire Board of Directors will be elected at the annual meeting of
shareholders to serve until the next annual meeting of shareholders and until
the election and qualification of their successors. In the event any nominee
should not continue to be available for election, proxies may be voted for the
election of a substitute nominee or the Board of Directors may elect to reduce
the number of Directors. The Board of Directors has no reason to anticipate that
any nominee will not be available for election. All of the nominees have been
elected previously by the shareholders.

An affirmative vote by the holders of a majority of the Shares present
in person or by proxy at the Annual Meeting of Shareholders is required for the
election of each Director.

Set forth below is certain information about each current Director,
each nominee for Director and the Shares held by all Directors and executive
officers.

Shares Held as of a June 21, 2002
---------------------------------

Principal Occupation or Additional Shares in
Name, Age, Year First Employment During the Past Shares Owned by which the Nominee
Became a Director or Five Years Other than with the Nominee or has, or Participates Total Shares and
Officer of the the Company and Other Members of His in, the Voting or Percent of
Company Information Family (1) Investment Power(2) Class
----------- ----------- ------------ ------------------- ------------------

Maurice Wiener Chairman of the Board 65,100(4) 541,830(3) 606,930
60-1974 and Chief Executive Officer 52%
Chairman of the Board of the Advisor; Executive
of Directors, and Trustee, Transco Realty
Chief Executive Trust; Director, T.G.I.F.
Officer Texas, Inc.; Chairman of the
Board and Chief Executive
Officer of CGI

Lawrence I. Rothstein Director, President, 50,000(4) 541,830(3) 591,830
49-1983 Treasurer and Secretary of 50%
Director, President, Advisor; Trustee and
Treasurer and Vice-President of Transco;
Secretary Director, President, and
Secretary of CGI;
Vice-President of T.G.I.F.
Texas, Inc.

Walter G. Arader President, Arader, Herzig 15,400(4) 0 15,400
83-1977 and Associates, inc. 1%
Director (financial and management
consultants); Director,
United Video, Inc.; Former
Secretary of Commerce,
Commonwealth of Pennsylvania

Shares Held as of a June 21, 2002
---------------------------------

John B. Bailey Real estate consultant; 12,100(4) 0 12,100
75-1971 Retired CEO, Landauer *
Director Associates, Inc. (real
estate consultants)
(1977-1988)

Harvey Comita Business, Consultant; 10,000(4) 477,300(5) 487,300
72-1992 Trustee, Transco Realty 41%
Director Trust; President and
Director of Pan-Optics, Inc.
(1971-1991); Director of
Mediq, Incorporated
(1981-1991)

All 7 Directors and 178,600(4) 541,830(3) 720,430
Executive Officers as 61%
a Group

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

* Less than one percent

(1) Unless otherwise indicated, beneficial ownership is based on sole voting
and investment power with respect to the Shares.

(2) Shares listed in this column represent Shares held by entities with which
the Directors or officers are associated. The Directors, officers and
members of their families have no ownership rights in the Shares listed in
this column. See note 3 below.

(3) This number includes the number of Shares held by Transco (477,300 Shares),
CGI (54,530 shares) and T.G.I.F. Texas, Inc. ("T.G.I.F.") (10,000 shares).
Several of the Directors of the Company are directors, trustees, officers
or shareholders of Transco, CGI and T.G.I.F.

(4) This number includes shares subject to options granted under the 2000 Stock
Option Plan as follows: Mr. Wiener, 30,000; Mr. Rothstein, 25,000; 5,000
each to Mr. Arader, Mr. Bailey, and Mr. Comita; and a total of 16,000 to
two officers who are not directors. Reference is made to "Compensation of
Directors and Executive Officers and Other Transactions" for further
information about the 2000 Stock Option Plan.

(5) This number represents the number of shares held by Transco, of which Mr.
Comita is a Trustee.

Mr. Wiener is the executive trustee of Transco and holds 37% of its
stock. Mr. Wiener is also director and officer of CGI which owns 32% of
Transco's stock. Mr. Wiener is Chairman of the Board, Chief Executive Officer
and a 65% shareholder of CGI. Mr. Wiener is a director and 18% shareholder of
TGIF. Mr. Wiener is the cousin of Bernard Lerner, Vice President of the Company
and Vice President of the Advisor.

For information concerning relationships of certain directors and
officers of the Company to the Advisor, see "Amendment and Approval of Advisory
Agreement."

As a result of these relationships, the persons named above may be
deemed to share investment power and voting power of Shares held by each firm
with which they are associated in conjunction with a number of other persons,
including in several cases, persons who are neither directors nor officers of
the Company.

Meetings of the Board of Directors

The Board of Directors held four meetings during 2001. During this
period all of the Directors of the Company attended at least 75% of the total
number of meetings of the Board and any Committee of which they were a member.

Committees of the Board of Directors

The Board of Directors has an Audit Committee and a Stock Option
Committee. The Company does not have a Compensation Committee or a Nominating
Committee.

Messrs. Arader, Bailey and Comita serve as members of the Stock Option
Committee. The Committee is authorized to grant options to officers and key
employees of the Company. The Stock Option Committee met once during 2001.

Report of Audit Committee. In accordance with a Charter (see Annex A)
adopted by the Company's Board of Directors, the Audit Committee assists the
Board of Directors in fulfilling its responsibility for oversight of the quality
and integrity of the Company's financial reporting processes. Management has the
primary responsibility for the financial statements and the reporting process,
including the system of internal controls. The independent auditors are
responsible for performing an independent audit of the Company's consolidated
financial statements in accordance with generally accepted auditing standards
and for issuing a report.

The primary responsibilities of the Audit Committee are to review the
annual financial statements of the Company and to examine and consider such
other matters in relation to the audit of the Company's accounts and in relation
to the financial affairs of the Company and its accounts as the Committee may,
in its discretion, determine to be desirable and in accordance with its Charter.
The Audit Committee met three times during 2001.

The Committee also held discussions with management and the independent
auditors. Management represented to the Committee that the Company's
consolidated financial statements were prepared in accordance with generally
accepted accounting principles, and the Committee has reviewed and discussed the
consolidated financial statements with management and the independent auditors.
The Committee discussed with the independent auditors matters required to be
discussed by Statement on Auditing Standards No. 61 (Communications with Audit
Committees).

The Committee also has discussed with the independent auditors the
auditors' independence from the Company and its management, including the
matters in the written disclosures required by the Independence Standards Board
Standard No. 1 (Independence Discussion with Audit Committees) and also
considered whether the performance of the non-audit related services included
below under "Fees of Accountants" is compatible with maintaining their
independence.

The Committee discussed with the Company's independent auditors the
overall scope and plans for the audit. The Committee meets with the independent
auditors, with and without management present, to discuss the results of their
examinations, the evaluations of the Company's internal controls and the overall
quality of the Company's accounting principles.

The aggregate fees billed by BDO Seidman LLP to the Company for the
year ended December 31, 2001 are as follows:

Fees of Accountants

Audit Fees, including review of quarterly financial statements........$ 75,000
Financial Information Systems Design and Implementation Fee........... -0-
All Other Fees
Audit Related................................................ -0-
Other(1).....................................................$ 45,000
Total All Other Fees ...............................$ 45,000
--------
Total Fees...................................................$120,000
--------
(1) Consists principally of fees related to tax compliance and planning.

In reliance on the reviews and discussions referred to above, the
Committee recommended to the Board of Directors, and the Board has approved,
that the audited financial statements of the Company for the two years ended
December 31, 2001 be included in the Company's Annual Report on Form 10-KSB for
the period ended December 31, 2001 for filing with the Securities and Exchange
Commission. The Committee has also recommended to the Board of Directors the
selection of BDO Seidman, LLP as the Company's independent auditors for 2002,
and the Board concurred in its recommendation.

The members of the Audit Committee are Walter Arader, Chairman, and
Harvey Comita. Messrs. Arader and Comita are independent members as defined in
Section 121(A) of the American Stock Exchange listing standards.

COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS

Executive officers receive no cash compensation from the Company in
their capacity as executive officers. Executive officers are eligible to receive
stock options pursuant to the Stock Option Plan.

Compensation of Directors. Each Director receives an annual fee of
$8,000, plus expenses and $500 for each meeting attended of the Board of
Directors.

Exercise and Grant of Options. The following table sets forth grants of
options to the executive officers during 2001. During 2001, the Stock Option
Committee granted to each other director an option to purchase 5,000 shares. No
options were exercised during 2001.

OPTION GRANTS IN LAST FISCAL YEAR
---------------------------------

Shares Subject to
Name Grant of Options(1)
---- -------------------

Maurice Wiener 30,000(2)
Chief Executive Officer

Lawrence I. Rothstein 25,000(2)
------
Director, President

TOTAL 55,000
--------
(1) These options were granted Mr. Wiener and Mr. Rothstein at an exercise
price of $8.33 and $7.57, respectively. The closing price for the Company's
Shares on the American Stock Exchange was $7.57 per Share on June 25, 2001,
the date of grant. All options expire on June 24, 2011.

(2) Represents 35% and 29%, respectively, of all options granted in last fiscal
year.

Section 16(a) Beneficial Ownership reporting Compliance. Section 16(a)
of the Securities Exchange Act of 1934, as amended, requires the Company's
directors and executive officers to file with the Securities and Exchange
Commission initial reports of beneficial ownership and reports of change in
beneficial ownership of the Company's Shares. Such officers and directors are
required by SEC regulations to furnish to the Company copies of all Section
16(a) reports that they file. Based solely on a review of the copies of such
forms furnished to the Company, or written representations that no other reports
were required, the Company believes that during 2001, its officers and directors
of the Company complied with all applicable Section 16(a) filing requirements.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The following discussion describes the organizational structure of the
Company's subsidiaries and affiliates.

Transco Realty Trust ("Transco")
--------------------------------

Transco is a publicly-held 44% shareholder of the Company. Mr. Wiener
is the executive trustee and an officer of Transco and holds approximately 34%
of Transco's stock. Mr. Rothstein serves as a trustee and an officer of Transco.
Mr. Comita serves as a trustee of Transco.

Courtland Group, Inc. ("CGI")
-----------------------------

CGI owns approximately 32% of Transco's stock and approximately 5% of
the Company's common stock. Mr. Weiner is Chairman of the Board and a 65%
shareholder of CGI. Mr. Rothstein serves as Director and president of CGI. CGI
served as the Company's investment advisor until December 31, 1997.

HMG Advisory Corp. (the "Advisor")
----------------------------------

The day-to-day operations of the Company are handled by the Advisor.
Reference is made to "Approval of Advisory Agreement" below for further
information about the duties and remuneration of the Advisor. The Advisor is
majority-owned by Maurice Wiener, its Chairman and CEO.

Courtland Investments, Inc. ("CII")
-----------------------------------

The Company owns a 95% non-voting interest in CII. The other 5% (which
represents 100% of the voting stock) is owned by a wholly-owned subsidiary of
Transco. In May 1998, the Company and the Transco subsidiary entered into a
written agreement in order to confirm and clarify the terms of their previous
continuing arrangement with regard to the ongoing operations of CII, all of
which provide the Company with complete authority over all decision making
relating to the business, operation, and financing of CII consistent with its
status as a real estate investment trust.

CII and its wholly-owned subsidiary own 100% of Grove Isle Club, Inc.
Grove Isle Yacht Club Associates and Grove Isle Marina, Inc. CII also owns 15%
of Grove Isle Associates, Ltd., and the other 85% is owned by the Company.

HMG-Fieber Associates ("Fieber")
--------------------------------

The Company owns a 70% interest in Fieber and the other 30% is owned by
NAF Associates ("NAF").

The following discussion describes all material transactions,
receivables and payables involving related parties. The Company believes that
all of the transactions described below were on terms as favorable to the
Company as comparable transactions with unaffiliated third parties.

The Advisor
-----------

As of December 31, 2001 and 2000 the Advisor owed the Company
approximately $191,000 and $155,000, respectively. Such sum bears interest at
the prime rate plus 1% and is due on demand.

Effective December 1, 1999, the Advisor began leasing its executive
offices from CII pursuant to a lease agreement. This lease agreement is at the
going market rate for similar

property and calls for base rent of $48,000 per year payable in equal monthly
installments. Additionally, the Advisor is responsible for all property
insurance, utilities, maintenance and security expenses relating to the leased
premises. The lease term is five years.

CGI
---

As of December 31, 2001 and 2000, CGI owed the Company $300,000 and
$278,000, respectively. Such sums bear interest at the prime rate plus 1% and
are due on demand.

CII - T.G.I.F. Texas, Inc.
--------------------------

CII owns approximately 49% of the outstanding shares of T.G.I.F. Texas,
Inc. ("T.G.I.F."). Mr. Wiener is a director and officer of T.G.I.F. and owns,
directly and indirectly, approximately 18% of the outstanding shares of T.G.I.F.
As of December 31, 2001 and 2000, T.G.I.F. had amounts due from Mr. Wiener in
the amount of approximately $718,000 and $672,000, respectively. These amounts
are due on demand and bear interest at the prime rate. Also, T.G.I.F. owns
10,000 shares of the Company. The Advisor receives a management fee of $18,000
per year from T.G.I.F.

As of December 31, 2001 and 2000 CII owed approximately of $3.7 million
and $3.6 million, respectively to T.G.I.F. All advances between CII and T.G.I.F.
are due on demand and bear interest at the prime rate plus 1%.

CII - Grove Isle
----------------

In 1986, CII acquired from the Company the rights to develop the marina
at Grove Isle for a promissory note of $620,000 payable at an annual rate equal
to the prime rate. The principal matures on January 2, 2006. Interest payments
are due each January 2. Because the Company consolidates CII, the note payable
and related interest income are eliminated in consolidation.

The Company holds a demand note due from CII bearing interest at the
prime rate plus 1% with an outstanding balance of $2,508,000 and $1,260,000 as
of December 31, 2001 and 2000, respectively. During 2001 and 2000, advances from
the Company to CII totaled $1,553,000 and $3,993,000, respectively. Repayments
from CII to the Company during 2001 and 2000 were $400,000 and $4,593,000,
respectively. Accrued and unpaid interest is capitalized and included in
advances. Because CII is a 95%-owned consolidated subsidiary of the Company, the
note payable and related interest are eliminated in consolidation.

The Company holds a demand note from Grove Isle Yacht Club Associates
(GIYCA, a wholly-owned subsidiary of CII) bearing interest at the prime rate
plus 2% with an outstanding balance as of December 31, 2001 and 2000,
respectively, of approximately $243,000 and $1,084,000. During 2001 and 2000
advances from the Company to GIYCA totaled $2,000 and $40,000 respectively.
Repayments from GIYCA to the Company during 2001 and 2000 were $897,000 and
$250,000, respectively. Accrued and unpaid interest is capitalized and included
in

advances. Because GIYCA is a wholly-owned subsidiary of CII, the note payable
and related interest are eliminated in consolidation.

Transco - South Bayshore Associates ("SBA")
-------------------------------------------

SBA is a joint venture in which Transco and the Company hold interests
of 25% and 75%, respectively. The major asset of SBA is a demand note from
Transco, bearing interest at the prime rate, with an outstanding balance of
approximately $453,000 in principal and interest as of December 31, 2001
compared to a balance of $452,000 as of December 31, 2000.

The Company holds a demand note from SBA bearing interest at the prime
rate plus 1% with an outstanding balance as of December 31, 2001 of
approximately $1,100,000, in principal and accrued interest, compared to a
balance of $1,000,000, in principal and accrued interest, as of December 31,
2000. No payments were made in 2001 and 2000, and accrued and unpaid interest
was not capitalized. Because the Company consolidates SBA, the note payable and
related interest income are eliminated in consolidation.

Exercised Stock Options and Related Promissory Notes
----------------------------------------------------

On August 24, 2000, certain officers and directors of the Company
exercised all of their stock options and purchased a total of 70,000 shares of
the Company's common stock for $358,750. The company received $70,000 in cash
and $288,750 in promissory notes for the balance. These promissory notes bear
interest at 6.18% per annum payable quarterly in arrears on the first day of
January, April, July and October. The outstanding principal is due on August 23,
2005 and the notes are collateralized by the stock.

APPROVAL OF AMENDMENT AND RENEWAL
OF THE ADVISORY AGREEMENT

The Advisory Agreement. At the 2001 annual meeting of shareholders, the
advisory agreement (the "Advisory Agreement") between the Company and HMG
Advisory Corp. (the "Advisor") was renewed for a one-year term expiring on
December 31, 2002. On March 22, 2002, the Board of Directors approved, subject
to shareholder approval, the amendment and renewal of the Advisory Agreement
between the Company and the Advisor for a term commencing January 1, 2003, and
expiring December 31, 2003.

The sole amendment to the Advisory Agreement that is being proposed at
the Annual Meeting is the increase in the remuneration of the Advisor to
increase the Advisor's current regular compensation monthly fee from $55,000 to
$75,000, or $660,000 to $900,000 annually. All other terms of the existing
Advisory Agreement will remain the same. The increase in remuneration of the
Advisor is being proposed by the Board after taking into account the increased
costs of the Advisor in managing the affairs of the Company, the economic
factors impacting the real estate industry and competitive conditions in today's
market place. The amendment and renewal was approved unanimously by the
Directors unaffiliated with the Advisor.

Under the terms of the Advisory Agreement, the amendment and renewal
must be approved by the holders of a majority of the Shares. If the shareholders
approve the Advisory Agreement, it will be amended and renewed for a one-year
term.

The Advisor is majority owned by Mr. Wiener with the remaining shares
owned by certain officers, including Mr. Rothstein. The officers and directors
of the Advisor are as follows: Maurice Wiener, Chairman of the Board and Chief
Executive officer; Lawrence I. Rothstein, President, Treasurer, Secretary and
Director; Carlos Camarotti, Vice President - Finance and Assistant Secretary;
and Bernard Lerner, Vice President.

The following description of the Advisory Agreement contains a summary
of its material terms.

General Provisions. The Advisory Agreement is not assignable without
the consent of the unaffiliated Directors of the Company and the Advisor. The
Advisory Agreement provides that officers, directors, employees and agents of
the Advisor or of its affiliates may serve as Directors, officers or agents of
the Company.

Duties of Advisor. The Advisor in performing its duties under the
Advisory Agreement is at all times subject to the supervision of the Directors
of the Company and has only such authority as the Directors delegate to it as
their agent. The Advisor counsels and presents to the Company investments
consistent with the objectives of the Company and performs such research and
investigation as the Directors may request in connection with the policy
decisions as to the type and nature of investments to be made by the Company.
Such functions include evaluation of the desirability of acquisition, retention
and disposition of specific Company assets. The Advisor also is responsible for
the day-to-day investment operations of the Company and conducts relations with
mortgage loan brokers, originators and servicers, and determines whether
investments offered to the Company meet the requirements of the Company. The
Advisor provides executive and administrative personnel, office space and
services required in rendering such services to the Company. To the extent
required to perform its duties under the Agreement, the Advisor may deposit into
and disburse from bank accounts opened in its own name any money on behalf of
the Company under such terms and conditions as the Company may approve.

Allocation of Expenses. Under the Advisory Agreement, the Advisor pays:
all salary and employment expenses of its own personnel and of the officers and
employees of the Company who are affiliates of the Advisor; all of the
administrative, rent and other office expenses (except those relating to a
separate office, if any, maintained by the Company) relating to its services as
Advisor; and travel (to the extent not paid by any party other than the Company
or the Advisor) and advertising expenses incurred in seeking investments for the
Company.

The Company is required to pay all expenses of the Company not assumed
by the Advisor, including, without limitation, the following: (a) the cost of
borrowed money; (b) taxes on income, real property and all other taxes
applicable to the Company; (c) legal, accounting, underwriting, brokerage,
transfer agent's, registrar's, indenture trustee's, listing, registration and
other fees, printing, engraving, and other expenses and taxes incurred in
connection with the issuance, distribution, transfer, registration and stock
exchange listing of the Company's

securities; (d) fees and expenses of advisors and independent contractors,
consultants, managers and other agents employed directly by the Company; (e)
expenses connected with the acquisition, disposition or ownership of mortgages
or real property or other investment assets, including, to the extent not paid
by any party other than the Company or the Advisor, but not limited to, costs of
foreclosure, costs of appraisal, legal fees and other expenses for professional
services, maintenance, repairs and improvement of property, and brokerage and
sales commissions, and expenses of maintaining and managing real property equity
interests; (f) the expenses of organizing or terminating the Company; (g) all
insurance costs (including the cost of Directors' liability insurance) incurred
in connection with the protection of the Company's property as required by the
Directors; (h) expenses connected with payment of dividends or interest or
distributions in cash or any other form made or caused to be made by the
Directors to holders of securities of the Company, including a dividend
reinvestment plan, if any; (i) all expenses connected with communications to
holders of securities of the Company and the other bookkeeping and clerical work
necessary in maintaining relations with holders of securities, including the
cost of printing and mailing checks, certificates for securities and proxy
solicitation materials and reports to holders of the Company's securities; (j)
to the extent not paid by borrowers from the Company, the expenses of
administering, processing and servicing mortgage, development, construction and
other loans; (k) the cost of any accounting, statistical, or bookkeeping
equipment necessary for the maintenance of the books and records of the Company;
(1) general legal, accounting and auditing fees and expenses; (in) salaries and
other employment expenses of the personnel employed by the Company who are not
affiliates of the Advisor, fees and expenses incurred by the Directors, officers
and employees in attending Directors' meetings, and fees and travel and other
expenses incurred by the Directors and officers and employees of the Company who
are not affiliates of the Advisor.

Expenses relating to the grant of options to all officers and employees
of the Company under a plan approved by the shareholders of the Company are
borne by the Company.

Remuneration of the Advisor. For services rendered under the current
advisory agreement, the Advisor is entitled to receive as regular compensation a
monthly fee equal to the sum of (a) $55,000 (equivalent to $660,000 per year)
and (b) 20% of the amount of any unrefunded commitment fees received by the
Company with respect to mortgage loans and other commitments which the Company
was not required to fund and which expired within the next preceding calendar
month. In 2001 and 2000, the Advisor's annual regular compensation amounted to
$660,000.

If the shareholders approve the amendment and renewal of the Advisory
Agreements, the Advisor's regular compensation will be increased to $75,000 per
month, or $900,000 per year, and will continue to receive the other additional
fee of 20% of the amount of any unrefunded commitment fees received by the
Company as outlined above. The Advisor will also continue to receive the
incentive compensation outlined below.

The Advisory Agreement also provides that the Advisor shall receive
incentive compensation for each fiscal year of the Company equal to the sum of
(a) 10% of the realized capital gains (net of accumulated net realized capital
losses) and extraordinary nonrecurring items of income of the Company for such
year, and (b) 10% of the amount, if any, by which Net

Profits of the Company exceed 8% per annum of the Average Net Worth of the
Company. "Net Profits" is defined as the gross earned income of the Company for
such period (exclusive of gains and losses from the disposition of assets),
minus all expenses other than non-cash charges for depreciation, depletion and
amortization and the incentive compensation payable to the Advisor, and minus
all amounts expended for mortgage amortization on long-term mortgage
indebtedness, excluding extraordinary and balloon payments. "Average Net Worth"
is defined as the average of the amount in the shareholders' equity accounts on
the books of the Company, plus the accumulated non-cash reserves for
depreciation, depletion and amortization shown on the books of the Company,
determined at the close of the last day of each month for the computation
period.

If and to the extent that the Company requests the Advisor, or any of
its directors, officers, or employees, to render services for the Company, other
than those required to be rendered by the Advisor under the Agreement, such
additional services are to be compensated separately on terms to be agreed upon
between such party and the Company from time to time, which terms must be fair
and reasonable and at least as favorable to the Company as similar arrangements
for comparable transactions of which the Company is aware with organizations
unaffiliated with the Advisor. The Advisor received $30,000 in 2000 and 2001 for
managing certain of the Company's affiliates.

Set forth below is the aggregate compensation paid to the Advisor
during the two fiscal years ended December 31, 2000 and 2001.

Form of Compensation Amount
-------------------- ------

2001 2000
---- ----

Regular Compensation $660,000(1) $ 660,000(1)

20% of Unrefunded Commitment Fees -0- -0-

Incentive $264,000 $ 333,000

Management Fees 30,000 30,000
-------- ----------

Total $954,000 $1,023,000
-------- ----------

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

(1) If the amended Advisory Agreement had been in effect during the years 2001
and 2002, the Advisor's regular compensation would have amounted to
$900,000 in each year.

Brokerage Fees Paid the Advisor. Under the Advisory Agreement, the
Advisor and its affiliates are prohibited from receiving from the Company any
brokerage or similar fees for the placement of mortgages or other investments
with the Company. However, the Advisor and its affiliates can receive normal
brokerage commissions from borrowers in connection with transactions involving
the Company, provided that such commissions are fully disclosed to all Directors
of the Company and the Directors approve of the transaction and that such
commissions (which to the extent paid by the borrower and retained by the
Advisor or its affiliates may reduce the yield to the Company) are fair and
reasonable and in accord with the prevailing rates in the locality in which the
transaction is consummated for the type of

transaction involved. The Advisor and its affiliates may, subject to the same
terms and conditions, receive normal brokerage commissions from sellers, buyers,
lessees and other parties with whom the Company engages in transactions.

Management of the Advisor. Set forth below are the names, offices with
the Advisor and principal occupations of the current executive officers and
directors of the Advisor.

Name and Offices
with the Advisor Principal Occupation
---------------- --------------------

Maurice Wiener See "Election of Directors."
Chairman of the Board of Directors
and Chief Executive Officer

Lawrence Rothstein See "Election of Directors."
President, Treasurer, Secretary and
Director

Carlos Camarotti Controller and Assistant
Vice President-Finance and Secretary of the Advisor
Assistant Secretary

The Directors recommend that the shareholders approve the amendment and
renewal of the Agreement. An affirmative vote by the holders of a majority of
the Shares present in person or by proxy at the Annual Meeting of Shareholders
is required for approval of the Agreement.

Grant of Options. In 2001, the Committee granted options to certain
officers and Directors of the Company as follows:

Officers and/or Directors No. of Shares
------------------------- -------------

Maurice Wiener 30,000 shares

Chairman of the Board and Chief
Executive Officer

Lawrence Rothstein 25,000 shares

Director, President , Treasurer
and Secretary

Bernard Lerner 8,000 shares

Vice President

Carlos Camarotti 8,000 shares

Vice President, Controller and
Assistant Secretary

Officers and/or Directors No. of Shares
------------------------- -------------

Walter Arader 5,000 shares

Director

John Bailey 5,000 shares

Director

Harvey Comita 5,000 shares

Director

The exercise prices equaled or exceeded the market value of the Shares
on the date of grant.

INDEPENDENT ACCOUNTANTS

The Company has engaged BDO Seidman, LLP ("BDO"), its independent
accountant for the fiscal year ended December 31, 2001, as its independent
accountant for the fiscal year ending December 31, 2002. Representatives of BDO
are not expected to be present at the meeting.

SOLICITATION OF PROXIES

The cost of soliciting proxies will be borne by the Company. In
addition to the use of the mails, proxies may be solicited by Directors,
officers and employees of the Company personally, by telephone or by telegraph.

OTHER BUSINESS

The Board of Directors is not aware of any business other than those
items referred to above to be presented for action at the meeting. However,
should any other matters requiring a vote of the shareholders arise, the agents
named in the accompanying proxy will vote in accordance with their own best
judgment.

In order for proposals of shareholders to be considered for inclusion
in the proxy materials for presentation at the 2003 annual meeting of
shareholders, such proposals must be received by the Company no later than April
1, 2003.

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

A copy of the Annual Report on Form 10-KSB for the year ended December
31, 2001, including financial statements and schedules thereto, filed with the
Securities and Exchange Commission, may be obtained by shareholders without
charge upon written request to: Secretary, HMG/Courtland Properties, Inc., 1870
South Bayshore Drive, Coconut Grove, Florida 33133

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

YOU CAN SAVE YOUR COMPANY ADDITIONAL EXPENSE BY SIGNING AND
RETURNING YOUR PROXY AS PROMPTLY AS POSSIBLE

ANNEX A

HMG/COURTLAND PROPERTIES, INC.
AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
CHARTER

I. PURPOSE

The audit committee (the "Audit Committee") of the board of directors (the
"Board") of HMG/Courtland Properties, Inc. (the "Corporation") shall provide
assistance to the Board in fulfilling its responsibility to stockholders,
potential investors and others for the oversight of the quality and integrity of
the accounting, auditing and reporting practices of the Corporation. The Audit
Committee's primary duties and responsibilities are to:

o Serve as an independent and objective party to monitor the
Corporation's financial reporting process and internal control system.

o Review and appraise the audit efforts of the Corporation's independent
accountants.

o Maintain free and open communication with and among the independent
accountants, financial and senior management of the Corporation and
the Board.

In discharging this oversight role, the Audit Committee is empowered to
investigate any matter brought to its attention, with full power to retain
outside counsel or other experts for this purpose. The Audit Committee will
primarily fulfill these responsibilities by carrying out the activities
enumerated in Section IV of this Charter.

While the Audit Committee has the responsibilities and powers set forth in this
Charter, it is not the duty of the Audit Committee to plan or conduct audits or
to determine that the Corporation's financial statements are complete and
accurate and are in accordance with generally accepted accounting principles.
This is the responsibility of management and the independent accountants. Nor is
it the duty of the Audit Committee to conduct investigations, to resolve
disagreements, if any, between management and the independent accountants or to
assure compliance with laws and regulations and the Corporation's Ethical Code
of Conduct.

II. COMPOSITION

The Audit Committee shall be comprised of two or more directors as determined by
the Board, each of whom shall be independent directors. An independent director
is a person other than an officer or employee of the Corporation or its
subsidiaries or any other individual having a relationship which, in the opinion
of the Board, would not interfere with the exercise of

A-1

independent judgment in carrying out the responsibilities of a director. The
following persons shall not be considered independent:

(a) a director who is employed by the Corporation or any of its
affiliates for the current year or any of the past three years;

(b) a director who accepts any compensation from the Corporation or
any of its affiliates in excess of $60,000 during the previous
fiscal year, other than compensation for board services,
benefits under a tax-qualified retirement plan, or
non-discretionary compensation;

(c) a director who is a member of the immediate family of an
individual who is, or has been in any of the past three years,
employed by the Corporation or any of its affiliates as an
executive officer. Immediate family includes a person's spouse,
parents, children, siblings, mother-in-law, father-in-law,
brother-in-law, sister-in-law, son-in-law, daughter-in-law, and
anyone who resides in such person's home;

(d) a director who is a partner in, or a controlling shareholder or
an executive officer of, any for-profit business organization to
which the Corporation made, or from which the Corporation
received, payments (other than those arising solely from
investments in the Corporation's securities) that exceed 5% of
the Corporation's or business organization's consolidated gross
revenues for that year, or $200,000, whichever is more, in any
of the past three years;

(e) a director who is employed as an executive of another entity
where any of the Corporation's executives serve on that entity's
compensation committee.

All members of the Audit Committee shall be able to read and understand
fundamental financial statements, including a company's balance sheet, income
statement, and cash flow statement or will become able to do so within a
reasonable period of time after his or her appointment to the Audit Committee.
Additionally, at least one member of the Audit Committee must have past
employment experience in finance or accounting, requisite professional
certification in accounting, or any other comparable experience or background
which results in the individual's financial sophistication, including being or
having been a chief executive officer, chief financial officer or other senior
officer with financial oversight responsibilities. The members of the Audit
Committee shall be elected by the Board at the annual organizational meeting of
the Board and shall serve until their successors shall be duly elected and
qualified. Unless an Audit Committee Chairman is elected by the full Board, the
members of the Audit Committee may designate a Chairman by majority vote of the
Audit Committee.

III. MEETINGS

The Audit Committee shall meet at least one time annually, or more frequently as
circumstances dictate. As part of its job to foster open communications, the
Audit Committee should also meet at least annually with management and the
independent accountants in separate executive

A-2

sessions to discuss any matters that the Audit Committee or either of these
groups believe should be discussed privately. In addition, the Audit Committee
or at least its Chairman may, if deemed necessary, meet with the independent
accountants and/or management quarterly to review the Corporation's financial
statements consistent with Section IV below.

IV. RESPONSIBILITIES AND DUTIES

The Committee shall:

A. Documents/Reports Review

1. Review and reassess the Charter at least annually.

2. Review and discuss the Corporation's audited financial
statements for each fiscal year with management and the
independent accountants; discuss with the independent
accountants the matters required to be discussed by
Statement of Auditing Standards Number 61, as it may be
modified or supplemented; review the written disclaimer and
the letter from the independent accountants required by
Independence Standards Board No. 1, as it may be modified or
supplemented; and discuss with the independent accountants
the independence of the independent accountants. Based on
the review and discussions in the preceding sentence, make a
recommendation to the Board on inclusion of the audited
financial statements in the Annual Report on Form 10-K for
each fiscal year. The review shall also include any
certification, report or opinion rendered by the independent
accountants and discussions regarding the adequacy of
disclosures and content, quality of earnings, reserves and
accruals, suitability of accounting principles,
reasonableness of estimates and other judgmental matters and
such other matters that the Audit Committee deems
appropriate.

3. Review and discuss, with management and the independent
accountants, adjustments recorded as a result of the audit
of the Corporation's financial statements for each fiscal
year, and the effects of audit findings that were not
adjusted in the underlying accounting records of the
Corporation.

4. Review, discuss and assess, with management and the
independent accountants, the impact of new accounting
pronouncements on the Corporation's financial statements and
related disclosures.

5. Review and discuss, with management and the independent
accountants, any reports on the Corporation's internal
accounting controls rendered by the independent accountants.
The review shall include discussions regarding the quality,
adequacy and effectiveness of the Corporation's accounting
and financial controls including computerized information
system controls and security.

A-3

6. Review with the independent accountants the matters that the
independent accountants are required to communicate to the
Audit Committee as a result of their review of the
Corporation's interim financial information and Quarterly
Reports on Form 10-Q. For this purpose, the Chairman of the
Committee may act on behalf of the entire Committee.

B. Independent Accountants

7. Recommend to the Board on an annual basis the selection,
retention or, where appropriate, replacement of the
independent accountants. In doing so, the Audit Committee
shall determine the independence of the independent
accountants by: (i) reviewing and considering the written
disclosures and the letter from the independent accountants
required by Independence Standards Board No. 1, as it may be
modified or supplemented, that they are independent; (ii)
actively engaging in a discussion with the independent
accountants with respect to any disclosed relationships or
services that may impact the objectivity and independence of
the independent accountants; and (iii) taking, or
recommending that the Board take, appropriate action to
oversee the independence of the independent accountants. The
independent accountants shall have ultimate accountability
to the Board and the Audit Committee, as representatives of
the stockholders of the Corporation. The Audit Committee
shall also consider the effectiveness of the independent
accountants, and shall approve the auditing services to be
rendered by the independent accountants and the fees or
other compensation to be paid to the independent accountants
related thereto.

8. Review the performance of the independent accountants and
approve any proposed discharge of the independent
accountants when circumstances warrant.

9. Review, with the independent accountants, the nature, timing
and scope of the proposed audit of the Corporation's
financial statements for each fiscal year and the procedures
to be utilized in each such audit.

10. Review all reports issued by the independent accountants and
provide the independent accountants with full access to the
Audit Committee and the Board to report on any and all
matters deemed appropriate by the independent accountants.

11. Periodically consult with the independent accountants
outside the presence of management regarding internal
controls and the completeness and accuracy of the
Corporation's annual financial statements.

12. Direct the attention of independent accountants towards
specific matters or areas deemed to be of special
significance, and authorizing the independent accountants to
perform supplemental reviews or audits that the Audit
Committee may deem advisable.

A-4

C. Financial Reporting Processes

13. Review the integrity of the Corporation's financial
reporting processes, both internal and external, by
consultation with the independent accountants at least once
annually.

14. Consider the independent accountants' judgments regarding
the quality and appropriateness of the Corporation's
accounting principles as applied in its financial reporting.

15. Consider and approve, if appropriate, significant changes to
the Corporation's accounting principles and practices as
suggested by the independent accountants or management.

16. Make inquires, at least annually, of management and the
independent accountants with regard to significant risks and
exposures facing the Corporation and assess the steps
management has taken to minimize such risks.

D. Process Improvement

17. Establish systems of reporting to the Audit Committee by
each of management and the independent accountants regarding
any significant judgments made in management's preparation
of annual financial statements and the view of each as to
appropriateness of such judgments.

18. Review, subsequent to the completion of the annual audit,
separately with management and the independent accountants
any significant difficulties encountered during the course
of the audit, significant changes in the audit plan or scope
of work and any restrictions on the scope of work or access
to required information.

19. Review any significant disagreement among management and the
independent accountants in connection with the preparation
of the financial statements.

20. Review significant findings during the year with management
and the independent accountants, including status of
previous audit recommendations.

21. Review, with the independent accountants and management, the
extent to which changes or improvements in financial or
accounting practices, as approved by the Audit Committee,
have been implemented. These reviews should be conducted at
appropriate times subsequent to implementation of changes or
improvements, as decided by the Audit Committee.

A-5

E. Legal Compliance

22. Review with corporate counsel any legal compliance matters,
including corporate securities trading policies, as may be
deemed appropriate by the Committee.

23. Discuss with management, and with corporate counsel when
necessary, the status of pending litigation, taxation
matters and other areas of oversight to the legal and
compliance area as may be appropriate by the Committee.

24. Perform any other activities consistent with this Charter,
the Corporation's By-laws and governing law, as the Audit
Committee or the Board deems necessary or appropriate.

F. Audit Committee Reporting

25. Submit periodic reports to the Board regarding the
activities of the Audit Committee.

26. Issue annual summary reports regarding the composition of
the Audit Committee, its responsibilities, its activities
and its oversight conclusions to the Board.

27. Issue such reports as may be required for inclusion in the
Corporation's proxy statement.

This Audit Committee Charter adopted this 4th day of August, 2000.
Revision Date: N/A
---------------------------------------
Revision Number: N/A
---------------------

A-6

HMG/COURTLAND PROPERTIES, INC.

PROXY
Solicited on Behalf of the Board of Directors

The undersigned shareholder of HMG/COURTLAND PROPERTIES, INC.
("Company") hereby appoints MAURICE WIENER as attorney and proxy to vote as
designated on the reverse side all shares of Common Stock which the undersigned
is entitled to vote at the Annual Meeting of Shareholders of the Company to be
held at Grove Isle Club and Resort, 4 Grove Isle Drive, Coconut Grove, Florida
on Friday, September 20, 2002 at 10:30 a.m. and at any adjournment or
adjournments thereof.

(Continued and to be signed on reverse side)

|X| Please mark your
votes as in this sample

For Withheld Nominees: M. Wiener
1. Election of |_| |_| L. Rothstein
Directors W. Arader
J. Bailey
FOR except vote withheld H. Comita
from the following nominees

---------------------------.

For Against Abstain
2. Proposal to |_| |_| |_|
approve amendment
and renewal
of the Advisory
Agreement between
Company and HMG
Advisory Corp.

3. In their discretion, upon such other matters as may properly come before the
meeting or any adjournment thereof, all in accordance with the Company's Proxy
Statement, receipt of which is hereby acknowledged.

This proxy when properly executed will be voted in accordance with the above
instructions. In the absence of such specifications this proxy will be voted FOR
Proposals 1 and 2.

PLEASE MARK, SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.

Signature(s) Date
------------------------ ------------------

Note: (Please sign exactly as your name appears. Persons signing as executors,
trustees, guardians, etc. please so indicate when signing.)