A group of Georgetown tenants who are fighting to purchase their 21-unit, 125-year-old apartment building before it is converted to condominiums found themselves one step closer to eviction last week when their suit against their landlord was dismissed by a judge.

The court's action apparently cleared the way for the purchasers of the building, The Holland Investment Inc., to convert the structure into condominiums that will sell for about $150,000 each, according to an official of the company. Rents for apartments in Hammond Court now range from $277 to $500 monthly.

The Hammond Court Tenants Association had filed suit against the building's owner, The Legare Trust, claiming that the tenants were entitled to a 45-day option to purchase the building before it could be sold. The trust had given the tenants a notice to vacate by Oct. 1 and a notice of conversion to condominiums on May 26, almost five weeks after they had contracted with Holland Investment Inc. to sell the building on April 24.

Since the tenants had not formed an organization with the legal capacity to hold real estate before the building, located at 1517 30th St. NW, was contracted for sale, they had no right to purchase under the city's Rental Housing Act of 1977, D.C. Superior Court Judge Daniel Weber ruled last week.

In granting the defendants' motion for dismissal, Judge Weber strictly upheld what some considered a vague section of the Rental Housing Act.

According to the law, tenants in a housing accommodation of four units or less must be given a notice of intent to sell and must have a 45-day opportunity to purchase their building before it can be sold.

However, in the case of a housing accommodation comprised of more than four rental units, there must be a tenants' organization with the legal capacity to hold real estate which has previously indicated an interest in purchasing the building before the tenants can claim their 45-day "right of first refusal" in purchasing the property.

The tenants argued that they had been organized since 1974 when they banded together to fight a rent increase. However, that organization did not fit the provisions of the law since the group did not have the legal capacity to hold real estate, according to Judge Weber's ruling.

Although they began organizing on May 10, the tenants did not form The Hammond Court Limited Partnership, an organization with the legal capacity to hold real estate, until June 8, six weeks after their landlord entered into an agreement to sell the building.

Weber heard the case last month and denied the tenants' request for a preliminary injunction. At that time he took the motion to dismiss udner advisement and presented his ruling last week.

"I'm not an attorney, but I do feel that in the spirit of the law we had formed an association some time ago," said Stephen Stollmack, co-chairman of The Hammond Court Limited Partnership, which claimed that their resident manager refused to give tenants details of what was happening to their building after she sent them a letter on March 13 telling them the building might be sold. "Time is of the essence, but you had to be a real estate attorney to know what was going on.

"All tenants in the city, in order to protect themselves are going to have to form an association, hired an attorney and send a letter of intent to purchase. It's a ridiculous type of situation where you had to hold corporate meetings and make out income tax forms - an odd way to protect your home."

"In a way it's ludicrous, because the law is meaningless, unless you are an attorney," echoed tenant Diane Bolz. "Anybody who lives in a building in D.C. should incorporate, even though there is no talk of the building being sold, to protect themselves in the future."

"The Rental Housing Act isn't supposed to be the Lawyer's Relief Act," noted the tenants' attorney Brian Frosh, who said incorporating into a tenants' association with the legal capacity to hold property under the law would require the services of a lawyer.

However, the ruling is a "a first decision that clears up one bit of vagueness in the statute," according to defendant's lawyer Daniel McEvily, who argued for the individuals's right to sell property without interference.

"It's the only reasonable solution," added Brian Murphy, attorney for co-defendant Holland Investment Inc."It would be pretty strained to have gone their way."

The emotions surrounding the case are particularly strong, since Hammond Court, which was built in 1852 by noted architects Andrew Downing and Calvert Vaux, is an extremely desirable property.

"The thing that bothers me is that a landmark Georgetown house is going to be made over into the type of chichi condominium that you see everywhere," said 10-year-tenant Dorothy Adler, who is researching the building's history. "It makes you sick."

However Bob Holland, president of Holland Investment Inc., said he plans to restore and maintain a building that would otherwise have gone into ruin since the tenants couldn't afford to maintain it.

"What I'm trying to do is preserve and rehabilitate the building so that the rest of us can enjoy it for another 100 years," explained Holland, who said he has been trying to purchase Hammond Court for 4 1/2 years. Holland said he estimates that the renovated condominiums will sell for about $150,000.

Although tenants must vacate by Oct. 1, they still haven't given up their fight, according to tenants' association co-chairman Ed Flatteau.

"We are going to appeal," said Flatteau, who noted that the tenants are also challenging the certificate of eligibility to convert to condominium. "We're planning three different types of fundraising events in the next few weeks and people are still determined to fight."