Twelve families in the trouble-plagued Northview subdivision near Bowie filed a $16-million suit in Prince George's County Circuit Court yesterday against Levitt Homes Inc., charging the builder sold them homes that were "not fit for habitation."

The action by the Northview residents, most of them young families who bought their homes from Levitt during 1976 and 1977, follows a year and half of controversy surrounding 122 homes that sold for $48,000 to $70,000. The dispute already has cost Levitt its license to build in ,rince George's County.

Last year, county housing inspectors found more than 2,500 building code violations in occupied homes. Later, both county officials and residents complained that $1 million in repairs Levitt made to the homes was shoddy.And residents said Levitt officials failed to tell them before they moved in about water and sewer fees they would be told to pay.

"This was supposed to be our dreamhouse -- we waited eight years to buy it -- but it has been nothing but a heartache," said Joan Rich, who is among those who filed the suit.

"Every day I have to look at my beautiful house: rain pours in the ceiling; there's snow in the windows in the winter and rain in the summer; there's a two-inch rise in the upstairs floor. Once they even rammed the house with a bulldozer. There's no end to it."

Leo W. Dunn Jr., who is representing the Connecticut-based building company, said yesterday that Levitt had not deliberately built homes with the cracked foundations, leaking roofs and warped floors later found by inspectors. The firm worked honestly to correct its mistakes, he added.

"They are charging fraud and misrepresentation, and that has not been the case," Dunn said. "We are trying to cooperate 100 percent and work out the problems there to everyone's satisfaction. If there is a wrong, Levitt wants to right it."

Levitt, which in earlier years built much of Laurel and transformed Bowie from a decaying village into a boom town, was accused in the suit of fraud, misrepresentation, breach of warranty and negligence. Each of the 12 families asked for $330,000 in compensation for its losses and $1 million in punitive damages.

The families said their homes weren't built according to sound engineering practices or in conformance with plans and specifications. They also cited use of faulty materials and poor workmanship.

Dunn acknowledged that Levitt already is engaged in negotiations with the state attorney general's office about possible compensation of these and other families in Northview.

Jay Lenrow, an assistant attorney general handling the case, said yesterday the state has given Levitt until Sept. 15 to agree on a plan for compensation. Otherwise, Lenrow said, the attorney general's office "will consider other alternatives" including quasi-judicial proceedings before a hearing officer who could order relief for Northview homeowners.

Lenrow said that an attorney for several other families who filed separate suits against Levitt this summer has told him those suits probably would be dropped if Levitt reaches a compensation agreement with the state.

But Eugene Newman, the attorney for the 12 families who filed the suit yesterday, said he doubts a compromise between the state and Levitt would satisfy his clients.

"What happened at Northview is outrageous," Newman said.

"There are so many different things wrong you don't know what's what," said Gertrude Murphy, a party to the suit. "We got cheated out of so much. We don't have the right insulation; the flashing is bad under the bricks; a wall is warped, and the shutters have fallen off about five times."

"I put my life savings into this house," Murphy said. "I'm just really disgusted and sick of it all."