A developer has agreed to sell a section of Arlington Village, a major garden apartment complex, to its tenants for a moderate-cost housing cooperative rather than convert it to condominiums.

The agreements by the Holladay Corp. of Washington to sell 98 of the development's 655 units to tenants is apparently unprecedented in pvirginia, according to Arlington officials, but it reflects a trend in the District of Columbia.

The firm plans to go ahead with condominium conversion of most of the remaining 557 units except for an undetermined number that w-ll be reserved for elderly and low-income renters.

The tenants association of the 41-year-old red brick complex in South Barton Street off Columbia Pike ratified the purchase agreement with the developer at an emotional meeting Thursday night. The tenants will pay an estimated $2.5 million for the property.

Tenants Association President Cecelia Cassidy said tenants are planning to apply for local and federal funds, including community development money, to help raise the $2.5 million.

In a trend that parallels one in the District of Columbia, and concerns county officials, more than 25 percent of the moderate-cost apartments in Arlington have been converted to condominiums since 1972. Arlington now has the lowest apartment vacancy rate of any jurisdiction in the D. C. area.

Over the past year, tenants at several large apartment complexes in Washington, including McLean Gardens, have purchased their buildings from developers who planned condominium conversions.

In Washington, developers must offer to sell a project to tenants before going ahead with conversion.

Developers of properties in Virginia are under no similar legal obligation.

The agreement between the Holladay Corp. and the Arlington Village Tenants Association includes provision for substantial discounts to tenants who want to buy condominium units in the complex. Tenants will be able to buy one-bedroom condominiums for about $35,000, a saving of about $15,000 over what other buyers would pay.

Holladay officials also have agreed to provide lifetime leases for tenants over 65 who want to rent apartments.

Tenants Association President Cassidy said Holladay officials agreed to the cooperative proposal because tenants were preparing to sue the developer on grounds that the planned condominium conversion would violate zoning laws.

Holladay vice president Porter Dawson disagreed. "We were absolutely positive of our right to convert and we would have proceded," he said. "It was our judgment that we needed to provide housing for a group that could not afford to buy the product we are selling. This agreement made us feel good and them (the tenants) feel good."