Two weeks ago, a five-foot section of ceiling collapsed in Brenda McPherson's Southeast condominium, showering her 13-year-old son Bobby with fine flakes of fiber-glass insulation from the attic.

A District housing inspector who examined the apartment concluded "there were not enough vents between the roof and the ceiling, and the buildup of heat in the attic caused the most vulnerable surface to collapse. Something had to give."

Although no one was hurt, the incident has fueled an existing dispute between the 28 owner-residents of the 2-year-old Washington Place Condominiums, 1950 Naylor Rd. SE, and its developer, D&M Properties Limited Partnership.

The neat row of three-story piggyback-style condominiums, which range in price from $60,000 to $68,000 for a two-bedroom unit, is billed in advertising brochures as "one of the best places to live in Washington."

However, the Washington Place Owners' Association has filed an $8.5 million lawsuit, charging the developers with gross misrepresentation, financial mismanagement and negligent construction.

Among the alleged defects at the 52-unit development the suit lists are faulty electrical construction and wiring, inadequate internal plumbing systems, improperly installed washer-dryer units and inadequate and faulty fiber-glass insulation.

The civil suit, filed in D.C. Superior Court, also charges the condos' heating and air-conditioning systems are faulty and the developers built interior walls of "low grade, poor quality materials, which crack, tear and rip and have separated apart from baseboards at the floor and from the ceiling."

"I'm just a little taken aback by this whole thing," Murray Zawatsky, one of D&M's two partners, said in response to the suit. "We went above and beyond the standards of the industry when we built Washington Place. I'm sure we did everything we could."

The suit also alleges D&M's two partners, Zawatsky and Richard Hammett, have used residents' condominium fees earmarked for services at Washington Place to pay for work on other properties they own.

"That accusation is simply not true. There is no way that either Mr. Zawatsky or Mr. Hammett could get their hands on that money because they aren't empowered to do so," said Dan Sullivan, Zawatsky's lawyer.

Also named in the suit is the real estate firm of Shannon & Luchs Co., which has a financial management agreement with the Washington Place Owners' Association to handle the budgetary and financial concerns incurred in maintaining the grounds.

O'Dell and Yvonne Lewis, who were among the first residents of Washington Place in 1981, said they thought moving into their new home would bring an end to the sleepless nights they had spent in their old noisy apartment.

O'Dell Lewis said he has difficulty sleeping but was assured by a former real estate agent who represented Shannon & Luchs that the building was "soundproof."

When other units began filling up with residents six months later, the ringing phones and footsteps of upstairs neighbors were the first hints that the building was something less than he had been promised, he said.

"It's just a nightmare," Lewis said. "I sold my car and walked in the snow for weeks, and we spent our hard-earned money on this place. Now it's hard for me to write a check for this place. Why would you pay for something that you can't even sleep in. Would you?"

Sales brochures given to prospective buyers of Washington Place Condominiums state, "Ceilings in the home are insulated with fiberglass type of insulation having a thickness of eight inches."

Zawatsky contends the insulation mentioned in the brochure is in the roof of every building, and he insists the building either satisfies or exceeds D.C. building code requirements.

"I will admit that if a hi-fi was played at a high volume, you would hear some noise. But these apartments are more soundproof than others just like them," he said.

District housing regulations do not set a standard for soundproofing. "Any developer can say their building is soundproof," said one city housing official. "What is soundproof and what isn't is a personal matter."

Deeohn Ferris, a two-year resident of Washington Place and a lawyer for the federal Environmental Protection Agency, said city regulations are less important to her than what was promised by the developer.

"My contract was with the developers and not with the department of housing. This place is a dump," Ferris said.

"I believe the developers have misled the majority of the purchasers . . . and I want to hold them accountable for what I consider to be a breach of their obligation to me," she said.

The developers' attorney, Sullivan, said he has moved to have the suit dismissed on the grounds that it was not sanctioned by the condominiums' board of directors, of which defendant Richard Hammett is a member.

In the meantime, Robert Roberts, a Metrobus driver, is one of several other residents renting Washington Place units with the option to buy who said they have decided not to buy their units. They will have to forfeit their initial $1,000 investment, a fee charged for the purchase option, Roberts said.

"I don't want to get stuck with something that I couldn't get rid of," Roberts said.

For Brenda McPherson, whose ceiling is being repaired, and for other purchasers, the only choice is to remain. "Everything I have is invested in this place," she said. "All I want to do is get my place back together. I'm upset, but there's not much that I can do."

"I'm between a rock and a hard place."