Citing fire damage and deteriorating building conditions, Montgomery County officials yesterday said the Amity Garden apartment complex near Gaithersburg is "uninhabitable" and ordered it to begin closing immediately.

Richard J. Ferrara, director of the Montgomery County Department of Housing and Community Development, issued notice that he is revoking the operating license for the 51-unit complex, which was severely damaged by fire last month and has been the scene of frequent drug dealings and sporadic stabbings and shootings. The order means that no new applications can be accepted for rentals and that the 75 persons living in the 26 occupied units will be relocated by the end of August, Ferrara said.

"It's about time they started doing something," said Carolyn Prather, who has lived in the subsidized housing complex for three years.

Prather and other tenants had appealed to the county for help, saying they are tired of the "horrors" of Amity Gardens and complaining about its roaches, rats and broken air conditioning.

But residents also were concerned about moving to new homes. "I hope they don't locate me farther away from my job in Darnestown," said Ida Chaney, who lives with two sons in an upstairs unit.

County officials for months have been pressuring the buildings' owners to make repairs and have been seeking to arrange a sale of the development. But Ferrara said the June 25 arson fire, which caused at least $500,000 damage, was the final straw for county officials.

"A building inspector went out and looked at that the complex and concluded that it is uninhabitable," Ferrara said. "There are burned-out units that can't be occupied at all, some vacant units with broken windows and massive roach infestation, and occupied units with water leaks, peeling paint, exposed wires and loose floorboards."

Jerome Kinney, the majority partner of the Amity Garden Limited Partnership, which owns the complex, could not be reached for comment yesterday. But according to his attorney, Henry Keegan, Kinney was "distressed" by the county report on conditions at Amity Gardens. "He felt it impugned his name," Keegan said.

The project, he said, has been damaged primarily by the two fires, one in March and one in June, Keegan said. In the meantime, the developer has been negotiating to sell the property, he said.

"Knowing that new people would renovate, I guess it is only human nature not to spend any money on repairs," Keegan said.

"We have been dealing with the developer for years, but they haven't paid their license fees in two years and they are behind on their utility bills. I expect the gas and water to be shut off at any time," Ferrara said.

To issue a ticket to require improvements in the complex would be pointless, he added, because "there is no money there . . . . The developer is in bankruptcy."

Amity Gardens Limited Partnership filed for reorganization under Chapter 11 of the federal bankruptcy law on March 30, 1983.

Negotiations with the Department of Housing and Urban Development, which holds the mortgage on the property, for a local nonprofit group to purchase the complex have dragged on for months, preventing the county from making repairs, Ferrara said.

"We've been waiting since November for some action from HUD," Ferrara said. "I'm out of timetables."

As soon as the sale can be completed, the county will begin renovations and repairs, Ferrara said. He said that he expects the county to spend up to $700,000 on the work.

Margaret White, manager of the Washington field office of HUD, said that her staff is "trying to expedite" arrangements for the sale. But HUD cannot authorize the sale until an audit of the owner is completed, she said. Among other things, HUD has asked for a better accounting of $20,000 allocated to the owner to make repairs to the property, White said.

Keegan, Kinney's lawyer, blamed the delay on HUD "foot dragging."

Shortly after county officials revoked the complex's license, County Council member David L. Scull toured Amity Gardens to see the problems facing tenants. Ferrara said Scull's visit was not related to the decision to close the complex.

Scull went into the neatly maintained unit where Helen Bailey, 30, lives with her three children. Bailey, who has lived in the complex for six years, pointed to holes in the wall, a missing faucet control in the bathroom and a broken air-conditioning unit. To stir the air in the apartment, there was a window fan in the living room.

After learning about the county's decision, a group of residents, including Prather and Chaney, gathered in a stairwell to discuss their plans. While they talked, Kim Chaney, 19, Ida Chaney's daughter-in-law, arrived for a visit.

Kim Chaney was less restrained in her response to the news about the move. Jumping into the air and waving her arms like a high school cheerleader, she gave a loud yell: "Ya'll won . . . . Ya'll ought to be satisfied now."