A Montgomery County circuit judge ruled yesterday that a condominium association has the right to bar residents from providing child day care services in their units, a ruling that child care advocates said could establish a legal precedent that would worsen a critical day care shortage.

Circuit Court Judge Peter J. Messitte pointed to the increased traffic, liability exposure, and wear and tear to common areas of the condominium in ruling in favor of the Hyde Park Condominium in Gaithersburg. The association's board had banned day care operations as a prohibited nonresidential use of the property.

"It may be that the residential setting is the very thing that parents who avail themselves of day care are seeking. But to the extent that their quest for a residential setting creates a steady flow of activity akin to a commercial enterprise, it clashes with the ideal of a more tranquil residential setting that other condominium owners have in mind," Messitte wrote in a 23-page opinion.

Ann K. Macrory, director of the Washington Lawyers' Committee Child Care Advocacy Project, said the ruling is the first in the country addressing a condominium board's specific restriction of day care. She predicted that it will result in "a flood" of associations filing suit.

"This is a tremendous obstacle to existing day care," Macrory said. If the ruling cannot be overturned on appeal, child care advocates will try to get the Maryland legislature to address the issue, she added.

Sandra Gellert, president of the National Association for Family Day Care, which joined the lawsuit as a plaintiff, said the ruling will have a profound impact in areas with a large number of condominiums.

"It is going to affect a lot of people, because condominium living is a fact of our economy," Gellert said. "It will preclude there being adequate day care in certain areas."

The case arose in April 1986 when the board of the Hyde Park Condominium-Phase I, a 143-unit complex, told two family day care providers living at the condominium that they would have to stop their operations.

The providers, Mary Stang and Diana Caldas, who had been caring for children in their apartments since 1984, filed suit against the board. They were joined by Sharon Cranford, the mother of one of the children Caldas cared for, who does not live at Hyde Park.

The plaintiffs argued that the condominium board's restriction violated Maryland public policy of encouraging child day care and that day care operations are not businesses per se but are merely incidental to residential use of the property.

The judge, noting that "this is not an easy case," said that licensed day care operations are "highly commendable . . . and of considerable utility to many members of the community." But he added that the activity had no greater claim than the desire of condominium residents for "the peace and quiet of a relatively traffic-free environment."

He pointed to a survey of unit owners -- in which 60 of 70 respondents opposed day care at the complex -- in dismissing the plaintiffs' argument that the restriction is "offensive to the common good."

More than 47,000 children in Montgomery County require day care, but only about one-third of them are getting care from registered and monitored providers, according to Joan Wilson, coordinator of child care resources for the Montgomery County Department of Family Resources.

The ruling "works against our efforts to recruit providers and have them registered," Wilson commented yesterday. Unregistered providers do not undergo criminal background checks, health and safety inspections and tuberculosis tests, she added. Wilson said the county government does not know how many children in Montgomery are cared for by providers who live in condominiums.

A similar legal case in Virginia is to go to trial next month, involving the Burke Cove homeowners association in Fairfax, which has a bylaw barring residents from operating businesses from their homes, Macrory said.

Neither the attorney for the condominium board nor the board president could be reached yesterday for comment.

Staff writer Charles W. Hall contributed to this report.