One of the last court cases growing out of the long, complex legal battle in which 26 condominium owners sued the developer of the Sentinel of Landmark in Alexandria and his attorneys has resulted in a $7 million damage award to Bettius & Sanderson, a Fairfax County law firm.

A U.S. District Court jury decided last week that National Union Fire Insurance Co. acted in bad faith when it held up a payment to the firm.

By delaying its payment under a $2 million malpractice policy, National Union "destroyed the reputation and viability" of the law firm, said Thomas P. Mains, the attorney representing the Bettius firm. The award included $5 million in punitive damages.

Russell S. Rosenberger, once a member of the Bettius firm who since has resigned from the Virginia Bar, was found guilty of fraud when an Alexandria judge ruled in favor of the condo owners in their suit against developer John DeLuca, Rosenberger and another attorney. An Alexandria circuit court judge found that Rosenberger failed to register the Sentinel's condominium documents properly and did not give the unit owners correct public offering statements, as required by Virginia law.

DeLuca, the two attorneys and the law firm, then known as Bettius, Rosenberger and Carter, were ordered to pay the unit owners a total of about $800,000, cancel the owners' sales contracts, release them from their mortgages and pay their legal fees, which amounted to a $2.5 million award. The owners received their payments earlier this year.

Because of the insurance company's delays, the law firm could not make a $350,000 payment toward the award, and the firm, as well as the other defendants, was ordered to pay daily sanctions of $5,000, which later were doubled. The insurance company finally made a $400,000 payment in the case.

Although Rosenberger and the other attorney, who was found guilty of "innocent and mistaken representation" in settling one of the unit sales, were the only lawyers working for the Sentinel, their law firm was legally responsible for their actions.

Washington attorney Paul D. Krause, representing the insurance company, which is based in New York, said he could not comment on the decision because the case still is "in litigation," an apparent reference to plans for an appeal of the verdict.

In another case, DeLuca was paid $90,000 earlier this year in a settlement of a suit he filed against Rosenberger and the law firm. DeLuca was found "vicariously liable" for the actions of his lawyers in the Sentinel case, but said he did not know that they were acting illegally.

The first application for a loan under Maryland's new indoor plumbing program was filed this week by a Charles County couple, who plan to use the money to install a well, a bathroom and a sewage disposal system.

The loan fund was part of the housing program sponsored by Gov. Harry Hughes at the 1986 General Assembly, and the governor traveled to the rural community in northern Charles County to accept the application from Mr. and Mrs. Sherman Washington.

The work has not been contracted out, but Ardeth Cade of the Department of Economic and Community Development said the estimate is that the job will cost about $15,000. She said she expects that loans made under the program will range from $2,000 to $15,000.

There is $700,000 in the fund to help Marylanders install or repair water and sewage systems. The program primarily serves people with incomes of less than $20,000 a year, with top priority going to those earning less than $10,000 a year.

Interest rates vary from zero to 7.5 percent, depending on the income of the applicants. The maximum loan term is 20 years. Repayment of the loans can be deferred or the loans forgiven in some cases.

Hughes called it distressing that 33,000 households in Maryland do not have complete indoor plumbing.

The program is administered by the Community Development Administration in the Department of Economic and Community Development. Potential applicants can call the department toll free at 269-2795 from the Baltimore area and 1-800-492-7127 from the rest of the state.

Quixsearch, Woodward & Lothrop's housing survey and apartment rental division, has found that 50 of the 97 builders in the Washington area with available homes costing $100,000 or less expect buyers to pay all their own closing costs, but there is a wide split between the practices of Maryland and Virginia builders.

In Maryland, 19 builders will pay a portion of the closing costs, while 36 will not. In Virginia, the figures are substantially reversed, with 28 builders paying a portion of the closing costs and 14 passing the costs on to the buyers.

The median earnest money deposit at the 97 projects is $1,500, although the figure is generally less in Maryland.

IN THE BUSINESS . . . U.S. office buildings paid more than $16 billion in real estate taxes last year, up $1.6 billion over 1984, according to the Building Owners and Managers Association International . . . Portman Cos., an Atlanta development firm with projects around the world, has opened a regional office here and plans to develop mixed-use centers in the Washington area as it has elsewhere . . . Johns Hopkins School of Advanced International Studies has purchased the Forest Industries Building at 1619 Massachusetts Ave. NW for $7.3 million for additional campus space, while the National Forest Products Association has moved to a new office on Connecticut Avenue. The Forest Industries Building is currently assessed at $4.52 million . . . Ridge Development Corp., a Weaver Bros. subsidiary, sold 216 homes worth $26 million at Lake Ridge in Prince William County in the first three months of the year. Another 218 homes were resold at the 3,500-acre community . . . Porten Sullivan Corp. sold 236 homes in Montgomery and Fairfax counties, the District and Florida worth nearly $31 million in the April-to-June period . . . Kirten/James Inc., a large Houston interior construction firm, has opened a Washington office in Georgetown . . . Town & Country Properties Inc. has named Gail Belt, who had $19 million in sales, as its top 1985 producer, her fourth consecutive year of winning the title . . . Foxhall Crescents, which is selling $750,000 homes off Foxhall Road NW, is promoting sales by telling buyers that, with the current lower interest rates, their monthly payments on $500,000 loans will be less than if they had bought lower-priced homes when the project first opened in 1981 and financed $400,000 of the purchase price . . . Winthrop Financial Associates has bought the 1,223-unit Riverside Park Apartments from Grosvenor Riverside Associates for $58,125,000 . . . Colquitt Carruthers Real Estate has bought Dreyfuss Real Estate in Gaithersburg . . . The Northern Virginia Builders Association is erecting a new headquarters office at Fair Lakes, the Fairfax County development now under construction, and expects to move from its Tysons Corner location by next spring.

PERSONNEL FILE . . . Walter N. Seedlock has been appointed vice president and director of design and construction at Little River Management Co. in Fairfax . . . Glen Construction Co. in Gaithersburg has appointed Richard deStwolinski vice president for construction . . . Genuario Construction Co. in Alexandria has appointed Arthur R. Genuario president and general manager and Louis V. Genuario Jr. vice president and construction manager . . . Shannon & Luchs has named Robert Scheer as Maryland regional vice president in the commercial brokerage division . . . Lawrence W. Vanderburgh has joined Pace Design as vice president.