Current and former tenants at the luxury Van Ness South apartment building in upper Northwest Washington have won more than $500,000 in rent rebates and credits during the next two years as part of a settlement of a dispute over deteriorating conditions at the property.

The unusual agreement, ironed out between the Van Ness South tenants' group and the building's owners prior to consideration of the dispute by the D.C. rental agency, was hailed by the tenants' group as a major victory for apartment renters throughout the city.

"The tenants were up in arms here over the lack of services," said Robert Goodrich, president of the tenants' group at the apartment building located at Van Ness Street and Connecticut Avenue NW. "We wanted to show {the owners} what could happen to them financially."

In addition to the rent credits and rebates, the building's owners, a joint venture led by JMB Realty Corp., agreed to make numerous improvements at the 624-unit building where rents for apartments currently on the market start at about $800 a month for an efficiency. Tenants at the apartment complex over the past several years have complained of various building problems, including rotting floors, leaky ceilings, peeling plaster and increased crime.

Last October, the D.C. housing office found 76 housing code violations in the public spaces at the building, including defective wiring, crumbling walls and broken baseboards. In addition, the D.C. Fire Department discovered 17 safety violations.

Although the District's rent control law allows tenants to seek rent reductions based on poor services and conditions, such a large rent reduction as the one settled on at Van Ness South is extremely rare.

The building improvements agreed to by the two sides, contained in a 16-page document, include pledges by the building's owners to provide 24-hour emergency maintenance service, increase pest exterminations, perform regular inspections of cleaning services, increase building security measures, improve elevator service and conduct various cosmetic touch-ups within the building.

The $500,000 rent rebate package works out to the equivalent of about two months in free rent for tenants who have resided in the building since November 1984, which is when the building's current owners purchased the 11-story structure. Individual cash settlements will range from $1,000 to $1,200 per unit, with some renters obtaining credits as high as $1,700.

In addition, many former tenants who lived in the building during the past two years are eligible for rent rebates, as well as the estates of those former tenants who are now dead. The building's owners also agreed to pay the legal costs incurred by the tenants' group in its fight, an amount that Goodrich said exceeded $50,000.

The tenants' group, which represents more than half of the residents in the building, had been seeking a 35 percent across-the-board reduction in rent, amounting to about $3 million in credits and rebates. The recent agreement amounts to about a 17 percent average rent cut for each of the building's residents over a one-year period. The agreement means that a resident who paid $10,000 in rent during the past year will receive $1,700 in rent credits.

Despite the reduced amount agreed to by the two sides, Goodrich said his group is satisfied with the overall settlement because the package also includes the improvements to the building -- an assortment of services he said tenants would not have received had the dispute been taken to the District government for arbitration. In addition, he said settlement through the District's hearing process would have taken more than two years counting appeals.

"The tenants' purpose was to obtain proper and better management of the building," Goodrich said. "It's definitely a victory, a very large one."

Michael Glosserman, a principal of the joint venture that owns the building, said he is "very pleased" with the agreement.

Glosserman is also a principal of JBG Properties, an affiliate of the building's owners that manages Van Ness South.

Last December, Glosserman said his group "didn't agree with the {tenants'} petition and we don't believe there has been any reduction in services."

This week, after the financial and building improvement package was accepted by the two sides, Glosserman did not budge: "We have never believed that we reduced services, but what is important to us is that we get away from an adversarial relationship with the tenants. We don't think either side was looking forward to protracted litigation."

Glosserman said the Van Ness South agreement does not represent a victory for tenants' rights for other apartment dwellers in Washington. "Tenants will view it one way," he said. "I don't know what {the settlement} represents. It was just a very unfortunate set of circumstances that we wanted to settle. For my part, I'm just glad that the whole matter is over."

Not all of the tenants at Van Ness South are pleased with the financial and building improvement agreement. Despite her long-time fights for renters' rights in Washington, Van Ness South resident Valerie Costelloe said the settlement "is a mockery."

Costelloe said the purchase of the building nearly three years ago by the joint venture kept the building from being converted to a condominium.

Such a conversion would have forced out many long-time and elderly residents, said Costelloe, who added that the tenants' group actions "were a betrayal" of the building's owners.

She said the various problems at the building have been present long before the current owners took over in 1984.

"They did not even get a chance to follow through and do what had to be done," said Costelloe, who added that she will not accept the rent credit for which she will be eligible.

Moreover, Costelloe said the agreement will damage tenant rights in Washington, not improve them as the Van Ness South tenants' group has maintained.

"Every landlord in this town knows about this fiasco," said Costelloe, a member of the area's Advisory Neighborhood Commission and the Tenant Organization Political Action Committee, a pro-tenants' group.

"It's not going to do tenants any good. The landlords are a powerful group. It will now be difficult for us to get any amendments to the city's rent control law," Costelloe said. She added that the aftermath of the Van Ness South agreement might scare investors from future rental projects in the city.

But Van Ness South tenants' group president Goodrich said the association had to force the issue because the building's owners refused to make many needed repairs at the once-posh high-rise.

In its petition filed last year with the D.C. government, the group also complained that the building was plagued with air conditioning problems, dirty hallways and the reduction of porter and secretarial services.

The agreement "is very gratifying to the tenants, given the lack of attention they have been receiving over the past 2 1/2 years," Goodrich said.

"We hope the agreement will serve the two purposes we sought: to provide the management with clear notice for failing to provide the services tenants are due, and to provide the tenants with some measure of compensation for not receiving their money's worth."