Mahendra Bhatia moved last month from Falls Church to Centex Real Estate Corp.'s Chantilly Highlands development, searching for the privacy he thought was lost after developers cut down trees near his yard to make way for commercial development.

His new four-bedroom, $350,000 home, which backs up to a wooded strip about 40 feet wide, seemed like the perfect solution, Bhatia said, well worth paying a $7,500 lot premium and having an optional $4,500 basement entrance installed in the rear of the house.

But last weekend, Bhatia joined 13 of his neighbors in picketing at the subdivision's entrance with signs that included "When you buy Centex, you buy trouble" and "Before you buy, let us share our frustrations."

"We would never have bought this house if we knew they were going to pull a fast one on us," Bhatia said, resting his sign on a curb and mopping sweat from his brow as he stood in the sun last Saturday.

The "fast one" is a bicycle path, recently installed in the middle of the wooded strip, that Bhatia says ruined the seclusion he and his family had sought.

He and 13 other residents of Motherwell Court said Centex assured them when they bought their homes that the wooded strip separating Chantilly Highlands from another housing site would remain undeveloped, long after the Dallas-based home-building company had pledged to build the path as a proffer in its 1987 zoning agreement with Fairfax County.

Two weeks ago, the homeowners demanded that Centex return the lot premiums and the cost of the basement entrances -- together, about $12,000 -- that each of them paid. The group then set up its picket line and threatened to take the home builder to court.

"We were told specifically that this would be a protected area, a pristine area, a private area," owner Mac Haddow said. The homeowners, however, never got the promise in writing from the developer.

"The bike path has destroyed our privacy," Haddow said. "It raises very significant security issues for our children and our homes."

The campaign appears to have worked. On Wednesday, homeowners negotiated a settlement with Centex Executive Vice President Steve Weinberg and regional division President Gary Jernigan and agreed to drop plans for further demonstrations and legal action.

Centex refused to disclose terms of the agreement and insisted that the homeowners sign statements saying that they, too, would not discuss the settlement.

"That's just an issue between ourselves and the homeowners," Jernigan said. "The homeowners brought {us} some concerns, and we met and tried to understand what those concerns were. And we have reached a solution."

Fairfax County trails planner David Marshall said residents often complain about bike paths near their homes because of the greater pedestrian traffic the trails bring, but added that Centex had little choice but to build the trail, despite the residents' opposition.

"Centex obligated itself as part of its developmental proposal to do certain things the county asked for," Marshall said. "Now it has to do those things."

Community opposition to bike paths and other public facilities in residential areas rarely extends as far as threatened legal action, said William Young, director of consumer affairs for the National Association of Home Builders.

"Since the market is down somewhat, you are likely to see people going and looking for ways of getting some compensation," he said.

Residents indicated that Centex would install a border of shrubs between their homes and the bike path as part of the agreement and would cancel plans to install an access trail from the path to Motherwell Court.

Although the settlement does not entirely fulfill the homeowners' original request for payments of $12,000 each, one resident said, the deal was substantial enough to dissuade the group from pursuing legal action.

"We weren't just going to settle for some piddly thing, and we didn't," owner Stephen Young said. "What we were looking for was to be made whole for the damages that were done to us. As it stands now, that's been accomplished."

Bhatia said he will go along with the settlement, but added that he would not have bought his home had he known about the planned bike path.

"What they have done is just putting patches on," he said. "No amount of shrubbery or money can make up for the loss of privacy, the calm, the tranquillity. We are very bitter about it."