Withholding Rent, a Loft Tenant Comes Out on Top.

A sign above the entrance to Margaret Maugenest's pale-coral Brooklyn building proclaims, ''Artists in residence on 2nd-3rd-4th floors.'' That has been true since 1979, when a few artists took over the building, an abandoned shoe factory on Nevins Street, in Gowanus, and began dividing it into lofts. Now, a colony of artists, writers and musicians lives and works in sunny high-ceilinged lofts that belie the peeling plaster and dusty wooden steps of the corridors connecting them. They have another occupation, too: fighting to bring their building -- not originally intended for residential use -- in compliance with the building code. [ABSTRACT FROM AUTHOR]