The new year began badly for the remaining residents of The Kailuan who have been struggling to stave off eviction notices from their landlord.

Yesterday, landowner Castle Family LLC filed an eviction lawsuit in Circuit Court, alleging that all 18 units in the low-rise, three-building project at 409 Kailua Road were supposed to have been vacated by Dec. 31 but an unspecified number are still occupied.

The suit asks that the court issue eviction notices and have sheriff's deputies or police officers remove remaining residents if they still refuse to quit the premises.

A hearing date on the lawsuit has not been set yet.

One of the holdout residents, Sarah Way, who's disabled and living on a fixed income, said yesterday evening that the board of directors of The Kailuan Inc. was meeting to discuss the lawsuit.

Way said in October that she bought a leasehold interest in her condo unit 12 years ago and can't afford to find another home.

"I'm concerned and I pray a lot," Way said in October.

The ground lease under The Kailuan expired Dec. 31, and landowner Castle Family LLC said in the lawsuit it has offered condo owners financial incentives as well as relocation services to move out.

The former rental property was converted to a cooperative housing corporation in 1986, with buyers of individual units receiving ownership shares in the cooperative, according to the suit.

Shareholders were offered $10,000 per share to move out of their units by Oct. 31 and $5,000 per share if they left by the end of November, the suit said.

"Some of the units are still occupied," the suit said.

Part of the problem with the property is that it is still connected to an old cesspool system that the federal Environmental Protection Agency required to be closed by the end of the year.

"The cesspools at The Kailuan have not been closed" because people are still living there, the eviction suit said.

The Kailuan is part of a cluster of structures across the street from Kailua District Park that have been scheduled for demolition, to be replaced by higher-priced housing.

Most of the property was sold by Kaneohe Ranch — part of the Castle Family corporate interests — to the Schuler Division of Texas-based real estate developer DR Horton.

But the land under The Kailuan remained with Castle Family LLC.

The landowner said in the suit that in addition to financial incentives, it offered "relocation and support services through Catholic Charities, (real estate) brokers and other resources."

Reach Jim Dooley at jdooley@honoluluadvertiser.com.

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