Residents of The Kailuan co-op housing project have hired private attorney Gerard Jervis to help them fight an eviction lawsuit filed last week.

Jervis said he believes the landowner, Castle Family LLC, did not meet a legal obligation to offer shareholders in the co-op project the right of first refusal to buy fee ownership of the land under the building.

In a status conference yesterday, Circuit Judge Glenn Kim scheduled a hearing on the issue for Jan. 16. The judge reserved the entire day for arguments in the case.

There are 18 units in the building, across Kailua Road from Kailua District Park. Jervis said some eight units are still occupied.

Adjacent parcels of property with rental housing on them were sold by Castle Family to a Texas-based development firm with plans to demolish the old structures and replace them with higher-priced housing.

The Kailuan was originally a rental housing project but was converted to a cooperative housing corporation in 1986, with buyers of individual units receiving ownership shares in the cooperative.

Jervis said he believes the landowner wants to include The Kailuan property in the development sale but has been blocked because of the earlier conversion of the building into a housing cooperative.

In the eviction suit, Castle Family LLC said it offered financial incentives and other services to residents last year as inducements to relocation, but some residents rejected them.

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.

The building is connected to an old cesspool system that the federal Environmental Protection Agency required to be closed by the end of last year, the landlord suit said.

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

Reach Jim Dooley at jdooley@honoluluadvertiser.com.