In the past decade or so, the Department of Hawaiian Home Lands has required, as a condition of receiving turnkey residential lease awards, that applicants agree to certain Declarations, Convenants, Conditions and Restrictions (DCCRs) that apply to the entire homestead community. The rules are much like the rules that govern private developments, generally enforced by a community association made up of residents.

Anthony "T.J." Quan

In the case of homestead communities, however, the question arises as to whether an eligible beneficiary can be forced to agree to rules – such as painting their homes a uniform color, prohibiting loud speakers, banners and signs, and visible trash receptacles, and no construction or planting of trees within ten feet of the roadside boundary of the lot – in order to receive a residential lease. Another rule allows members of the Community Association to enter upon a lessee's property at any time.

On April 22, 2009, the Honorable Judge Elizabeth Eden Hifo of the Circuit Court of the First Circuit orally ruled that the DCCRs created and implemented by DHHL in the Kalāwahine community on O'ahu were void. The Court specifically ruled that the DCCRs were void because DHHL failed to comply with the constitutional mandate of Hawaiian Homes Commission Act Section 207.5, which requires that the DHHL comply with the rulemaking requirements of HRS chapter 91, before determining the disposition – including DCCRs – of single family and multifamily units developed and constructed by the DHHL on Hawaiian Home Lands.

HHCA section 207.5 provides:

Housing development. The department is authorized to develop and construct single-family and multifamily units for housing native Hawaiians. The method of disposition, including rentals, as well as the terms, conditions, covenants, and restrictions as to the use and occupancy of such single-family and multifamily units shall be prescribed by rules adopted by the department pursuant to chapter 91.

Originally, the HHCA only provided the DHHL and the Hawaiian Homes Commission with the authority to award and lease unimproved tracts of land to qualified beneficiaries under the HHCA. Traditionally, upon an award of lot by the DHHL, lessees were charged with the responsibility to use and improve their Hawaiian Homestead lots, which included constructing their own residences. In 1984, HHCA section 207(a) was amended to allow the DHHL develop and construct multifamily units on Hawaiian Home Lands, in an effort to allow the DHHL greater flexibility to explore alternative development models, including planned communities with common areas. This provision further required DHHL's disposition of these multifamily units, including DCCRs, to be determined under the rulemaking requirements of HRS chapter 91. In 1997, the statutory authorization giving way for the DHHL's development and construction of multifamily dwelling units on Hawaiian Home Lands in HHCA section 207(a) was eventually transferred into HHCA section 207.5, which additionally gave authority to the DHHL to develop single-family units and rentals.

The Circuit Court essentially ruled that HHCA section 207.5 was plain and unambiguous and further, that it was clearly applicable to the Kalāwahine community. First, the Kalāwahine project involved the development and construction of single family and duplex residential units. Secondly, DHHL authorized the Kalāwahine project and assisted in the development and construction of the project along with a private developer, Kamehameha Investment Corporation. Lastly, the DHHL clearly enacted and implemented DCCRs in Kalāwahine without following the rulemaking requirements of HRS chapter 91. Accordingly and based on this analysis, the Court ruled that DHHL and the HHC violated HHCA section 207.5 and HRS chapter 91, and further, the DCCRs, which were made part of the long term leases between DHHL and the native Hawaiian lessees in Kalāwahine, were void.

The Circuit Court's decision comes after almost four years of litigation before the Hawaiian Homes Commission and the Circuit Court, prompted and engaged in by Hui Maka'āinana a Kalāwahine, a grassroots organization compromised of native Hawaiian beneficiaries under the HHCA and residents who were directly affected by the DCCRs in Kalāwahine who viewed the DCCRs as an unfairly controlling and inequitable system that ran contrary to the preservation of Hawaiian values, traditions, and culture. The members of Hui Maka'āinana have, throughout the course of their residency in Kalāwahine, vehemently challenged the DHHL's implementation of DCCRs in their community because they were never provided with an opportunity to participate and have a voice in determining what kind of method of living would be appropriate in their community.

The Circuit Court's decision leaves open the question as to whether DCCRs in other Hawaiian Homestead communities across the state similarly situated to the Kalāwahine community are valid. Ultimately, however, the decision will hopefully send a message to the DHHL and HHC that they must not engage in arbitrary and capricious decision making, but rather, confer onto their beneficiaries and their families the constitutional rights of due process and participation in decisions and acts that will, in the end, affect the very interests and rights of Hawaiian Homelands beneficiaries that they have a solemn trust duty to protect.