A Rose Bay couple raked in up to $6500 rent a month after illegally turning a four-bedroom Keiraville home into an 11-room boarding house for Wollongong university students, a court has heard.
Mark and Michele Goltsman, co-directors of Edan Holdings, the company behind the venture, bought No 19 Rose Street in December 2010 as an investment property.
At the time, the home featured four bedrooms, a rumpus room, study area and storage room.
The Goltsmans spent the next two months converting the home into a boarding house for uni students, hiring builders to add extra walls, doors and fixtures inside the house to create two additional bedrooms on both the ground and first floors.
The house had 11 bedrooms, three bathrooms, two kitchens and two laundries by the time the renovations were complete.
But, in what was described in Wollongong Local Court yesterday as a "stupid mistake", the Goltsmans failed to obtain development approval from Wollongong City Council for any of the works carried out.
The pair yesterday pleaded guilty to two counts of carrying out development without consent and were fined a total of $30,000.
Acting for the Goltsmans, lawyer Alex Kelly claimed his clients had not deliberately broken the law, but had simply been ignorant of the fact that they needed development approval for the alterations.
"It wasn't deliberate, it wasn't an intentional affront to the planning laws," he said, describing the entire project as a "mum-and-dad venture".
He rejected suggestions by the council's lawyer, Lori Field, that the Goltsmans had made a significant financial gain.
He said when they added up the costs associated with the conversion and ongoing expenses compared to the monthly rental, their 2012-13 profit had been just $1710.
The court heard the couple received between $3759 and $6454 a month in rent from the students during the last financial year.
The rooms were advertised for rent at $140 each on several well-known accommodation websites.
Seven out of 11 rooms were occupied when the property came to the council's attention in April this year.
Mr Kelly said his clients had been co-operative with the council during its investigation and had restored the house to its original state immediately.
Magistrate Doug Dick yesterday acknowledged the Goltsmans' actions in rectifying the situation, but said the punishment needed to be sufficient enough to deter other homeowners from doing something similar.
"The law surrounding the occupation of dwellings and alterations to them is heavily regulated for a reason," he said.
He found the couple's motivation had been financial gain, seeking to get the maximum return on their investment.
The Mercury understands the house is now listed for sale.