FROM the outside it looks like a spacious apartment.

But behind the front door, is a unit whose renovations have landed its owner in the Supreme Court.

Where there were once three bedrooms, two bathrooms and a laundry, there are now five bedrooms - all with locks on the doors - five bathrooms and six tenants paying $300 or more a room.

It's a nice little earner, bringing in about $1500 a week.

It's not just another sign of Australia's rental crisis, but a growing problem for other owners and the owners' corporations who look after the blocks.

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The owners' corporation of the Carnegie building in the inner-city Sydney was last week granted a Supreme Court injunction to stop the apartment's owner Panos Patelis selling it and has demanded he reverse the renovations.

Mr Patelis' lawyer conceded in court that he had no council or any other approval for the work.

Owners corporation executive committee member Chris Oldham said over-tenancy, with up to 12 people crowded in a three-bedroom apartment, had destroyed other buildings.

"Over-tenancy has become one of the biggest impediments to people buying into city blocks," Mr Miller said.

"Apart from the impact on the amenity and lifestyle, there are the costs attached to it as the facilities of the building are grossly overused."

From a legal standpoint, there are fire and ventilation issues and extra plumbing and electrical work that encroached on common property, he said.

Sliced and squeezed

Mr Patelis, 47, who describes himself on his internet profile as an independent real estate professional, owns dozens of units, mainly across Sydney's inner-west, including 30 in one block alone, according to property searches.

He bought the ground-floor Carnegie unit in 2007 for $520,000. Similar units rent for $700 to $800 a week in the popular building, which has a shared swimming pool and gym.

Mr Patelis split the two bathrooms into four, converted the laundry to a bathroom, sliced the main bedroom in two and made another bedroom out of part of the loungeroom before the owners corporation was alerted to the work.

Then he put the apartment on the market for $970,000.

Earlier this month he was served with a summons by the corporation to appear in court five days later. When they got to court, Mr Patelis' lawyer told the court that the unit had been sold five days earlier for $520,000 with a five-day settlement. The buyer was the real estate agent selling it.

Justice Nigel Rein said there was a "seemingly clear" breach of by-laws and use of common property. He granted the injunction stopping the sale after being told the transfer had not been registered with the Land Titles office.

Mr Patelis did not return calls from The Daily Telegraph. Neither did his real estate agent.

One of the tenants, Hayley O'Connell, 20, who shares a room and bathroom with her boyfriend Nigel Evans, said they have little choice about where to live because they arrived in Sydney from Port Macquarie without jobs and no rental references.

"It's so hard to find somewhere to live in Sydney and it's getting more and more expensive," she said.

As well as the couple, there are three men and a woman sharing the apartment.

"We all get on really well," Ms O'Connell said.

"But we would rather live on our own and we are looking for somewhere else now we both have full-time jobs. We pay $320 a week and we thought it was a lot for one room."

Property law specialist Stephen O'Connor said he expected more cases like this relating to other owners .

"I am aware that these issues do arise in other buildings," said Mr O'Connor, whose firm Turnbull Bowles Lawyers represents the Carnegie building.