Neighbours of a six-bedroom holiday rental in Terrigal are asking the NSW Land and Environment Court on Tuesday to stop the owner from renting out her property.

Should the case succeed, the lawyer representing the owner of the holiday home warns it will cast doubt on the legality of the temporary rental properties run by thousands of people for weekends and school holidays across NSW.

Shocked: Rhonda Bennic, at her rental property at Terrigal. Credit:Marco Del Grande

It is a similar story up and down the coast where councils are developing their own regulations governing the short-term market.

The owner of the Terrigal holiday home, Rhonda Bennic, said if the court finds against her, it will ruin her. ''It was a total shock to me, and the outcome could not just affect me and ruin me, but if an order was made, it's going to realistically affect tourism on the central coast,'' she said.