The young man who bought a one-bedroom apartment off the plan in the Sydney CBD only to discover it’s now become a studio has been told that developer Lenland is not prepared to offer him any financial compensation.

Instead, he’s been told there’s no alternative to the stark choice to either have the contract for the apartment in The Castlereagh, for which he paid $585,000 in 2012, rescinded by the developer – or to accept an offer to have the former bedroom area’s carpet replaced, free, with timber flooring instead.”

“I still don’t feel that is a resolution of the issue,” says design consultant Jae Jun Kim, 27, who’s now waiting on legal advice. “I feel the least they can do for me is offer me financial compensation.”

It has now emerged that seven other buyers of one-bedroom apartments in the new 15-storey The Castlereagh are now also being told their units have been turned into studios.

Another, sales engineer Yifan Luo, 33, who also paid $585,000 for his “one-bedroom apartment” says he’s devastated by the change. “I am very, very disappointed, especially as I’ve been waiting three years for this,” he said.

“The market value for a one-bedroom is now $700,000 but the market value for a studio is now $550,000. So how can this situation be fair? How can they sell a unit as a one bedroom when it’s not even big enough?

“This has ruined so many of my plans for my life.”

Lenland Property Development managing director Benny Deng has not returned Domain’s calls.

His previous spokesman, project manager Richard Abbott, who’d said the omission of the bedroom had been an “oversight” now says, “I am not commenting any further on this. Call the Lenland director.”

Meanwhile, NSW Minister for Innovation and Better Regulation Victor Dominello has called an urgent roundtable meeting of property professionals to work out what to do about the escalating controversy of developer rescissions of off-the-plan apartments.

The emergency meeting on Friday will include members of the Urban Development Institute of Australia (UDIA), the Property Council of Australia, the Australian Bankers’ Association, the Owners Corporation Network, the Law Society of NSW (Property Law Committee), the Australian Institute of Conveyancers NSW Division Ltd, the Real Estate Institute of NSW and the Estate Agents Co-Operative.

“Reform is needed to better protect buyers,” said Mr Dominello. “Buyers purchasing off the plan need greater protection against exploitative practices.”

A recent court decision in favour of the developer on a Wolli Creek project in which apartment contracts were rescinded, he said, “is evidence that this issue needs to be more closely examined.”

In the instance of The Castlereagh, lawyer Bernard Chiu says in total eight one-bed unit buyers have had them changed to studios – without their knowledge.

“This is a ridiculous situation,” he says. “I feel so sorry for these people. They’ve been waiting for three years for their apartments, and now the developer is treating them like this.”

All are now taking legal advice on their rights.

Kim is still at a loss at how this happened.

“My exchanged contract says I have bought a one-bedroom apartment so I’m entitled to that,” he said.

“The developer has also acknowledged that the change from a one-bed to a studio is a ‘detrimental’ change, so should compensate me for that.

“I’ve been waiting for three years for my one-bedroom apartment and so I’ve been three years out of the market and it’s now gone up so much, I can’t afford to go back in.”

Another buyer on the same affected corner of the building, who asked not to be named, said he has resigned himself to losing out. “But it’s incredible this can happen – especially when the building’s just on the doorstep of the Downing Centre courts,” he said. “This is an area that seems completely unregulated.”

A third buyer, Pingkai Liang, when she was contacted by Domain, said she hadn’t yet inspected her apartment, as she’d bought it as an investment from Melbourne. “But I think I must go to see it now,” she said. “This sounds ridiculous. This can’t be Australia!”

Lenland’s lawyers wrote to buyer Kim last week to say they’d had to remove the bedroom wall and sliding doors that created the room, and realised that was a “substantial and detrimental” change to the property, but said Sydney City Council planners had insisted on the changes.

But a City of Sydney spokeswoman said the apartments had been sold as one-bedroom units, despite having less than the internal area of 50 square metre, the minimum, under the NSW Residential Flat Design Code, to qualify as a one-bedder.

“The internal area of this apartment, at 42 square metres, complies with the minimum area for a studio apartment (35 square metres), however it would rule it out from being a one-bedroom apartment,” she said.

“Even if the unit was 50 square metres, the design shows that the bedroom has no window for solar access and ventilation – a requirement for all bedrooms under the Residential Flat Design Code and the Building Code of Australia. A glass sliding door, when closed, would not allow natural ventilation into the room.”

Lenland says on its website that the company “strives to initiate international and local trends, targeting inner-city development opportunities which allow the group to realise its vision”. It’s currently developing two other projects, the 106-apartment Synergy at Hornsby, and the 35-apartment The Gallery, Chatswood.