Kaimata Retreat owners Kyle Davidson and Rachel Duell are said to be talking to a planning consultant after ''reversing'' the permitted use of two buildings on their property.
The site at 297 Cape Saunders Rd overlooks Papanui Inlet, providing guests with stunning views and quick access to wildlife tourism.
However, a copy of the owners' 2004 consent showed they were granted permission to build a new residential home on the site, and convert their existing two-bedroom cottage on the same site into visitor accommodation.
Instead, the new home had become a luxury lodge overlooking the inlet, while the owners refurbished their existing cottage and continued to use it as their family home, council resource consents manager Alan Worthington confirmed.
It appeared the swap had been in place for years, but council staff were only alerted after a member of the public raised concerns in recent days.
The owners declined to comment when contacted by the Otago Daily Times, but Mr Worthington said council staff had spoken to them.
It was clear they were not complying with their consent, and they ''probably accept that'', Mr Worthington said.
''They are allowed a commercial residential activity on site. That's what's going on - it's just in the wrong building.
''They've reversed it. If they want to reverse it, they need to change their consent.''
The couple had indicated they were speaking to a planning consultant and would apply to change their existing consent.
However, council staff would have to decide whether to publicly notify the new application, which could lead to public submissions and a hearing.
Staff would also consider whether enforcement action was appropriate, possibly including an infringement notice or fine, he said.
The four-star retreat offered a mix of short stays and packages, some costing more than $5000, and has attracted international media coverage, including a feature in the Netherlands' Playboy Magazine.
Mr Worthington said council staff had checked the property soon after the new building was completed, and found it was complying with consent conditions, but that had since changed.
Council staff did not conduct ongoing monitoring, relying instead on complaints from the public, he said.
''If someone flips the use of their building, we wouldn't know unless it was drawn to our attention.''
