A complaint to the Queenstown Lakes District Council alleged the plot, which includes a caravan, shed and outdoor toilet, contained an illegal long-drop.
Council regulatory manager Lee Webster said that was not the case.
"There is a cassette toilet, like you would have in a freedom camping vehicle, but it is within a tin shed with flooring."
The tenant’s caravan, on 2270sqm of private land owned by Dale Hunter, is wedged between a Department of Conservation marginal strip, State Highway 6 and council land.
Doc and the New Zealand Transport Agency have also investigated.
Mr Webster said temporary buildings did not need resource consent.
He accepted some people might consider it an eyesore but said the council’s hands were tied, unless the tenant stayed put for more than 12 months.
If that happened, the issue might go to court to determine what constituted "longer term".
Mr Webster: "While it is not to everyone’s taste, and I certainly understand the frustrations and concerns of some of the community, this individual has been very co-operative and appears to be working and operating within the requirements of the legislation."
The initial council inspection, in April, sparked concern the caravan might be encroaching on Doc land.
Doc Queenstown operations manager Geoff Owen said: "He is actually located on a private section, therefore we have no role to play."
The entrance to the temporary camp is off State Highway 6 and NZTA communications manager Frances Adank confirmed it met access requirements.
The tenant did not want to comment.
Mr Hunter was holidaying overseas and his son, Craig, did not want to comment.
