REDLAND City Council has issued a show cause notice to owners of a demountable shed, illegally located on waterfront land at The Esplanade at Redland Bay.
The notice gives the owners until January 23 to explain why the shed is on the site without proper building approval.
Last week, officers went to the site and found the shed was being used but no evidence of someone living in it, which would be illegal under conditions of approvals.
The shed, sitting on top of some concrete paving stones overlooking the foreshore, was erected in October, before council granted development and building approval.
It is on one of five blocks of land owned by a consortia of Redland Bay development investors, including Bronwyn and Alan Hope.
The Redland Bay developers plan for up to 64 three and five-storey units on four blocks of land, surrounding the fifth block, where the shed is located.
Mr Hope said the "modular unit" would be a caretakers' residence and sales office for three years before plans were lodged for at least 16 residential and display units on the site.
He dismissed claims it was not anchored and said when he gained his owner builder licence it would be moved to the rear of the lot before being welded on to stumps.
Mrs Hope said there was "nothing illegal or unsafe" about what was happening on the site and said the container would become part of an owner-occupied house.
A council spokesman said the shed could not be lived in permanently or until council approved a building application for the development, which will be known as Sea Apartments.
"The caretakers' residence is a temporary building and a condition restricts its use to a maximum of four years from the date of approval," the council said.
Next door neighbour Ted Wearne said he was concerned the shed could blow over in strong onshore winds, damaging his property.
"The vacant block next door has had a shipping container on it for a number of years and now another one has been placed 2.5 metres from my fence, on bricks," he said.
"I am not an engineer but it doesn't look too stable and with the high winds we get on the shore here, I am concerned. It's also a bit of an eyesore."
Redland Bay councillor Mark Edwards said he instigated the inquiries about the container house because he was concerned about the "aesthetic impact".
He said if the shed was to become a permanent dwelling he would ask council to introduce a similar assessment policy adopted for the bay islands in October.
That policy, and the associated $510 fee, stipulates houses cannot be smaller than 60sq m, must be safe and have no "aesthetic impact".