Slumlords cramming 14 people into two-bedroom flats in illegal accommodation network (ABC)

View Comments ABC Slumlords are charging up to $150 per person a week for a shared room in a Sydney apartment.

Dodgy landlords are cramming backpackers and students into filthy apartments, in defiance of all regulations and laws.

Up to 14 people were living in one two-bedroom flat in central Sydney, with the slumlord charging up to $150 per person a week.

Italian traveller Ruben Cortese needed a cheap place to stay at the beginning of a 12-month working holiday, so he answered an ad on the online marketplace, Gumtree.

"[The apartments] were actually very cheap, like $150 per week," Mr Cortese told 7.30.

"I just arrived and I saw the apartments were with sauna, swimming pool," he said of the advertisements.

It looked too good to be true, and it was.

The flat he was shown was actually an illegal backpacker hostel, with four beds in each of three rooms in a small flat.

Mr Cortese moved in, paying $150 a week for one of the twelve beds.

Within weeks he was offered a job as an apartment manager – and it soon became apparent that he was part of a significant operation.

"I had 16 apartments and with an average of eight to twelve people inside each, so for a total of more than 160 people," he said.

"And they were not big apartments - they were all packed inside."

The apartments were not only crowded, they were also filthy.

"They were having bed bugs, dirty carpet, full of cockroaches - three quarters of my apartments were unbelievably full of cockroaches," Mr Cortese said.

Mr Cortese collected rent - always cash - and delivered it to a man he knew as Jack at the Banana Supermarket, a Korean shop below one of the apartment blocks.

"I found out his real name is Amr Hassan, he's a guy from Egypt," Mr Cortese said.

"He was running all this business, everything that happens in this business has to come through him ... every decision that is made about the apartments needs to get his approval. He's actually the boss of everything."

Illegal accommodation network runs more than 60 Sydney apartments

7.30 discovered that Banana Supermarket is the hub of an illegal accommodation network targeting backpackers and international students.

The network has more than 60 apartments in up to a dozen buildings in inner city Sydney.

Up to 14 tenants are crammed into apartments designed for four people.

"One of my units I had, I had 14 people," Mr Cortese said.

"They put a couple of fake walls inside so we had a total of three double rooms and two four-bed bedrooms without a living room, so without a table for dining."

Mr Cortese was one of around six apartment managers who were expected to fill beds by advertising online.

Ads were also placed by casuals working on commission - $50 for each bed they filled.

"They had 30 people that were working for him as casual workers because [Amr Hassan] just paid them with the money of the bond of the people that were moving in," Mr Cortese said.

He says most of the staff were tenants themselves and they were under immense pressure to deliver.

"Jack was always very angry with everyone ... he was shouting [at] all the managers that they didn't have all the beds full of people," he said.

"But it was impossible sometimes because the apartments were really crap.

"If an apartment has two or three empty beds, it's like an emergency for them, because they - Jack - will not earn money from the apartment.

"He earns from the difference between the actual rent of the apartment and what they pay to him."

Operators in the short-term bed-for-rent market are brazen – advertising widely on the street and online.

Slumlords are breaking the law: Backpackers Operators Association

But Kristy Carstairs, president of the Backpackers Operators Association, says what they are doing is illegal.

"There's tax evasion, rate evasion - they're paying residential rates on what is essentially commercial business ... you're breaking strata rules, upsetting neighbours," she told 7.30.

It can also be dangerous, and Australia has a grim record when it come to fires in backpacker accommodation.

Six backpackers died at the Downunder Hotel fire in Kings Cross in 1989.

The toll was even higher at the Childers Palace Backpackers Hostel fire in Queensland in 2000, when 15 young fruit pickers died.

On Wednesday night, firefighters fought a blaze at a backpacker's hostel in Sydney's inner west, where two people were injured.

One of the properties in the Banana Supermarket network was identified as a fire hazard in May this year.

The three-storey building in Ultimo originally had three bedrooms.

It had been converted into illegal backpacker accommodation with 22 bedrooms and 58 tenants.

The NSW Fire and Rescue Service found 27 separate breaches of fire and safety regulations, and issued an emergency order that the building be evacuated.

But the regulatory system is clumsy and operators are quick to find a way to work around local government regulations.

Cortese speaks out to prevent others from being ripped off

Mr Cortese described being asked by Jack to move several beds out of an apartment because council inspectors had been called to investigate reports of over-crowding.

"I go in the apartment with this guy, he disassembles the bed, we put all the beds in [a flat next to] the unit that is going to be inspected by the city council," he said.

"Later Jack takes a look at the apartments, and after all is done he checks if the apartment looks fine - valid for the city council.

"[Then] the city council arrives, all those guys dressed in suits and ties and everything, he brings those guys inside, so the city council comes out and if everything is fine Jack comes to me and usually he tells me, 'yeah, okay let's put everything back'."

But now Mr Cortese wants to speak out to prevent other backpackers and students being ripped off.

"What I really wanted to do... is after I've been working for him, was to stop this kind of thing and just make all those businesses... get destroyed.

"What I want to do is just to make sure that someone else who will come to Australia will not have to pass through this and maybe find the place that they deserve here."

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