The building is believed to have been the caretaker's cottage in the 1920s for the Ainslie bus terminus, one of Canberra's first transport hubs.

According to residents it is a ''quirky oddball'' throwback to pre-depression Canberra, but the building was excluded from the Corroboree Park Housing Precinct, a heritage-listed area that ends just over the cottage's fence.

The building was most recently used to house refugees.

Designs by Mahony has lodged a development application to demolish the existing building, owned by the Department of Housing and Community Services, and replace it with ''two new brick veneer structures''. The neighbourhood was informed they had until July15 to made a submission to the ACT Civil and Administrative Tribunal. A submission was made last month.

But Ross Pettersson, who lives next door to the cottage, said the fence was pulled down on June 22 and parts of the interior were pulled up one week later.

''When we woke up the other morning [June 29] and heard the bumping and thumping we came up and said 'Hang on, there's an appeals period','' Mr Pettersson said.

Residents contacted the ACT Planning and Land Authority, and work was halted at the site.

But Carolyn McDonald said discussions with ACT Housing had given the impression demolition would recommence after July 15 regardless.

Neither ACT Housing nor the developer could be reached for comment yesterday.

Ms McDonald, Mr Pettersson and neighbour Alistair Sands said they felt marginalised by the speed with which demolition had begun.

''Where's due process? Where's our right to make complaints?'' MsMcDonald asked. Mr Sands described the move as a fait accompli on the part of the Government. The development application lodged with the planning authority stated heritage value was ''not relevant''.

Since the original fence was removed and a construction fence erected, Mr Pettersson and MsMcDonald said, looters had been taking things from the site.

''The letterbox is gone that was taken a few days ago,'' MsMcDonald said. A mattress has been thrown over the fence, and Mr Pettersson said copper wiring had been stripped from the building. The residents want more time to seek heritage status for the site, but the July 15 deadline is fast approaching.

''There's a lot being said about the centenary and Canberra's history, and yet they're pulling it down,'' Ms McDonald said.