However, the possibility of it being destroyed by fire if allowed to remain was raised by councillor John Stuchbery.

His comments followed a forum prior to Monday night's meeting where Meramie's owner Ian Clark addressed councillors and told of the former residence and lodging house suffering vandalism.

The Kiewa Street building has been vacant since 2015 when it hosted Charles Sturt University students who attended the then city campus of that institution.

Mr Clark told of "unsavoury people" having damaged the property since it was last inhabited.

"Squatters, thieves...and drug users are in there," he said.

"We found needles, we found all things that we shouldn't find.

"It's a crying shame that they've been in there, but it's a reality of life and I can't stop them, they keeping breaking doors, they keep breaking windows."

In moving a motion to demolish the property, Cr Stuchbery said that preservation of the building would lead to it being permanently damaged and destroyed by squatters.

NEWS FROM COURT:

"Ultimately the building will probably be accidentally or deliberately burnt down and therefore lost forever," Cr Stuchbery said.

He argued the building, once a former home to a mayor of Albury, a private hospital and private lodge, had been "hideously modified" and was "plain dog ugly".

However, no other councillors supported Cr Stuchbery's motion and a recommendation to retain Meramie and reject a plan to raze and erect four double-storey townhouses was rejected.

Deputy mayor Amanda Cohn argued it would set a precedent for other heritage-listed properties to be destroyed if Meramie's obliteration was approved.

"If the state of the building is given as an excuse for its demolition, then what's to stop other owners of heritage-listed properties in the future from allowing them to become dilapidated so that they can get permission to demolish (them)," Cr Cohn said.

Councillor Graham Docksey pointed out the owners knew the building was heritage-listed when they bought it in 1999 and would have to acknowledge that in planning for its future.

Mr Clark earlier told the forum that a buyer for the property had been sought unsuccessfully with nobody willing to use it for a residential or commercial purpose.

He said the building was "past it's use-by date" and the land would be better off "repurposed".

Real estate agent Geoff Stean said he had been acting on behalf of Mr Clark and his wife Joy since 2017 and there had been 40 inspections of the property by would-be buyers.

He estimated that to repair the home to a habitable state would be "well in excess of a $1 million".