The Department of Labour has declared a demolition site in central Wellington to be unfit for work after asbestos was found there.
On Thursday an 1880s building owned by the property tycoons John and Michael Chow was demolished to make way for a car park.
But the owners could face legal action because they had the building knocked down without an archaeological assessment, which is a legal requirement for all pre-1900s buildings.
The offence carries a possible $40,000 fine.
The owners must now keep the site secure and stop the spread of asbestos.
The Wellington Civic Trust says the Historic Places Trust needs to keep a closer eye on heritage buildings that fall into the hands of developers after the demolition.
It was the latest of several cases where the requirement has not been met.
Wellington City Council gave resource consent for the building to be developed five years ago, but only recently approved its demolition.
The Civic Trust says that given the time that had lapsed since the consent was issued, the Historic Places Trust should have kept a closer watch.