He said that was because the asset was obtained through criminal activity.
Mr Nicholas said he understood the process to have the property forfeited to the Crown was in its final stages of the required proceedings. The Official Assignee's office has yet to reply to the Bay of Plenty Times' request for more details about the property, the restraining order and whether the property was insured.
The Criminal Proceeds (Recovery) Act 2009 is used by the Crown as another tool to attack those benefiting from crime, as the person's assets can be restrained if the court is satisfied it has reasonable grounds to believe the assets are tainted.
Under the Act, assets can be ordered to be forfeited without the need for a criminal conviction.
Tauranga fire safety officer Ken McKeagg said crews had a difficult job because the back end of the house had caved in, and other parts of the building were in danger of collapsing.
Mr McKeagg said the cause of the fire had yet to be determined because it was too unsafe for him to go inside the building due to the instability of the charred remains.
A crew from A & J Demolition began demolishing the house yesterday afternoon to make the scene safe so Mr McKeagg could start searching through the debris as early as today.
Mr McKeagg said the usual process in cases of a suspected arson was not to disturb the scene but due to the structural instability of the gutted building and the likelihood the smouldering house could continue to burn for up to five days it was decided to promptly demolish it.
"It's not ideal and certainly makes my job even harder," he said.
Mr McKeagg said it appeared most of the house had been emptied of furniture.
"It has also been pretty much stripped out, including a lot of the light fittings, and I'm not sure whether the power was still on."
Mr McKeagg said: "We have a fair idea from the flames that the fire started in somewhere in the middle of the house, because it had caved in, and our investigation will focus on a 100sq m section in the middle of the gutted building."
A neighbour, who did not wish to be identified, said he first became aware of the fire when he drew back his curtains about 5.15am yesterday and saw "massive flames".
"I immediately shot down to the property to have a look and rang the fire brigade, and alerted the next-door neighbours. My first concern was that there may be someone inside, and I was very relieved to be told that the tenants had moved out last weekend.
"It was an absolutely horrible massive fire, with flames shooting up in the air and small little explosions going on inside the house ... It is not nice to know that a house in our neighbourhood has burnt to the ground."
The resident said he did not know the tenants but had been aware of the property's "shady past".
Police would like to speak to anyone who had any information about the fire, and they should call Tauranga police on 577 4300 or Crimestoppers anonymously on 0800 555 111.