Hastings District Council had not been told a Bridge Pa building consumed by fire on Sunday was being used for accommodation.
A large number of "seasonal workers" were sleeping in the Stock Rd building when it caught fire early Sunday morning.
Hawke's Bay area commander Chris Nicholl said someone had come home early in the morning and tried to extinguish the fire themselves.
Mr Nicholl said fire services were called after the person realised they couldn't contain the fire.
When appliances from Hastings and Napier arrived at the Stock Rd scene just after 2.30am the building was "well involved", but the three appliances on the scene put it out.
There were no injuries reported.
Mr Nicholl said the 30m by 20m building was still standing, but there was significant fire, smoke, and water damage inside.
Fire Safety were conducting an investigation into the cause of the fire, but at this stage it was not believed to be suspicious.
A council spokesperson said a dangerous building notice was issued yesterday, which meant the building could not be used for accommodation purposes.
Council has also started an investigation into whether the building had the necessary fire-rating and building consents which allowed it to be used for accommodation.
The findings of the fire service would form part of council's investigations.