The building was upgraded to a red sticker on February 4, 2011.
Mr Yan said "some guy" named John was renting the property right up until the February quake hit. He paid his rent in cash and had no tenancy agreement.
When asked why he allowed a tenant to stay in a building he knew was yellow-stickered, Mr Yan said: "I thought someone would have told him to leave ... someone like the council.
"My understanding was that danger was about the front facade ... [John] accessed the building from the back."
But Mr Yan later said he might have told John about the danger.
Loss adjuster Peter Avnell, who inspected the property, said he had made a passing comment to Mr Yan that the tenants should move out. "The building was in pretty bad shape. They were cordoned off at the front and I didn't think it was a very safe place for people to be living."
A Building Act notice was served on the building in October which noted significant damage to structural walls. The notice ordered make-safe works be completed by mid-November.
But no make-safe works were done by the owner. Mr Yan said he never received the letter telling him the works needed to be undertaken, as it was mailed to his sister.
A copy of the Building Act notice was placed on the front of the building, but Mr Yan said he never saw it.
The building was downgraded to a red sticker by city council engineer Mark Ryburn on February 4 last year. One of the reasons he red-stickered the building, he said, was that he was concerned about signs of occupancy.
"I wanted a red [sticker] to make sure there was no confusion that they shouldn't be in there."
Mr Yan inspected the building with his friend Robert Ling, an engineer, after the September quake, but said Mr Ling noted only damage that was superficial and could be repaired.
The owner of the Tasty Tucker Bakery building, Steven Jarm, said neither the city council nor the owners of 382 Colombo St had given him any warning that the neighbouring building posed a danger.