Moves are under way to demolish a derelict central Wellington house, which has now caught fire three times in three years, before it leads to a tragedy.

Wellington City Council fears someone will be seriously hurt in an accident or fire at the Allenby Tce property.

The council has already run up bills of $50,000 cleaning up the asbestos-riddled site. It is now moving towards a forced demolition through the courts, at a cost of up to $150,000, because the owners have done nothing to clean up the mess.

The house caught fire on Saturday evening, with flames licking around a support post on the bottom deck. Firefighters quickly brought it under control.

Yesterday a fire service spokesman said the fire was suspicious, and investigations were continuing.

The eight-bedroom home has been derelict since an arson in 2009, and squatters are reported to have been staying there.

Zachariah Wilton, 19, was jailed for two years and three months in 2010 for setting fire to the building knowing danger to life was likely.

The house caught fire again in spectacular fashion last September. Flames and smoke were visible from much of Wellington before the fire was brought under control.

Correspondence made available to The Dominion Post under the Local Government Official Information and Meetings Act last week shows the council has had trouble getting the owners to do anything about the property.

Cleanup work has already been completed by the council at a cost of $50,000. This has included cleaning up asbestos, demolishing chimneys, and fencing off the building.

The council was now moving towards a demolition via a court order, at an estimated cost of up to $150,000.

In a letter to the owners, council lawyers Phillips Fox said: "The council is very concerned about the potential for harm to people near or in (legally or otherwise) the building, and your failure to arrange for anything to be done to remedy the building's dangerous state."

After Saturday's fire a neighbour, Krystal Stephen, 23, said the house should be knocked down. "The owners appear to be biding their time to knock it down. They might as well just do it. People in the adjoining house are in real danger."

Flatmate James Tate, 22, said: "A lot of people were freaking out and having a look when the fire broke out. There were quite a few firemen who showed up, but they seemed fairly relaxed about it.

"They did not look unfamiliar with the place. The place should be demolished and the site developed."

The council's chief building officer, Richard Toner, said the council initially had trouble getting hold of the owners. It had not been able to move more quickly as it had to follow legal procedures. "Council has tried really hard to get it resolved."

He was confident the council would eventually get its money back, if necessary by forcing the sale of the land. In February the house was listed for $495,000.

- © Fairfax NZ News