Mr Daniell said the material that fell off the old Toomath Building was "a very superficial piece of plaster".
It had formed part of repairs that had been made to the building after the 1942 earthquake that inflicted a lot of damage to Masterton buildings, especially in Queen St.
Regarding the Daniell's Building, Mr Daniell said he accepted it would have to be demolished and as a result he was soon to call for tenders to level it.
As owner of many other buildings in the town, including commercial buildings, Mr Daniell said "all tenancies" have been checked since Monday's earthquake and no other problems found.
He said Masterton was in an "incredibly fortunate" situation as many of the once earthquake-prone buildings had been replaced either by Lands Trust Masterton or by developers such as the late Florus Bosch and David Borman.
"People should be thankful they don't live in Australia, seeing their homes destroyed by bush fires or huge floods," he said.
Masterton District Council chief executive Wes ten Hove said inspections of the Daniell's Building revealed the problems which necessitated a section 124 notice being imposed on it were related to damage caused to the upstairs interior walls.
He said the exterior of the building had posed no problems and, although the notice led to evacuation of the tenants and banned people from entering the building, the council was happy to allow "managed access" to the tenants in order for them to retrieve their belongings.
Demolition of the Daniell's Building will mean several tenants of shops on the ground floor will have to move out.
The shops would fall victim to demolition even though they were very strongly built and had not suffered any damage.