The building, which sits at Griggs near Cullen, was denied a boarding permit in 2014, according to the Houston Fire Department.
In the 1990s, the the building was reported as vacant and falling down, causing damage to neighboring buildings.
In 2004, the city issued a permit to remodel the structure into an office building, and an additional permit was issued in 2007 to convert the office building into a banquet hall.
The building caught fire overnight with 20 people inside. A man and a woman were found dead after firefighters broke down the front door around midnight.
Investigators said a third person remained hospitalized on Thursday after being injured in the fire.
When firefighters arrived, there was smoke coming from the roof.
The bodies of both victims were found just feet from the front door. Investigators said it appears they almost made it out, but sadly died before they could escape.
As firefighters searched inside for other victims, they found the third person still alive.
Since there were so many rooms inside the boarding house, firefighters said it made the search difficult.
Investigators said there were about 20 rooms inside the home.
The 17 people who scrambled to escape said they were awakened by the screams of a woman, warning everyone to get out. When they tried to leave through the front door, they said it was locked. Then, they said the back door was locked as they worked to escape the flames.
"We seen black black smoke, and we could not believe it," fire victim Evelyn Richmond said. "They try to get the back gate open, and it was hard. It was double locked. Like someone completely locked us in. My husband had to use a crowbar to get the back gates open."
The Red Cross is at the scene helping those 17 people who are now displaced.
They will be putting them in a hotel for the day.
The names of the victims have not been released, and right now arson investigators are trying to see if this fire was intentionally set.
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