A fake planning notice stating that a mosque was to be built on the Walker Welfare Centre site is being treated as a hate crime by police.
The sign was attached to the fence around the site in Edge Lane. Bradford contractors Gill are currently in the process of demolishing the building.
Rob Sanderson saw the sign on Tuesday morning.
He said: “I assume it was done by somebody inside the site but it could have been letter-boxed through to make it look like it was.”
Mr Sanderson said his sister first saw the sign at 8.55pm, but that it was gone by 9.20pm. Police were called at 9.30pm but they said the sign had been removed by the time they arrived.
A council spokeswoman said: “It is both impossible and unhelpful to speculate about who may have placed such a poster but we will be working with the police on this issue.”
Gill demolitions declined to comment.