Yes.1) You have to exercise reasonable care in regards to anyone, even trespassers, on your property (though admittedly, the level of care does vary based upon whether someone is permitted or not to be there). If you do not provide notice and this person is somehow injured in or as a result of the demotion, you could face substantial liability.2) You say they are living there illegally, but it's possible they disagree and if there has been no court determination yet (e.g. you have not brought an ejectment action against them), it's possible they do have some rights to possession which the demolition would violate; therefore, you really should first have them removed through a court proceeding  (ejectment if they are not a tenant; eviction if they had been a legal tenant who then refused to leave) prior to the demolition.