This is a zero clearance unit, I spoke with the clean up crew, said the home owner didn't use it for years and decided over Xmas break to fire it up, apparently there was damage / rust holes at the connection from the top of the unit and chimney, the resulting heat cause this.
So a word of warning to those that buy new homes or haven't used there fireplace in years, please get it inspected before using.
*Also is using a prefab chimney that's boxed out, make sure you have a cap and everything is water tight.
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