Despite the automatic fire alarm system, according to the national fire data system of national emergency management agency, the fires account for 40,932 incidents, 2,184 injuries and about 430 billion won in property losses in 2013. Since the conventional automatic fire alarm system has several weaknesses related to electrical signal such as noise, surge, lighting, etc. Most fires are mainly caused by electrical faults, mechanical problem, chemical, carelessness and natural. The electrical faults such as line to ground fault, line to line fault, electrical leakage and arc are one of the major problems in fire. This paper describes the development of a novel real-time fire monitoring system algorithm including fault detection function which puts the existing optic smoke and heat detectors for fire detection with current and voltage sensors in order to utility fault monitoring using high accuracy DAQ measurement system with LabVIEW program. The fire detection and electrical fault monitoring with a proposed a new detection algorithm are implemented under several test. The fire detection and monitoring system operates according to the proposed algorithm well.