Victoria has suspended Aycon Constructions & Building Services for breaching insurance laws that require firms to acquire builders’ warranty cover before accepting customer deposits.

Regulator the Victorian Building Authority (VBA) says there may be more than 200 projects from 2018 to this year where Aycon was the builder but no valid domestic building insurance policy was in place.

It says the Victorian Managed Insurance Authority confirmed Aycon lacked the required cover for some of its building projects, and some certificates of insurance with the authority logo were not genuine.

“The VBA will use its full range of enforcement powers to protect consumers against potential harms caused by unprofessional conduct and non-compliant building work,” Commissioner and CEO Anna Cronin said. “We will hold those who do the wrong thing to account and do all we can to remove them from the building industry.

“If a domestic building insurance policy is not in place, it is not only an offence under the Building Act, but exposes homeowners to potentially significant financial and emotional turmoil.”

The VBA says it has received a relatively small number of complaints from Aycon customers about the compliance or quality of completed home builds.

The building registration suspension means work at sites where Aycon is the builder must stop immediately. The builder’s nominee director, Seyit Ayranci, has also been suspended.

In Victoria builders’ warranty – or domestic building insurance as it is called in the state – is mandatory for all domestic projects where the contract price is more than $16,000. Builders must acquire the cover before taking customer deposits.

The collapse of Porter Davis last year exposed cracks in the compulsory insurance scheme as hundreds of Victorian customers lost their deposits because the builder did not buy the insurance. The cover provides protection for incomplete or defective works if a builder dies, disappears or becomes insolvent.

Victoria has since introduced laws to strengthen compliance with the insurance scheme. The VBA has been given powers to issue penalties exceeding $46,000 for people and $230,000 for businesses, or $96,000 and $480,000 respectively if the conduct has been committed knowingly or recklessly.