East Renfrewshire Council says Mactaggart & Mickel failed to inform the authority it was carrying out controlled explosions to break up rock on the site of a new housing development in Eaglesham, East Renfrewshire.
The firm also failed to notify the council of such plans in the original planning application for the 121-property Polnoon development.
The council said safety conditions would have been imposed, such as restrictions on the time of day the explosions were carried out and close monitoring of vibration levels.
The blast happened shortly after 2.30pm on Thursday afternoon. Dozens of properties, cars and garages were damaged by boulders and stones.
About 100 households were informed by letter that explosions were to be carried out, but were not told when they would happen.
One resident said he raised safety concerns with the firm after receiving the letter. He claims he was given assurances that homeowners would be given prior warning.
The building firm could also now be facing a costly insurance bill from residents whose properties were damaged.
The firm has confirmed it will not be carrying out any more explosions.
John Shannon's home, garage and cars were damaged by the blast. He lives directly opposite the site at Bonnyton Drive. He says his wife narrowly escaped serious injury after a boulder smashed through the kitchen window.
He said: "I got the letter and I phoned to express my concerns. They assured me that they would inform residents the day it was happening, knock on doors so people could make sure pets and children were inside."
Alastair Carmichael, Provost of East Renfrewshire, visited some of the homes that were damaged by the blast. He said: "It is obviously a controlled explosion that went wrong. The firm cannot deny liability."
A council spokesman said: "We received no prior notification that controlled explosions would be used at this site. It was also not highlighted in the original planning application and therefore no conditions were attached such as the time of day and monitoring of vibration.
"As soon as we were alerted to this situation we immediately contacted the health and safety executive, who we understand will begin their investigations at the site today.
Ed Monaghan, chief executive of Mactaggart & Mickel, said: "Our investigation continues as to the cause of the incident yesterday at our Eaglesham site. Again we are relieved that no-one was injured.
"Our experienced civil engineering contractor Synergy Civil Engineering Ltd subcontracted the blasting element to CS Drilling Services Ltd and they have confirmed that it is not custom to notify a local authority when conducting such operations.
"However, we recognise and accept in hindsight that it would have been in everyone's best interests to have done so.
"A detailed record is being maintained of damage that has been incurred, and many of the properties have already been repaired. All residents can be assured that we will continue to assist all those affected over the course of this weekend."