A commercial builder has been suspended by the Victorian Building Authority (VBA) over a string of substandard housing developments in Melbourne's suburbs, including one with dangerous cladding.

Key points: The builder is fighting the suspension, and said he would meet with residents to fix issues

The builder is fighting the suspension, and said he would meet with residents to fix issues Mushrooms have grown in some apartments due to poor drainage and leaking pipes

Mushrooms have grown in some apartments due to poor drainage and leaking pipes A resident in one apartment block described the building's defects as an 'absolute nightmare'

Emad Farag has been suspended as a domestic and commercial builder for three years, with Mr Farag given a show cause notice about why he should not be suspended.

The VBA said "the decision to suspend was taken in the interests of the public".

"Mr Farag is the builder named on the permit for six buildings in the south-east of Melbourne which have been the subject of significant regulatory action through the issue of Emergency Orders, or Building Notices, or both," the VBA said.

Mr Farag has five buildings still under construction and he will be forced to find another builder to take over.

The builder has previously been issued with tens of thousands of dollars in fines by the regulator dating back to 1998, raising questions about the adequacy of the watchdog's punishments.

Mushrooms have been sprouting in some of the suspended builder's developments. ( ABC News: Supplied )

"I've been in the business since 1991, with the same company 4S Constructions, and definitely during that journey, I've done mistakes," Mr Farag said.

He told the ABC that he would meet with residents and fix the issues, blaming subcontractors for the defects.

Mr Farag said he would fight against the suspension.

"Every mistake I've done, I've paid the price for it … I'm still standing, still fighting for better products, better materials," he said.

'Absolute nightmare': residents

Residents at one apartment block built by Mr Farag said they had been forced to pay tens of thousands of dollars to fix defects which included leaking pipes and cracks in walls.

Inside some apartments, mould and even mushrooms had grown because of poor drainage and constantly leaking pipes.

An emergency order was issued for the apartment block during a statewide audit of buildings with cladding, due to concerns about the combustible cladding on the block.

As a result, gardens were removed and residents were warned the building may need to be vacated because of safety concerns.

Apartment owner Ryan Staples said the most recent works were for fire alarms.

"That was a cost of about $100,000 on to the owners all because [the builder] didn't put in the right wiring and the fire alarms weren't working and that's dangerous,'' Mr Staples said.

Owners want government assistance and fear that their property sale values have plummeted.

"It's been an absolute nightmare, I wish we had never bought the place," Mr Staples said.

Residents in the apartment block used towels to deal with water leaks. ( ABC News: Beź Zewdie )

Calls for reform

Suspensions and deregistration are uncommon, with fines and reprimands more commonplace.

The Builders Collective of Australia has been calling for laws to be overhauled, even if it costs industry more.

Spokesman Phil Dwyer said there were very few rights for home owners and the current laws were ineffective.

"It is rubbish, it needs be thrown out, we need a proper first-resort protection scheme that will protect consumers when something goes wrong,'' Mr Dwyer said.

"It's going to be costly for our industry but so be it, it has to happen."

Questions about 4S Constructions arose after a property the company built in Frankston South was raised in State Parliament last month over combustible cladding on the three-storey apartment block.

Shadow planning minister Tim Smith asked Planning Minister Richard Wynne what government assistance would be provided to residents who could not afford to meet the expensive emergency order rectification works.

Mr Wynne said it was good to see the VBA taking action and he would continue to consult about how to best help residents across the state grappling with issues.

Mr Smith said there was a role for government to help residents left out of pocket, especially by cladding defect notices.