Andrew Fennell, 55, who traded as Construct & Restore, pleaded guilty to failing to demonstrate 'professional diligence' at Dudley Magistrates Court last month.
The two-storey extension he built for a resident in Stourbridge, was found to be defective to such an extent that it had to be demolished and rebuilt by a new builder – at an additional cost of £28,850 to the homeowner.
The court also heard how Fennell, of Monkhopton, near Bridgnorth in Shropshire, did not give the homeowner their rights of cancellation as required.
In mitigation, the magistrates were told that this was a one-off in his behaviour and that he had used subcontractors to carry out the work who were unreliable.
Following this, his relationship with the householder broke down and he was unable to put things right.
The court fined Fennell £550 and ordered to him pay a £55 victim surcharge – plus compensation of £12,820 to the homeowner, with an additional £1,000 towards the cost of the prosecution.
Karen Wright, director of public health and wellbeing at Dudley Council, said: "This prosecution sends out a clear message we will protect consumers from the activity of traders who flout the law and carry out substandard work.
"This kind of activity causes a huge amount of distress to the victims who have worked hard and saved to pay for improvements to their homes and are then badly let down."