The authority has defended its actions concerning Sparkle Developments' building of the houses in Grundy Fold Farm, Horwich after criticism by residents.
Some questioned why the builders were allowed to continue the work unchecked.
But a spokesman from Bolton Council said: "Building regulations control how you must build and developers are entitled to use private sector approved inspectors to carry out building control work instead of the council.
"This is permitted under the Building Act 1984. On this development, a private sector approved inspector was used and it was their responsibility to check that building regulations were being complied with when the houses were being built.
"When the council’s planning department received complaints in October, 2016 about work taking place at Grundy Old Farm not in accordance with the planning permission, we advised the developer to stop work on a number of occasions.
"We explained the development was unauthorised and gave timescales to address the matter.
"The developer chose to proceed with the work at their own risk and submitted a retrospective planning application, which they are permitted to do."
Planning permission for five houses at the site was originally given in August, 2014.
But the homes that have been built are of a different size, design and siting to the original application, which caused outrage among neighbours.
The retrospective application was refused by the authority's planning committee on Thursday last week, but some councillors said the buildings might not be demolished.
Regarding what will happen to the homes in the future, the council spokesman said: "Action will need to be taken to address the situation. When permission is refused for something already built which an applicant has applied for retrospectively, the council will consider the most appropriate next steps to take.
"Formal action could include the Local Planning Authority serving an enforcement notice requiring the developer to demolish the buildings. The applicant is entitled to appeal the decision.
"We would urge developers, landowners and applicants to always check if permission is required and to ensure that development is carried out in accordance with planning permissions and any other consents that are in place."
The developer could appeal the decision, an enforcement notice or could submit an application for a different scheme.
The new scheme could involve partial demolition and rebuilding the homes in line with the 2014 permission.