Hove Crown Court heard how contractor Glen Peters (trading as Brow Builders) had undermined the structural integrity of the house by digging out the basement during works in February 2015.
He then failed to act on the advice of a structural engineer on how to remedy the situation, resulting in the gable wall partially collapsing and the ground floor collapsing into the basement.
Adjacent properties had to be evacuated and the area cordoned off because there were concerns that members of the public living nearby and passing through the area were at risk.
An investigation carried out by HSE found that the property had bungeroosh walls (a composite building material made up of bricks, cobblestones and small pebble and flint in a lime mix mortar set between shuttering), common to buildings in the Brighton area which were built in the mid 18th to 19th century.
HSE said that the make-up of these walls presents particular challenges for structural stability. Those doing the works must fully understand what they are dealing with, said the report.
The investigation also found that Glen Peters failed to report the incident to HSE as a dangerous occurrence in accordance with the Reporting of Injuries, Diseases and Dangerous Occurrences Regulations (RIDDOR) 2013.
Glen Peters (trading as Brow Builders) of Woodingdean, Brighton, pleaded guilty to breaching Regulation 25(1) of the Construction (Design and Management) Regulations 2007 and Regulation 7 of the RIDDOR Regulations 2013.
He was sentenced to five months imprisonment for count one and two months imprisonment for count two to run concurrently. He was also ordered to pay costs of £7,000.
Investigating HSE principal inspector Emma Stiles said “Basement work must be properly planned to ensure the structural integrity of the building throughout the construction work. When this type of work is done badly, workers and members of public are at significant risk of serious injury or death.
"In addition, we cannot underestimate the impact on the homeowners when their properties are extensively damaged," she said.