Blackpool Council is set to take legal action over delays to a £22m housing project which will be completed several months behind schedule.
Phase two of the Queens Park redevelopment in Layton should have been finished in spring of this year by developer Lovell's, but it is now expected to be November before the first tenants can move in.
A report by Blackpool Coastal Housing (BCH), which manages the council's housing stock, says the delay has resulted in lost rental income.
It adds: "The necessary legal and contractual steps have been taken that will allow the council to pursue liquidated damages which would be rental loss in the main.
"At present the focus is on ensuring Lovell's complete all units to the required standard.
"Once BCH is assured of a final handover date, a decision will be made on liquidated damages."
It is more than two years since the remaining three tower blocks were demolished to make way for new homes.
Once completed, the project will have seen nearly 200 homes built on the site which was occupied by five blocks of high rise flats.
The report, which was presented to the council's Shareholder's Advisory Board, also raises concerns about rent arrears due to more tenants struggling to make ends meet.
The amount of arrears has increased slightly to just over two per cent of the total collectable rent.
The report adds: "Of greater concern is the underlying economic position coupled with universal credit, which is beginning to impact on arrears particularly among working tenants whose income is a mix of wages and in work benefits."
At the end of July, 120 council homes were empty but 51 of those are due to redevelopment including the impending demolition of flats at Troutbeck Crescent on Mereside.
Demolition work has also started at Chepstow Road on Grange Park, with residents being consulted on redevelopment plans for the area.
Between them the schemes for Grange Park and Mereside will see between 200 and 250 new homes built.