The prosecutors in the southern city of Tainan launched an investigation into Saturday's disaster after photos showed cans and foam had been used to fill parts of the complex's concrete framework.
The district court, which earlier ordered the developer's arrest, said some reinforcing bars in the concrete of the 16-storey structure were too thin or too short.
The court took developer Lin Ming-hui, and two other people connected with the development, into formal custody late Tuesday on charges of professional negligence resulting in death.
It was the only high-rise in Tainan to crumble completely when the 6.4 magnitude quake struck before dawn Saturday.
"The suspects are being questioned further today, but as it is underway, details are not likely to be made public," Tainan court spokeswoman Kuo Jen-shiow told AFP. Prosecutors were not immediately available for comment.
The city government said it would seek a court injunction next Monday to stop the developer disposing of his assets while facing lawsuits.
According to a court statement prosecutors found that the beams and pillars of the first five floors on the east side of the building had too few reinforcing bars, and the bars were thinner than they were supposed to be.
"Apparently in this case, there were indeed flaws in the construction of the building," the statement said.
Rescuers were using diggers and other heavy equipment to remove giant concrete slabs to access the deeper layers of rubble where scores of people are feared buried.
The 72-hour "golden window" for finding survivors passed early Tuesday. But near midnight Tuesday Tainan mayor William Lai offered fresh hope, saying rescuers had detected signs of life.
"After detecting signs of life, the rescue team then banged in the direction of the signs three times, and they got a response three times. This shows there's a living person inside," the mayor told a press conference.
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