Landlords are urged to be cautious and do extensive research before signing up to a letting agent in the face of growing legislation and falling agency profits.

The warning comes from Landlord Licensing & Defence, a law service aimed at property investors.

Its compliance expert Phil Turtle says: “We have lots of experience in dealing with agents who simply do not know the law when it comes to licensing a landlord’s property and other important aspects, including fire regulations.

“In particular, they don’t always know the HMO regulations that apply to letting three- and four-person shared homes.”

He adds that council regulations and licensing is becoming a growing worry for part-time and ‘accidental’ landlords.

“There’s a danger of a landlord switching to an incompetent agent who will not be much help because agents don’t always understand the law and regulations. Some agents, as a result, get landlords into trouble and face fines.

“That might be hard to believe, but there’s no doubt that half of the landlord clients we deal with have been dropped into trouble with local authorities by their letting agent.”

Turtle suggests landlords should check a potential agent is suitably qualified by contacting other landlord clients or checking testimonials.

He continues: “The bottom line to appreciate is that while a letting agent will be taking a slice of the monthly rent, if there are any problems such as not being properly licensed with the local authority, then it will be for the landlord to resolve – and to pay the fines and, potentially, face a Rent Repayment Order.

“Both the landlord and agent face being fined £30,000 if there is a licensing issue.”