TROUBLE FOR SALE : Watching for Red Flags : It’s tough for an agent to know everything about a property, but failure to recognize potential problems could prove costly.

From Doug Moe’s point of view, the rise in disclosure lawsuits is more than just a little unnerving.

“We’re on the line out there every day,” said Moe, a real estate broker and co-owner of Century 21 Realty Sales in Ventura.

To drive that message home, Moe said he counsels agents in his office to fill out their portions of the disclosure statement meticulously “and imagine you are standing in front of a judge.”

It is worthwhile advice. Attorneys say that real estate agents and brokers are often named along with the seller in a disclosure lawsuit--usually for failing to provide information such as a property being in a flood zone, or that houses in a certain area might be prone to cracked foundation slabs.

“Real estate agents are responsible for observing any red flags on a property,” said Mark Nelson, real estate committee chairman with the Ventura County Bar Assn.

One of those red flags should have been waving furiously, Nelson said, the day a local real estate agent took a client to see a one-story house on a two-acre lot. Despite the stuccoed structure’s suspicious oblong appearance, no one--including the buyer--questioned the integrity of the building itself.

The house turned out to be a mobile home in disguise.

“In this case, the agent should have known that an inspection under the house would have revealed that there were wheels,” Nelson said. The seller and both real estate agents ended up paying the difference in price between a mobile home and a frame-construction house.

Then again, it is nearly impossible for a real estate agent to know about some aspects of a property.

Ventura real estate attorney Michael Muirhead recalled a recent case in which a home buyer was told by the seller that it was all right to use the neighbor’s driveway as his own. The seller claimed to have something called “prescriptive easement,” which basically states that if a person uses something on a landowner’s property over a long enough period of time, the landowner eventually can lose the right to challenge such use.

Three months after the man moved in, the neighbor put up a fence to prevent the new owner from using the driveway. The man sued to get his driveway rights back.

The outcome of the case? “In order to claim prescriptive easement rights, you have to (use someone else’s land) in flagrant disregard for the owner’s rights,” Muirhead explained the rule, which many have called one of the quirkiest real estate laws on the books.

“In this case, the former owner admitted that he had received permission from the neighbors to use the driveway,” he said. “You can’t receive permission and be in flagrant disregard at the same time. So the new owner lost.”

Parking out on the street might not be so bad. But some disgruntled home buyers say paying bundles of money to attorneys just so they can hear something similar from a judge isn’t worth the trouble. So instead of battling it out in court, some try to work things out on their own.

And sometimes, it appears, they succeed.

Linda Corwin, a CPA and real estate attorney in Westlake Village, recalled one case in which a new buyer awoke one morning to the sound of stomping outside her bedroom window. When she pulled the curtains aside, she was startled to see two large eyes peering at her curiously. It was her neighbor’s heretofore unknown horse.

“We were able to settle it,” Corwin said. Instead of suing the former homeowner for failing to mention the equine Peeping Tom, “My client gave up a portion of her property for the relocation of the horse corral.

“It was worth it,” Corwin added. “Now she can sleep in the mornings.”