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Archive for December 30, 2011

No Return Phone Call for 24 Hours

return phone call

24 Hours

Can anyone tell me why real estate agents cannot return a phone call, a text, or an email within 24 hours?

Under R4-28-1102(2) of the Arizona Administrative Code:

R4-28-1102. Property Negotiations

Except for owner listed properties, negotiations shall be conducted exclusively through the principal’s broker or the broker’s representative unless:

1. The principal waives this requirement in writing, and

2. No licensed representative of the broker is available for 24 hours.


return phone call


Agents use smart phones that allow them to answer phone calls, text, or read/answer email.

Voicemail allows the agent to change their voicemail message each day, especially when they are going to be busy and may not be able to return a call as quickly as on another day.  Technology is awesome!!

So why do agents not return phone calls, text messages, or emails for over 24 hours?

24 hours

As an instructor who teaches other than the Sedona area, I hear agents complaining bitterly about the lack of communication within our industry.  Sad.  At first I thought perhaps those older agents who were not tech-savvy were the culprits, but no.  According to agents of all ages, the lack of communication occurs across the generations.

Not good.

Our consumers are entitled to more and better.

In many classes, educators try to remind agents to define the means of communication with clients prior to establishing a working relationship.  Most people have preferences.  Ask them what they prefer and work to return communication within 15 minutes if possible or at your earliest convenience.

how2arizona real estate LLC requires the agent’s phone number an signs, websites, ads, etc.  We want you to be able to go straight to the agent for information.  If you cannot reach the agent, call Kathy Howe 928-274-4088.  As broker, I can assure you that you will get a call back within 24 hours…My message is changed every day to let you know what I have on my agenda, and when I might be free to speak with you.  Like most agents, the more detailed a message, the easier it is for me to have the information for you when I return your call, text, or email.

24 hours

When you have a question, it can seem like an eternity!!

Kathy Howe, owner/broker

  • how2arizona real estate LLC
  • 928-274-4088


Proud Uptown Resident

24 Hours

Uptown Sedona and West Fork

Map of Uptown Sedona, AZ

Map of Uptown Sedona, AZ



Uptown Sedona Homes for Sale

If you’re looking for a property for sale in one of the most stable neighborhoods in Sedona, give Kathy Howe a call:  928-274-4088.

Here are a few of our favorite Uptown listings:  Click here.

Here is the Sold information for Sedona areas, including Uptown:  Click here.


Area 41 includes Uptown.



This is the time to come to Sedona, enjoy the cool, brisk weather, hike Brins Mesa, stop at West Fork for a walk along Oak Creek while you “leaf-peep” the fall colors, stop at Junipine Resort for lunch, or call to see if you can dine at Garland’s Resort.

Fall in the Sedona area is one of the most beautiful times of the year.  From Jazz on the Rocks, the Plein Air Festival at the Sedona Art Center, Halloween on Main Street, start of the Sedona Chamber Music’s 29th season, and strolling through Tlaquepaque, you will sense and feel the serenity, peace, and sense of self that we residents feel all year round.

For more information about what to do while in Sedona, visit the Sedona Chamber of Commerce.

Ladies:  Chico’s is at The Pinon Shops at the Hyatt in Uptown!

For hiking information, visit The Hike House, or venture out on your own.  To help you with hiking information, click here.  For Sedona Restaurants, try Picazzo’s, Heartline Cafe, The Coffee Pot Restaurant, the Hideaway, Ken’s Creekside, the Barking Frog, Shugrue’s, Javelina Cantina, Taos Grill, Hundred Rox at Amara, L’Auberge de Sedona, Canyon Breeze for dancing on the weekends… The Cowboy Club in Uptown features buffalo burgers and cactus fries…


This picture was taken 11-10-10 as part of Kathy’s annual fall walk along Oak Creek in West Fork.  She’s been doing it since the early ’70s and it only gets better every year.

More pictures of the West Fork area can be found at SedonaKathy’s website.

Once you have savored the tastes, smells, and sights of Sedona and the surrounding areas, consider making Sedona a permanent place for you to vacation by looking at possible second, third, or fourth homes.  If you really sense the beauty and peace of Sedona, consider this your new permanent residence.  Let Kathy show you properties throughout the Sedona area… it just might be the first day of the rest of your life!

“Kathy, again thank you, thank you for your encouragement and support in this process.  It’s more than a job to you and we appreciate your patience and overwhelming enthusiasm of Sedona.  That really sold us.  A building site in this area was not a consideration and being non AZ bumpkins we sort of had an idea of what we wanted but truly had no clue.  YOU sold the neighborhood and that is what we really wanted.  At this point in our lives, we don’t want to be secluded with a gorgeous view.  Uptown is close to most things we need and when we finally build and live there can investigate the rest depending on our needs.
Thank you Ms. Kathy.  Love ya”

Kathy Howe aka SedonaKathy 928-274-4088, is a resident of…

Uptown Sedona

Sedona Golf Resort

Sedona Golf Resort Golf Course

Sedona Golf Resort Golf Course


Play Golf at the Sedona Golf Resort

Sedona in the fall is awesome!  Beautiful fall colors begin to dot the landscape.  The weather is clean and crisp.  The golf is outstanding!  And there are specials.  Grab your clubs and book a tee time at the Sedona Golf Resort.

Sedona Golf

The Sedona Golf Resort

A day of Sedona golf is one of the best things you can do for yourself.  When your game is over and you have a chance to look around, call Bert Berkshire to show you some of the properties for sale at the Sedona Golf Resort.  Bert has a great listing at 189 Ridge Rock Road.  It’s one of the best priced of the Sedona homes for sale in the area an it’s barely been lived in!  On a cul-de-sac…

Sedona Golf  Call Bert:  928-300-3523

Let Bert show you

The Sedona Golf Resort

Sedona Golf

And spend some time at the Hilton Sedona Resort and Spa – then maybe head over to Tequa for dinner at one of the restaurants.

One of Sedona’s best restaurants can be found at Cucina Rustica.  One of the finest Italian restaurants in the area.

Shopping at the Outlet Mall…

Sedona Golf

Sedona’s Golf Resort area, located south of Sedona on SR179 is one-of-a-kind in vacation living.  Try it.  You won’t be disappointed.  The Resort is located near the Village of Oak Creek and its club house, tennis, and golf course.  The area is perfect for those who want to enjoy Arizona and avoid the big city life.  Two great areas for outdoor living.  Sedona golf is the best!

Try the Sedona Golf Resort



Uptown Sedona Listings

Uptown sedona

Uptown Sedona Listings


Uptown Sedona listings

540 Van Deren, Sedona, AZ 86336  $374,500

Uptown Sedona listings

More Uptown Sedona listings to come…Uptown Sedona listings

Kathy Howe aka SedonaKathy

Kathy lives, works, plays, and serves on the Board of Directors of Uptown Sedona’s Main Street Program.  Uptown is the original center of Sedona with historical information, the Jordan Park Heritage Museum, trail heads, views, shopping, restaurants, and is part of the Gallery district.

Uptown Sedona Homes for Sale

Uptown Sedona Listings


My Sedona

Forest Uptown

My Sedona…



We are delighted you’ve chosen to visit Sedona!

The first thing you’ll be asked is how long you’ve lived in Sedona.  It’s part of the culture to determine how rooted you are in the community.  Trust me.  Even if you just arrived to spend the day at Tlaquepaque, unless you assert your visitor status, the question will come up.

Next, you will be judged on how you navigate the round-abouts.  If you get through the one at Sr179 and Schnebly without a “honk”, you’re ready to tackle the big one and go to the Post Office without stopping or getting hit.  How do you navigate a round-about?  According to my niece, Reilly, who lives in New Zealand: “If the car coming your way is bigger and faster than you, yield!”  Technically, if you’re in the “round” portion, you have the right-of-way.  For heaven’s sake, do not stop in the round-about to let cars go by.  That is a local reason to use the horn.

So you’re a night person. Hopefully you filled up on nightlife before driving to Sedona.  Oh, it’s not that we don’t have a “night life”, it’s just that our version of “tripping the light fantastic” might be a bit different than yours.  Did anyone tell you that the average age of a Sedona resident is 51?  Having said that, if you want to kick up your boots or stilettos, you should be directed to the Canyon Breeze on the weekends, Creekside in the evenings, or Relics, down the road in West Sedona,.  New to the entertainment scene is Sound Bites at the Hyatt Shots in Uptown.  Nightly entertainment. No, you won’t see many residents at those places as there are not enough designated drivers in the Sedona to get us home.  It’s hard enough at our age to drive, let alone blow into a contraption before starting the car.  That, and, in West Sedona there are no streetlights along SR89A.  No telling where you might end up.

The residents. Are they friendly?  Most of the time.  You can find them early in the morning walking in the foothills behind Uptown Sedona, from Forest to Jordan Park, as singles, doubles or small packs.  Some will have dogs on leashes while the cat people will be the fast walkers pacing themselves and ending their morning exercise with a stop at Starbucks for a Latte and a paper.  The neighborhood is friendly.  Just be careful.  If the gossip is good, it will be hard to get them to move to the side of the road to let your car go by.  Have patience

What’s to love about Sedona? The pesky Javelinas who root through the bulbs, flowers, and prickly pear cactus left unattended, unfenced, and sometimes non-existant; but, if Javelina are not seen for several weeks, residents call out across the arroyos or down the hills (notice how sound carries here?) asking “Have you seen the Javelina?”  Next, they will put out food to lure them back.  Same with the deer.  Bucky and Buckette are always welcome in Sedona.

Cocktail hour. Rock naming.  Did you know that the number of rocks named, are in direct proportion to the number of Martinis consumed?  You can now understand why the residents prefer their own decks or patios instead of venturing out to a restaurant or bar.  Dancing after rock-naming is unheard of in Sedona.

Peace and quiet. Even in the Uptown area of Sedona where dark-sky compliant lighting casts a misty glow over SR89A and SR179, the neighborhoods are dark as pitch.  Going next door to a neighbor’s house after dark requires at least one LED 1000 lumen flashlight in order to find the road, let alone the house.

Shopping Sedona. You can tell the female residents by the “Chico’s” look.  It has been heard:  “Chico’s?”  “Chico’s!!”  The Sedona male residents?  Aloha shirts.  Well, think about it.  Would it be better if they wore their red dirt shirts?  And welcome Petsmart!  Monday of Labor Day weekend, Petsmart did a “soft” opening, followed by a Grand Opening on 9/10.  You now have the added advantage of identifying a resident from a visitor by the free Petsmart T-shirts!

Sedona has changed, but then who hasn’t.  Sedona isn’t the same unfinished, diamond-in-the-rough that I met in the early ‘70s.  She’s all grown up now, added a little gloss and glitter, and she has enhanced the scenery in every direction. My Sedona is still Sedona Schnebly: a woman of immense strength and character.

Visitors, come back and mingle with us in Uptown Sedona where we natives are friendly!

Kathy Howe aka SedonaKathy

Kathy Howe aka SedonaKathy


Uptown Sedona resident

Serving Our Sedona Buyers and Sellers

Sedona Buyers


Manzanita Dr Sedona, AZ

501 Manzanita Drive, Sedona, AZ

“Kathy, again thank you, thank you for your encouragement and support in this process.  It’s more than a job to you and we appreciate your patience and overwhelming enthusiasm of Sedona.  That really sold us.  A building site in this area was not a consideration and being non AZ bumpkins we sort of had an idea of what we wanted but truly had no clue.  YOU sold the neighborhood and that is what we really wanted.  At this point in our lives, we don’t want to be secluded with a gorgeous view.  Uptown is close to most things we need and when we finally build and live there can investigate the rest depending on our needs.
Thank you Ms. Kathy.  Love ya”

The pleasure was all mine.


Sedona buyers come to us filled with anticipation of owning a piece of the most beautiful landscape in Arizona.  360 degrees of awesome views.


How we assist them in translating those feelings into the actual purchase is the key.  Are they looking for a deal?  Are they looking for their future?  What kind of future lifestyle?


Sedona buyers:

When you are interviewing an agent to assist you in your purchase, find one who knows, loves, works, and lives in Sedona.  You’ll feel the love.  For those of us who live, work, and play in the Uptown Sedona area, it’s easy to show people the lifestyle.  Neighbors walking every AM from Forest St to Jordan Park.  The names of their dogs.  Where the coyotes, Javelina, and the deer were last seen.  Neighbors caring for the needs of each other.  If it’s the small town environment you are looking for, Uptown Sedona has it all.


Our thanks to Lydia Reynolds at Pioneer Title for her excellent customer care during the escrow process, and to Tim Hammes who redid the survey, and to Steve Burnett of Arizona Waste Water who provided the soil testing.  We appreciate all you did for the Sedona buyers and sellers.


None of this would have been possible if it had not been for the Sedona sellers of this lot.  Watching their property values drop over the last 5 years to never thought of lows.  Thank you for making this possible for the new “settlers”.  You have made their dreams a reality.Kathy Howe aka SedonaKathy


Kathy Howe aka SedonaKathy

Sedona Buyers and Sellers

An Uptown resident representing Sedona buyers and sellers

Arizona’s Dual Agency is Limited Representation

Arizona allows disclosed Dual Agency

Arizona's Agency Structure

This is the real estate structure in Arizona.  Salespersons and Associate Brokers hang their real estate licenses with the Employing Broker and are supervised by the Designated Broker.  All listing employment agreements and all buyer broker agreements are taken by the salesperson or associate broker for the employing broker.  Each real estate salesperson or associate broker is usually and Independent Contractor who works with the employing broker through an Independent Contractor Agreement.

Many sellers and buyers never meet the Designated Broker of the Employing Broker, the real estate brokerage firm, and are only familiar with “their” agent.  So it’s easy to understand why there is confusion and misunderstandings when Dual Agency occurs.

When a salesperson with the same real estate brokerage firm who works under the same Designated Broker writes an offer on a property listed by that firm, Dual Agency has occurred.  It occurred when the property showing took place…even before the offer was written…

Dual Agency = Limited Agency

It starts when the showing occurs and the disclosure should be made by the salesperson, if only casually.  The Arizona Association of REALTORS(R) have a great agency disclosure form called the READE form which includes disclosure about Dual Agency.

Here’s how Dual Agency works:

Arizona Dual Agency

If you want more information on how Dual Agency works in Arizona, read this post on our sister site, how2educate LLC

  • Ask questions if you are writing an offer on a property listed by your agent
  • Ask questions if your agent is writing an offer on a property within their brokerage
  • Ask your agent how things will work if an offer comes in from an agent with your brokerage
  • Ask how you will be represented in a Dual Agency situation

Successful Dual Agency transactions work when salespeople work for the equal interests of the principals.

Disclosed Dual Agency can work.  We call it Limited Representation.

See Lerner vs DMB.  The appeals court opined that a broker and a principal have the right to negotiate their representation and we do that through the Consent to Limited Representation standard Arizona Association of REALTORS form.

Kathy Howe  Owner/Broker, how2arizona real estate LLC,

and owner/administrator/educator of how2educate LLC

Arizona’s Dual Agency aka Limited Representation

Not Everything Did I Learn In Kindergarten


The REALTOR(r) Code of Ethics

Yesterday I had the privilege and pleasure of attending one of the best real estate continuing education classes ever. 25 years. The class was put on by Lin Ferrara of Eagle University, First American Title, and featured Bill Gray of Arizona School of Real Estate and Business, along with our very own, Jim Sexton, of John Hall. The class was “The Code Rules” with a certificate for 3 hours of Commissioner’s Standards. It didn’t stop there! That same class gave all REALTOR® attendees their “Quadrennial Code of Ethics Training”…yes! Double value!  REALTORS(r) rock!!


So what did I learn other than what I learned in kindergarten?

First, we need to review that insightful poem by Robert Fulghum which was read by Jim Sexton at the closing of the class:
  • “…
  •  Share everything
  •  Play fair
  •  Don’t hit people
  •  Put things back where you found them
  •  Clean up your own mess
  •  Don’t take things that aren’t yours
  •  Say you’re sorry when you hurt somebody
  •  Wash your hands before you eat
  •  Flush
  •  Warm cookies and cold milk are good for you
  •  Live a balanced life
  •  Learn some and think some
  •  And draw and paint and sing and dance
  •  And play and work everyday some
  •  Take a nap every afternoon
  •  When you go out into the world, watch out for traffic
  •  Hold hands and stick together
  •  Be aware of wonder

“Be aware of wonder.” My personal favorite.

After 25 years in the real estate business as a REALTOR(r), salesperson, a broker, a trainer, an educator, a past member of the Arizona Real Estate Advisory Board, and an ardent believer that “if you can dream it, you can do it!”, I was profoundly moved and reminded of what professionalism means through the REALTOR(r) Code of Ethics and our Arizona statutes and rules.

The REALTOR(r) Code of Ethics

What did I learn?

Article 1: I should never use the term “free” when I advertise my buyer-broker-value to a prospective client. Nothing in life is “free”.
Article 2: I must disclose what I know about my listing, but I am not required to investigate beyond my “standard of care”. Apparent is something I can see. Latent is different.
Article 3: If I am not a member of a board/association, I must contact the listing agent before showing a property to see if the listing agent will be cooperative with me and pay me (written agreement for commission). Until we have a statewide MLS, I could work for “free” if I’m not careful.
Note:  I must understand what a variable rate commission means and alert other brokers to put on their “best game” if I represent the seller, and a buyer, at a reduced commission, in a multiple offer situation.
Article 4: I must disclose any interest I have or any interest my family has in a property. If I can’t legally marry them (or remarry them), I should disclose them.
Article 5: If I want to purchase a property so I can “flip” it, I should not undervalue it if asked by the seller to give it a value. “Flipping” is okay. Under-puffing the goods is not.
Article 6: I must disclose the $xx “bonus” I get from the home warranty company for selling or giving a home warranty at closing.
Article 7: I must get the approval of my buyer for my broker to receive a “bonus” from the listing broker if my buyer buys the listed property.
Article 8: I must follow my broker’s office policies about earnest deposits and not keep client cash or checks in my desk drawer. I must turn over these monies to my broker to keep in the broker trust account so the broker can account for these monies to the client, deposit them with an escrow company Better than me losing the cash or the checks!!
Article 9: I must leave you, my client, with a copy of any agreements, so I will email the pdf file to you after we have written and signed it. Digital is great! Save a tree! We all have digital abilities through ZipForms, eSignatures, and the Internet. Life is good.
Article 10: I must never discriminate. If you are red, yellow, black, brown, green, single with children, gay, lesbian, Irish, Jewish, male or female, legally blind or different from me, I should find you a house (and treat you all equally)
Article 11: I will continue not to do certain types of real estate, like business broker biz or property management, because I don’t give it my best. I will refer business if I cannot properly service a client according to the standard of care. I will let my client know that we will do things differently if I cannot be as good as I can be. I want Christmas cards every year.
Article 12: If I advertise “free” anything, I need to explain the terms and conditions. “Free, but…”
Article 13: I should not overstep my 26th AZ Constitution Amendment abilities by giving legal advice on issues that I do not have expertise on, in, or around. Attorneys are good.
Article 14: If I am accused of being a bad REALTOR®, I’ll participate in the process so I can show I’m a good REALTOR®.
Article 15: Don’t talk “stink” about competitors. Don’t leave verbal cleat marks on the backs of competitors to get a listing or gain a buyer.
Article 16: I can go door-to-door with door hangers and put them on a door with a sign on the property if I am doing all doors in the area. It’s like mailing postcards…
Article 17: If I cannot get along with, disagree with, or am having a dispute with, another REALTOR®, I will submit it to the REALTOR® family to settle.
I learned that the reason I am still in real estate, and a REALTOR(r), after 25 years is because of the REALTOR® Code of Ethics, and because of those of you who were in the class. We learn, participate, and teach others, and in doing so, raise the bar of professionalism.
We are a profession.  I am proud to be a member of the real estate profession.

Kathy Howe, Owner/Broker  (proud REALTOR)REALTOR

  • how2arizona real estate LLC
  • 450 Jordan Road   “C”
  • Sedona, AZ 86336
  • 928-274-4088
REALTOR(R) member of the Sedona Main Street Program in Uptown and resident of the Uptown area.

“As Is” Means “Buyer Beware”

as is

Are you thinking of purchasing a home? It’s a great time to buy!

“As Is” = “Buyer Beware”

Know that if you are going to purchase a foreclosure or a “short sale”, you will be required to sign an “as is” addendum. That addendum may be a bank-attorney drafted “as is” paragraph in the purchase contract addendum, or it could be the Arizona Association of REALTORS(R) “as is” addendum.

Whichever, you need to give some thought to what the “as is” addendum means.

Is “as is” just a statement that the Seller is not going to pay for repairs?

No. Absolutely not.

  • It’s about you taking the property in its current condition.
  • It’s about you not getting any warranties.
  • It’s about the Seller having to disclose all material latent defects.
  • It’s about the Seller having to give you time for inspections.
  • It’s about you doing inspections.
  • It’s about you checking and rechecking information.
  • It’s about you having to pay for repairs that are normally costs of the Seller.

Your Buyer’s agent will give you direction about city, county, state officials to contact. The HOA, homeowner association, information will be made available to you and you should talk with them and the neighbors. Be sure to ask for the “pickiest” home inspector. Yes. Without any Seller disclosure on a foreclosure, you want an inspection that addresses everything. You want an inspector who tells you the “good, bad, and the ugly.”

Arizona’s Home Inspectors are certified, but there are still A, A+, and “B” inspectors. Ask your agent for names of 3 inspectors and spend the time to interview them. Don’t be blown away by a huge binder with lots of paper, but rather look at the background of the inspector, and ask for references.

“As Is”

More information can be obtained about the language of the purchase contract and the “as is” addendum in a post at how2educate’s website.  Click here.

The more you know about “as is”, the better your buying experience.

While you are looking for Sedona, Verde Valley, Jerome, Clarkdale, Cottononwood, Cornville, Village of Oak Creek, or Sedona Golf Resort properties for sale, you’ll give us a call.  We can assist you with “as is” property conditions.

Kathy Howe  Owner/Broker  928-274-4088

as is

Sedona “as is” properties for sale include foreclosures, short sales, and traditional sales.

Coconino County Septic System Worksheet

Coconino County Alternative Waste Disposal System worksheet when sewer hook-up is not available.

Use this worksheet when trying to decide what size waste system you will need when your build your dream home.

Coconino County

One note to be concerned with is the notation that in Coconino County, any room that is 70 square feet is considered a bedroom for the purpose of computing septic or alternative waste system size.

Whether you purchase one of the many Sedona homes, lots, or properties for sale in the Uptown, Palisades, Chapel Area, the Coconino County Rules will prevail.  See the map bifurcating Sedona into 2 separate counties:  Coconino County and Yavapai County.  The City of Sedona has its rules as well.

Coconino County


Consulting with your contractor about the need for a good engineer when you build your dream home, or consulting with the engineer before you decide to remodel the dream home you have purchased will go along way in saving you money if you do not have sewer hook-up.

Procedures for your Coconino County site evaluation.

Coconino County remodel or addition requirements.

If you are purchasing a Sedona home for sale, it is wise to ask the listing agent for a copy of the Coconino County alternative waste disposal system approval.  There’s a lot of information to gain and you may wish to know about the system before you purchase rather than finding yourself in the middle of a due diligence period without time to understand the system and what it will cost to maintain.

Kathy Howe aka SedonaKathy

  • how2arizona real estate LLC
  • 450 Jordan Rd “C”, Sedona, AZ 86336
  • 928-274-4088

Proud resident of Uptown Sedona (Coconino County)

What Does Title Insurance Cover?

title insurance

You got Title Insurance…

…when you bought your home you got title insurance to cover you for certain defects.

While you may never need to file a claim against your title insurance policy, read how it came into play for this party:

“A battle over responsibility for a failed commercial development in north Scottsdale involving allegations of fraud, bad faith and breach of contract was resolved last week when a jury ordered defendant First American Title Insurance Co. to pay the plaintiff companies, the Equitable Troon H LLC and the Equitable Troon K LLC, about $1.6 million in damages.

The case was tried in Maricopa County Superior Court last week before a nine-member jury, said Dennis Wilenchik, a Phoenix attorney who represented the plaintiffs.

The legal conflict began with the 2005 purchase of two properties adjacent to the upscale Troon North community in north Scottsdale by an investment group known as Morgan-Sklugan LLC. Investors in the project included John Vatistas, then-owner of Camelback Title Agency in Phoenix, who now is co-owner of Russ Lyon Sotheby’s International Realty in Scottsdale.


Timothy Barton, First American Title’s Phoenix attorney in the dispute, did not return calls seeking comment Wednesday afternoon.

The investment group hired Camelback Title to perform due diligence on the properties for purposes of buying and developing a commercial center that would have included shops and restaurants, according to the plaintiffs.

They also sought and procured title insurance through First American, a publicly traded company based in Santa Ana, Calif., and one of the nation’s largest title insurers.

Title insurance covers financial losses incurred because of “defects” in the title to a property.

A defect is anything that lowers a property’s value or calls into question the validity of the insured titleholder’s claim to it.

In this case, Morgan-Sklugan’s investors learned after purchasing the land that it was subject to the Troon North homeowners association’s covenants, codes and restrictions, a fact not disclosed before the sale.

Wilenchik said it was a revelation that stopped the project dead in its tracks and prompted the investors to file an insurance claim with First American.

According to court documents, First American’s position on the legitimacy of the claim changed a number of times.

It initially denied the claim and then agreed to honor it, but finally argued that the claim was invalid.

Wilenchik said the title company’s numerous reversals appeared to be part of a strategy to wear out his clients, who refused to go away.

At one point, the title company even filed a counterclaim arguing that Troon H and Troon K were not covered under the policy because of an error in early court documents listing them as Arizona companies, when in fact they were incorporated in Nevada.

That argument was dropped shortly thereafter, Wilenchik said.

On Friday, the jury awarded the plaintiffs $627,000 for breach of contract, $200,000 for acting in bad faith, and $750,000 in punitive damages.

Wilenchik said the case is significant because title-insurance companies rarely are found guilty of acting in bad faith, a legal concept that means to act with malicious or deceitful intent.

“I was pretty thrilled with it,” he said of the verdict. “They (the investors) bought insurance and paid their premiums. Their claim should have been covered.”

Check your Title Insurance policy carefully when buying a property.  Don’t be afraid to ask questions.

Kathy Howe aka SedonaKathy

how2arizona real estate LLC

450 Jordan Rd, “C”, Sedona, AZ 86336