Understanding the Duty to Notify of Obtain and Maintain

LOUISIANA REALTORS • February 22, 2019
By: Patricia B. McMurray and Danielle Aymond | Baker, Donelson, Bearman, Caldwell & Berkowitz, PC

In July 2017, Louisiana REALTORS® ("LR") published an article on “" Obtain and Maintain Insurance Requirements " to provide information to REALTORS® about the perils of failing to purchase flood insurance for property that had previously flooded and received federal money. In addition to the article, a sample “ Flood Insurance Purchase Requirement Addendum” form ("Addendum 1") was provided to REALTORS® for assisting sellers in complying with the requirements of the obtain and maintain law and the duty to notify it includes. 


To supplement the article, in December 2018, LR published another article to further explain this legal requirement and its application.


Since such time, several REALTORS® have contacted LR to inquire about how to find the necessary information to complete the sample Addendum 1 when their sellers do not know the amount of FEMA aid received by previous owners of the property. In a State that sees flooding every year, and no region is safe from water intrusion, it is no surprise this is a wide-spread concern. This article provides additional information on Addendum 1 and an alternative sample Addendum ("Addendum 2") when the information is not available to complete the initial sample Addendum 1.

OVERVIEW

The law requires that in the event of the transfer of any property that has previously received disaster assistance, and that property is in a Special Flood Hazard Area (SFHA) [1], the transferor/seller shall, not later than the date on which such transfer occurs, notify the transferee/buyer in writing of the requirements to:

(A) obtain flood insurance in accordance with applicable Federal law with respect to such property, if the property is not so insured as of the date on which the property is transferred; and

(B) maintain flood insurance in accordance with applicable Federal law with respect to such property.

If the transferor/seller fails to disclose, and the property floods again and the buyer did not have flood insurance, the transferor/seller shall be required to reimburse the Federal Government in an amount equal to the amount of the Federal disaster relief assistance provided with respect to the property.

FEMA has published in policy that the property owner must obtain and maintain flood insurance coverage for at least the amount of disaster assistance they receive from FEMA. Applicants may satisfy the insurance requirement by purchasing private insurance or a policy through the NFIP.

WHAT ARE THE POTENTIAL AMOUNTS?

The statute does not require the actual amount of assistance be disclosed by the seller, however buyers may want to obtain this information to weigh the costs of minimum required policies. There are three major programs that Louisiana has historically used for disaster assistance for residential property:

Individual Assistance up to $33,000

Hazard Mitigation up to $100,000

CDBG-DR up to $150,000

These three sources of disaster assistance can apply to flooded homes in Louisiana spanning back well-past the days of Katrina. Any of these programs can be combined in various ways and can total a minimum insurable amount of up to $283,000.  

Commercial property can be much more expansive. It may have qualified for FEMA Public Assistance which can reach funding in the millions for large projects. The requirements to insure are also vastly expanded as the law requires insurance regardless of the SFHA and regardless of the type of hazard.

HOW TO FIND OUT:

When a seller or buyer wants to know the minimum amount required for a flood policy, a public records request for this information can be made to retrieve such information from the following:


Individual Assistance or Public Assistance | FOIA request to FEMA: 


www.dhs.gov/dhs-foia-request-submission-form.


Hazard Mitigation | Governor’s Office of Homeland Security and Emergency Preparedness:


http://gohsep.la.gov/ABOUT/PUBLIC-INFORMATION.


CDBG-DR | OCD-DRU Office:


https://www.doa.la.gov/Pages/PublicRecordsRequests.aspx.

THE BOTTOM LINE

In response to REALTORS® requests, an additional sample addendum to the “Louisiana Agreement to Buy and Sell can be downloaded. Although Addendum 1 provides the most complete information to buyers, Addendum 2 will put buyers on notice of the legal requirement of the Obtain and Maintain notice, and may be used when the Seller was not the actual recipient of disaster assistance and does not know the amount of disaster assistance the property received. Addendum 1 is also attached and can be used when the seller received FEMA funds or has information regarding the FEMA funds received by the previous owners. Addendum 1 and Addendum 2 are sample forms. You may wish to create your own form in consultation with your counsel. Please note disclosure of the "obtain and maintain" requirement must be included in the Act of Sale.

DOWNLOAD THIS ARTICLE

[1] The SFHA includes Zones A, AO, AH, A1-30, AE, A99, AR, AR/A1-30, AR/AE, AR/AO, AR/AH, AR/A, VO, V1-30, VE, and V; and can be verified at https://www.fema.gov/special-flood-hazard-area.

Consumer Guide Update: 10 Tips for Unpacking

By Louisiana REALTORS® • June 18, 2026
NAR’s latest consumer guide, “10 Tips for Unpacking Smartly After a Move,” was developed to help ease the burden buyers may feel when surrounded by boxes. For your clients on the cusp of a move, the guide suggests establishing a priority unpacking order, wiping down each room before unpacking, discarding boxes quickly, having garbage and donation bags at the ready, and more. Share the new guide along with the companion guide “10 Tips for Packing Smartly for a Move.” As a reminder, all guides in this series are available for download—in both English and Spanish—on facts.realtor . Please allow up to two weeks for the Spanish version of the latest resource to be translated and uploaded. For ease of reference, below is a list of the most recent guides: NEW: 10 Tips For Unpacking Smartly After A Move UPDATED : Multiple Listing Services Overcoming Roadblocks to a Sale or Purchase How Solar Impacts a Real Estate Transaction Navigating Interest Rate Shifts Thank you for your continued engagement with the “Consumer Guide” series and for sharing the resources with prospective clients to ensure they have the information they need to find success in their home buying or selling journey. Remember that these guides are for informational purposes only and are not meant to enact or change any existing NAR policy. Check out the next consumer guide on identifying homebuying wants vs. needs.
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Louisiana Residents Encouraged to Use New LDI Tools to Prepare for Hurricane Season

By Louisiana REALTORS® • June 9, 2026
From the Louisiana Department of Insurance: During a press conference today with Governor Jeff Landry, Insurance Commissioner Tim Temple announced that registration for the next round of the Louisiana Fortify Homes Program (LFHP) will open at 8 a.m. on Monday, June 1, and will include 3,000 grants. The registration period for this lottery will be open for three weeks, closing at 5 p.m. on Friday, June 19.  During the press conference, Gov. Landry signed HB 1187 by Rep. Paul Sawyer, which will allow Louisiana Citizens Property Insurance Corporation to transfer $50 million in additional Katrina bond assessment funds to the LFHP. Combined with the $30 million in funding the program will receive through taxes and fees on insurance entities, the LFHP will receive a total of $80 million this year. “By lowering overall losses, we can reduce insurance and reinsurance costs, draw more insurers into the market, motivate existing companies to write additional policies and lower insurance premiums,” said Commissioner Temple. “That is exactly what the Louisiana Fortify Homes Program is designed to do.” The list of coastal parishes that are eligible to participate is expanding to include Acadia, Jefferson Davis and Lafayette parishes. Additionally, homeowners who live in the portions of Ascension, Calcasieu, Iberia, Livingston, St. Martin, St. Tammany, Tangipahoa and Vermilion parishes that were previously not included in the program will now be eligible to participate. A map showing the full list of eligible parishes is available on FortifyHomes.La.Gov . “Louisiana is the fastest growing state in the country for Fortified roofs, and that growth is not by accident—it is the result of strong support from Governor Landry and legislators like Chairman Talbot, Chairman Firment and Representative Sawyer, targeted program design, and a clear recognition that strengthening homes is one of the most effective ways to reduce insurance losses,” said Commissioner Temple. “At the end of the day, this program is about more than just roofs. It is about protecting families, it is about strengthening communities, and it is about putting Louisiana in a stronger position—both physically and economically—to face the challenges ahead.” To participate in the lottery, homeowners must register during the June registration period. Homeowners who registered for a previous round but were not selected must register again to participate. People who register on the last day of the registration period have the same chance of being selected as those who register on the first day, so there is no need to rush to register as soon as the period opens. When registering, homeowners will need to upload their homestead exemption, insurance policy declarations page that includes wind coverage, and flood insurance declarations page if the residence is in a flood zone. Homeowners who need assistance obtaining a copy of their homestead exemption should contact their parish tax assessor. Homeowners can contact their homeowners and flood insurance companies or agents for a copy of their policy declarations page. Homeowners are required to create a profile in the LFHP system before registering for the lottery and may do so by visiting the LFHP website and clicking the Login button. Homeowners who previously created a profile may use the same one for this and future rounds. Once the lottery registration period closes, the LFHP will randomly select 3,000 participants and send email notifications to registrants about whether they were selected to participate. These selection notices will be sent via email beginning on Monday, June 22. There are several program requirements that homeowners should be aware of before registering. Those interested in the program are encouraged to review eligibility information and frequently asked questions at FortifyHomes.La.Gov to determine whether their home meets the requirements for the program. If selected to participate in the grant program, homeowners will be financially responsible for having the home evaluated by a FORTIFIED-certified Evaluator as well as costs for the roof upgrade including permits, inspections and construction costs beyond the amount of the grant The LFHP provides grants of up to $10,000 for homeowners to upgrade their roofs to standards set by the Insurance Institute for Business & Home Safety. The program helps Louisiana homeowners strengthen their roofs to better withstand hurricane-force winds.
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