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.

navigate the buying process with a local real estate agent

How Real Estate Agents Help Keep a Home Sale from Falling Through

By Louisiana REALTORS® • August 12, 2026
Selling a home in Louisiana? See how an experienced real estate agent helps keep your transaction on track from offer acceptance to closing.
real estate technology tools for agents

Technology Louisiana Real Estate Agents Can Use to Keep Buyers and Sellers Better Informed Throughout the Transaction

By Louisiana REALTORS® • August 7, 2026
Discover technology Louisiana real estate agents can use to keep buyers and sellers informed, educated, and confident throughout every transaction.

Louisiana Candidates Qualify for November 3 Election

By Louisiana REALTORS® • August 5, 2026
 Candidate qualifying for Louisiana’s November 3 election began Wednesday, August 5, and concludes Friday, August 7. The three-day qualifying period will establish the candidates for all six U.S. House districts, as well as judicial, parish and municipal races across the state. This election cycle includes several changes to Louisiana’s congressional races and election calendar. The state’s U.S. House primaries, originally scheduled for May 16, were canceled following the U.S. Supreme Court’s decision in Louisiana v. Callais. The Louisiana Legislature subsequently adopted a new congressional map that reduced the number of Black-majority congressional districts from two to one. Under the revised election calendar, the November 3 U.S. House contests will use an open primary system. All qualified candidates will appear on the November ballot, regardless of party affiliation. A candidate receiving more than 50% of the vote will be elected. If no candidate receives a majority, the two candidates receiving the most votes will advance to a December 12 runoff. U.S. Senate The November general election will feature Republican nominee U.S. Rep. Julia Letlow and Democratic nominee Jamie Davis. Letlow's Senate campaign has also created an open seat in Louisiana's 5th Congressional District. 5th Congressional District Several candidates have announced campaigns for the 5th Congressional District seat: State Sen. Stewart Cathey State Rep. Michael Echols Louisiana Board of Regents Chair Misti Cordell State Rep. Gabe Firment Cathey, Echols and Firment currently serve in the Louisiana Legislature. Additional candidates may qualify before the deadline on Friday. The 5th District covers portions of northeastern and central Louisiana and extends into the Florida Parishes. 6th Congressional District Congressman Cleo Fields has announced that he will not seek reelection in the newly redrawn 6th Congressional District. Instead, Fields is running in a special election for his former state Senate seat, which became vacant following the death of Sen. Larry Selders of Baton Rouge. The newly drawn 6th Congressional District extends around the Baton Rouge area and includes portions of rural communities surrounding the capital region. State Sen. Rick Edmonds has announced his candidacy. State Sen. Blake Miguez has also been discussed as a potential candidate, although the candidate field will not be finalized until qualifying closes Friday. Federal law requires congressional candidates to reside in the state they seek to represent but does not require them to reside within the specific congressional district. 2nd Congressional District Congressman Troy Carter currently represents the 2nd Congressional District, which extends from the Baton Rouge area toward New Orleans. Under the newly adopted congressional map, the 2nd District remains Louisiana's sole Black-majority congressional district. East Baton Rouge Parish Judiciary All 15 judgeships on the 19th Judicial District Court are scheduled for election following the Legislature's creation of two new judicial election subdistricts. Each subdistrict will elect seven judges, with an additional judgeship elected parishwide. Litigation challenging the new judicial map remains pending. Judicial races are among the contests being monitored by Louisiana REALTORS® and local Political Action Teams. Judicial decisions can have implications for property rights, business activity, litigation and the overall legal environment in Louisiana. Local Elections Voters across Louisiana will also consider candidates for mayors, city and parish councils, school boards, police chiefs and other local offices. While these races typically receive less statewide attention than congressional and statewide contests, local elected officials make decisions affecting land use, zoning, permitting, infrastructure, taxation and housing policy. These issues can directly affect real estate activity and development within local communities. Candidate Lists and Election Information The candidate field will not be final until qualifying closes Friday, August 7. The official list of qualified candidates is available through the Louisiana Secretary of State's Candidate Inquiry portal. The complete election schedule, including key dates for voting, registration and absentee ballots, is available through the Secretary of State's election calendar. For Louisiana REALTORS®, the qualifying period provides an early look at the candidates who will appear on the November ballot and the races that may affect real estate, property rights, development and local communities across the state.
Show More