Flood Insurance Alert!!!

Flood Insurance Alert
By: Clarence K. Lau, Esq.

In light of the historic floods that have occurred in recent years, it is important for all property owners and condominium associations to determine whether they are required to obtain, and if they have obtained, sufficient flood insurance for their property.

Flood insurance is provided through the National Flood Insurance Program (“NFIP”), which was established by Congress in 1968. The NFIP, which is administered by the Federal Emergency Management Agency (“FEMA”), requires a property owner to obtain flood insurance for any and all insurable structures located within a Special Flood Hazard Area (“SFHA”). The SFHA includes any property or land which has been determined to have at least a one percent (1%) chance of flooding in any given year, also referred to as the “base flood” or the “100-year floodplain”.

SHFA locations/areas are shown on NFIP flood maps or Firm Panels, which may be obtained from FEMA’s Flood Map Service Center website. As stated above, flood insurance must be obtained for all insurable structures within a SFHA. Therefore, if the NFIP flood map indicates that your property is located within a SHFA, you are required to obtain flood insurance.
If a condominium has multiple buildings, only those buildings specifically located within the SFHA will need to be covered by flood insurance. If the map is unclear as to which buildings within your condominium are located within the SFHA, you can request a determination from FEMA by submitting, depending on the circumstances, a request for a Letter of Map Amendment (LOMA), a Letter of Determination Review (LODR), or a Letter of Map Revision Based on Fill (LOMR-F). Please note that even if a property is shown to be located within a SFHA, it may be built at a sufficient elevation above the SFHA, that flood insurance is not required.

Under a condominium regime, if flood insurance is required, insurance premiums are paid in accordance with the condominium’s governing documents. There is no specific requirement under the Georgia Condominium Act for a condominium association to obtain flood insurance on behalf of its unit owners. There may, however, be a specific mandate in a condominium’s governing documents for the association to take on this expense. Without such a mandate, each association must review its own governing documents and situation to determine how it wishes to handle payment of the premiums. In many cases, it may make sense for the association to obtain the policy on behalf of the owners, since this ensures universal coverage of all affected units, and reduces the amount “red tape” in the event of a flood. (It is easier to submit a claim under one policy, as opposed to having to deal with multiple ones).

Please note that in the event the association pays for the flood insurance premiums on behalf of its owners, it may be able to specifically assess such premiums against only the owners of units in buildings located within the SFHA. Specifically, O.C.G.A. 44-3-80(b) of the Georgia Condominium Act states that to the extent that the condominium instruments expressly so provide, any common expenses benefiting less than all of the units may be specially assessed equitably among all of the condominium units so benefited and any common expenses significantly disproportionately benefiting all of the units may be assessed equitably among all of the condominium units. Accordingly, provided the above language is contained in the condominium’s governing documents, an association may be able to specifically assess the flood insurance premiums against only the benefited owners.

Winter Capriola Zenner can assist you in determining whether property is located within an SFHA and whether flood insurance premiums may be specially assessed. When unexpected flooding occurs, flood insurance may literally save the day.