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#2091354 - 08/03/16 05:17 PM Detached Structures
Noleman Offline
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We have a property that we are looking to make a loan on that was the customers primary residence but is now used as office for their business. They currently live elsewhere. The dwelling that they use as an office is not in a flood zone however a small detached barn on the property is in flood zone A. Would the detach structure exemption apply in this case?

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Flood Compliance
#2091357 - 08/03/16 05:22 PM Re: Detached Structures Noleman
NSF, CRCM Offline
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NSF, CRCM
Joined: Apr 2013
Posts: 410
VA
IMO, no. Since the dwelling is not being used as a "residential structure" I don't think the detached barn would qualify even if it was being used for personal, family or household purposes.

Is the barn being used for commercial purposes? If so the answer is pretty easy. (No)

Hopefully a guru will reply to either confirm my answer or dispel it. smile
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#2091373 - 08/03/16 05:54 PM Re: Detached Structures Noleman
TMatt87 Offline
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TMatt87
Joined: May 2011
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Idaho
Definitely not a guru, but I agree with NSF. The detached structure exemption only apply to structures detached from a residential property. If the dwelling has been converted to an office, it no longer qualifies as residential.
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#2091375 - 08/03/16 05:57 PM Re: Detached Structures Noleman
TMatt87 Offline
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TMatt87
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Idaho
This is from FDIC's FIL outlining the changes from HFIAA:

Detached Structures: The final rule includes the exemption to the general mandatory flood insurance purchase requirement for any structure that is part of a residential property but is detached from the primary residential structure of such property and does not serve as a residence. The final rule also clarifies what is considered "a structure that is part of a residential property," "detached," and "serves as a residence."
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#2091895 - 08/05/16 04:30 PM Re: Detached Structures Noleman
David Dickinson Offline
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David Dickinson
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Central City, NE
NSF and TMatt are correct. The exemption was created for residential property. If the building (prior house) is no longer a dwelling, the exemption cannot be granted.
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#2095054 - 08/24/16 07:03 PM Re: Detached Structures Noleman
fretzer Offline
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Joined: Dec 2008
Posts: 76
Pennsylvania
What if you have two structures sharing the same roofline? Would they both require individual policies? I'm thinking yes, but would appreciate confirmation.

Thank you!

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#2095155 - 08/25/16 12:22 PM Re: Detached Structures Noleman
rlcarey Offline
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rlcarey
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Galveston, TX
Single Building. A building that is separated from other buildings by intervening clear space or solid, vertical, load-bearing division walls.
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#2099230 - 09/19/16 08:06 PM Re: Detached Structures rlcarey
Compliance1 Offline
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Posts: 651
We had a customer get a LOMA from FEMA which identified his residence as being out of a flood zone but left his detached garage in the flood zone. I'm trying to convince the lender that flood insurance isn't needed on the garage since it falls into the detached structure definition but he is still thinking that the 10% rule would need to be considered. Can someone confirm that the garage is not needing insurance due to the detached structure definition?

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#2099234 - 09/19/16 08:21 PM Re: Detached Structures Noleman
rlcarey Offline
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rlcarey
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Galveston, TX
If I had a flood zone line that ran between the garage and house, from a safety and soundness perspective I would probably want them both insured. But, you are correct. The detached garage does not trigger the flood requirements. It probably won't be covered under the policy for the house however.
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#2100082 - 09/23/16 01:40 PM Re: Detached Structures rlcarey
Compliance1 Offline
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We are unsure why the surveyor didn't incorporate the detached garage when doing the LOMA, but can you confirm for me that the 10% detached structure rule is no longer an option since the other detached structure rule is in place?

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#2100210 - 09/23/16 08:18 PM Re: Detached Structures Noleman
rlcarey Offline
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rlcarey
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Galveston, TX
You don't need to cover a detached structure from a regulatory standpoint. If you decide you want insurance on the garage, then you might have to call the NFIP to see how this works.
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