Q: EXEMPTIONS 5. In the event that a triggering event has occurred, is the lender required to review the intended use of each detached structure?
A: Yes, a lender must examine the status of a detached structure upon a qualifying triggering event to determine whether the detached structure exemption still applies. See Applicability 13. There is no duty to monitor the status of a detached structure following the lender’s initial determination unless a triggering event occurs. However, regardless of the absence of a duty to monitor the status of a detached structure in the Regulation, sound risk management practices may lead a lender to conduct scheduled periodic reviews that track the need for flood insurance on a loan portfolio.