• Mon. Nov 28th, 2022

Half empty? Florida homeowners face harsh realities of FEMA’s 50% rule – InsuranceNewsNet

ByWillie M. Evans

Oct 19, 2022

Dozens of Floridians are taking a crash course in the Federal Emergency Management Agency 50% rule governing home reconstruction after Hurricane Ian.

And for many, the FEMA The ruler is an unpleasant and problematic surprise after all of Ian’s damage and trauma.

The 50% rule dictates the future of hurricane-damaged homes in designated flood zones.

The federal rule prohibits repairs and improvements on damaged homes exceeding 50% of their market value unless the entire residential structure is brought up to the latest building codes and flood regulations.

Basically, if a home damaged by Ian’s repairs exceed 50% of its value, homeowners are obligated to rebuild to current codes and elevation requirements in coastal and other flood prone areas.

The goal is to mitigate damages and insurance costs from future storms. But the reality for landlords can be very difficult and very expensive medicine and could exclude long-time landlords and others from coastal property markets, leaving more of the region’s beachfronts to the wealthy.

“The FEMA rule is going to impact a lot of people,” said Charles Whittona real estate lawyer with the Grant Fridkin Pearson PA. law firm at Naples. “The rule is going to significantly affect people’s ability to rebuild.”

The 50% rule is part of the FEMA-managed the National Flood Insurance Program which aims to control development on designated flood plains. The idea is to bring properties up to current codes after flooding and wind damage so that residences are more resilient to future storms, thereby reducing insurance and damage costs.

Lawyers, appraisers, realtors and insurance agents across the region are fielding calls from homeowners affected by Ian about their options for repair and rebuilding after the storm.

Some local owners have little or no knowledge of the FEMA rule and potential restrictions on their post-hurricane path.

“A lot of people are calling because they’ve had a flood and they don’t know what to do,” said Cameron Woodwarda real estate and land use attorney with the law firm of Woodward, Pires & Lombardo PA on Marco Island.

Woodward emphasizes Lee County data showing that over 48,500 residential properties were damaged by the Category 4 hurricane with over 5,000 destroyed and another 13,100 with major damage.

Woodward said that FEMA This rule could make renovations and reconstruction difficult for owners who do not have sufficient financial cushions, such as retirees on fixed incomes, as well as those who own older properties.

“They are going to have problems,” the lawyer said. “There’s no nice way to put it. They’re going to be in trouble. You’re going to have a lot of rebuilding going on.”

This rebuilding could result in more extensive teardowns and new construction of elevated, more expensive homes built to current codes and flood rules rather than repairs to existing older homes.

“You’re going to see the nature of the community change structure by structure,” Woodward said. “You are going to go to Fort Myers Beach In 10 years it won’t look like it does now.”

“The Super Rich”

Patricia Staeblermain with Bradenton-based at Staebler Appraisal and Consulting, sees the 50% rule after Ian drive the rebuilding of coastal areas mostly by wealthy buyers and investors.

“The super rich,” Staebler said of who can afford to rebuild and live in hard-hit coastal areas and barrier islands that have suffered the brunt of the hurricane but offer expensive and attractive waterfront properties. “We normal people will all be shut out of the market.”

Staebler said many transplant recipients and out-of-state homebuyers have limited knowledge of the 50% rule at best.

“There is a lack of information and a lack of knowledge,” Staebler said. “Too many people are buying homes without knowing what they’re buying into,” she said.

Staebler wants more detailed information on floodplains and FEMA rules to potential property buyers as well as rethinking developments on barrier islands after Ian clubbed Sanibel and the Pine Islands as well as coastal areas.

“There is no disclosure, no information,” she said. “They’d rather stay ignorant and not disclose just to make a sale. It comes down to the five-letter word – greed. Greed in every aspect,” Staebler said.

Florida the laws do not require specific disclosures from sellers about their properties, but they must disclose material impacts on property values ​​via a 1985 Florida Supreme Court decision in Johnson v. Davis, according to Mary Martinmedia and communication manager of the Florida Realtors group.

She said these disclosures can be made verbally or in writing.

“Florida Realtors provides its members with a Real Estate Condition Disclosure Form that is used in many transactions involving a real estate agent. This form provides potential buyers with a wide variety of information regarding the property they are considering buying. purchase, including water intrusion, drainage and flooding,” she said.

FEMA and local jurisdictions also have flood maps and other property information available, including 50% rules and other major damage provisions.

No easy solutions

Whittington said the determination of real estate values ​​under the 50% rule applies to homes and residential structures, not the value of land. But it’s difficult to stay below the threshold with extensive roof and water damage from the storm, he said.

“There’s no easy solution. A neighbor’s situation will be different than the person immediately next door,” Whittington said.

Woodward said owners have some ability to appeal damage estimates in the FEMA rule process. “You can appeal certain aspects,” he said. “If you’re 50 or 51 percent right, there’s something that can be done.”

Hurricane Ian caused up to $70 billion in damages, according to real estate research firm CoreLogic.

Staebler is concerned about Ian’s already stressed property insurance situation worsening (including via lawsuits) and said the rebuilding process will take several years.

“It will take more than a year,” she said of all the expected new elevated buildings and more expensive new structures. “It will take five, six, seven years to rebuild.”