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FEMA 50% Rule Substantial Improvement/Damage

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“Sarasota in the 1950s was one of the most important places in the world for architectural creativity, where the greatest design movements of the day came together.”- Carl Abbott FAIA, original member of the Sarasota School of Architecture

Fortunately for us, there has been a welcome surge in the restoration and renovation of many of our area’s significant historic properties.  So much so that I routinely am asked questions about the “50/50 rule or that FEMA thing”.  In fact, I received a text message this morning from a great realtor friend of mine inquiring into the “FEMA 50/50 rule for adding an addition.”  When thinking about how to respond, I immediately thought that this would be a great blog topic…two birds – one stone!

The following are examples of commonly asked questions and the corresponding short answers with respect to the FEMA 50% Rule:

What is the FEMA 50% Rule?  To put it simply, it limits the cost of improvements (additions, alterations, and/or repairs) to non-conforming structures (structures that are below the base flood elevation) to less than 50% of the “market value” of the structure prior to the start of work.

What is a “non-conforming structure”? FEMA identified areas that are at higher risk for periodic flooding and determined the minimum lowest floor elevation for structures in these areas.  Even though there are exceptions, most structures that were built before 1975 are non-conforming.

How is “Market Value” determined?  Market Value is based on the value of the primary structure before the start of the improvement or before the damage occurs. The value of site improvements such as pools, accessory structures, and landscaping are not included in determining the Market Value. The Market Value can be either determined by the adjusted Property Appraiser’s assessed improvement value or through an appraisal prepared by a qualified professional appraiser. The appraised value of the structure less the value of all forms of depreciation is the Market Value.

What if the cost of improvement or repair exceeds 50% of market value?  Improvements or repairs the cost of which exceed 50% of the Market Value are classified as a substantial improvement. A nonconforming structure that is substantially improved is required to conform with the requirements for new construction including elevating to the required minimum elevation.  As you can imagine, this process can be extremely expensive and could result in having to demolish the existing structure.

Can a single improvement be divided into multiple permits?  Utilizing multiple permits to complete a single improvement is referred to as “phasing”.  If the sum of the permits exceeds 50% of the market value of the structure prior to the initial start of work the structure is considered substantially improved and it would have to made compliant with current elevation requirements.

While the surge in the restoration and renovation of non-conforming properties is certainly an important aspect in preserving Sarasota’s amazing architectural history, it is imperative that homeowners and/or homebuyers understand the requirements for improving their existing home or a newly acquired home prior to commencement of any construction!   Homebuyers and their agents should be extremely diligent when buying and/or selling property that is deemed to be below the base flood elevation. If the home is below the base flood elevation, the parties should be requesting an assessed marked value of the improvement and they should factor the potential cost or limitations of any new renovation prior to the end of their due diligence period.

Should you have any questions regarding the foregoing, we urge you to consult with your real estate attorney.


Berlin Patten Ebling, PLLC

Article Authored by William C. McComb, Esq.

This communication is not intended to establish an attorney client relationship, and to the extent anything contained herein could be construed as legal advice or guidance, you are strongly encouraged to consult with your own attorney before relying upon any information contained herein.

All rights reserved. This copyrighted material may not be re-published without permission. Links are encouraged. 


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