Understanding the FEMA 50% Rule – Bradley

The law firm of Bradley Arant Boult Cummings LLP has just published an article explaining the FEMA 50% rule, read here to find out more about the details.

 

An excerpt from the article states: 

“When structures located in a Special Flood Hazard Area (SFHA) are damaged, local communities that participate in the National Flood Insurance Program (NFIP) are responsible for assessing impacts before repairs can be made. NFIP flood insurance and certain types of federal financial assistance are available only in communities that enter into agreements with FEMA to regulate flood hazard areas. More than 22,000 communities participate in the NFIP. These participating communities must adopt and enforce regulations and codes that apply to development in SFHAs.

A structure is considered Substantially Damaged (and thus requires Substantial Improvement) if the cost to repair is 50% or more of the market value of the structure. The 50% standard is the NFIP minimum, and a state or community floodplain management regulations or building code could adopt a more restrictive threshold (such as 30% or 40%). Once a structure is determined to be Substantially Damaged, the structure must be brought into compliance with current local floodplain management standards, which may include, among other things, elevating the structure, using flood-resistant materials, proper flood venting, or demolition and reconstruction.”