Understanding the 50% rule in the aftermath of a hurricane

Hurricane season is upon us, are you aware of the FEMA 50% rule? 

Many of our clients at O’Neil Industries have asked us about the FEMA 50% rule, and we believe it’s important to fully understand it as a Lee County property owner. Since we are in the midst of storm season in Southwest Florida, we think it’s appropriate to explain the FEMA 50% rule to keep ALL property owners informed and aware. 

The Federal Emergency Management Agency [FEMA] has established specific damage assessment guidelines to all structures located in Special Flood Hazard Areas. All States and local governments are responsible for regulating all development in mapped flood hazard areas, issuing permits, and enforcing requirements for improvements and the repairs of buildings when disaster strikes. 

The 50% rule is a federally mandated regulation that local municipalities must adhere to when repairing or rebuilding structures that are located in designated floodplains. This rule was established to reduce future flood damage and to ensure property owners have the right flood insurance programs in place.

If a building is “substantially damaged” or “substantially improved” it must be brought into compliance with your local flood damage prevention regulations (always check your county regulations)

Substantial improvement versus substantial damage

SUBSTANTIAL DAMAGE – means damage of any origin sustained by a structure whereby the cost of restoring the structure to its before damage condition would equal or exceed 50% of the market value. (Note: The cost of the repairs must include all costs necessary to fully repair the structure to its “before damage” condition.)

SUBSTANTIAL IMPROVEMENT – means any reconstruction, rehabilitation, addition, or other improvement of a structure, the cost of which equals or exceeds 50% of the market value of the structure before the “start of construction” of the improvement.


FAQ’s regarding substantial improvement and substantial damage 

  1. Substantial improvement or substantial damage? To determine if your structure falls under substantial improvement of substantial damage, Lee County will use the assessed value of your structure (excluding the land) recorded by the Lee County Property Appraiser’s Office.
  2. What paperwork must property owners submit? Lee County requires a detailed and complete cost estimate for the addition, remodeling, reconstruction or for repair of all damages sustained by your home, prepared and signed by a licensed general contractor. 
  3. What paperwork must contractors submit? The licensed general contractor must sign an affidavit indicating that the cost estimate submitted includes all damages or all improvements to your home, not just structural. 
  4. What if the owner decides to do the repair/remodel work? If you decide to do the work yourself, you must submit the cost estimate, provide proper documentation, including sub-contractor bids, to document the cost estimate. 
  5. How do you determine if the cost estimate is fair/reasonable? Lee County will evaluate the cost of improvements or repairs and determine if they are fair and reasonable. Typically, for damage repairs, pre-storm prices and rates will be utilized. Keep in mind the cost of improvements or repairs does not include items not considered a permanent part of the structure. 
  6. What is NOT considered a permanent part of a structure? Plans, surveys, permits, sidewalks, pools, screens, sheds, gazebos, fences, etc. 
  7. What happens if my home is determined to have “substantial damage” or is proposed to be “substantially improved”? Lee County requires property owners to submit an elevation certificate to determine the lowest floor elevation. Keep in mind garages and carports are not considered to be the “lowest floor”. 

Important points regarding substantial improvement and substantial damage 

  • If the lowest floor is below the 100-year flood elevation, the building must be elevated to, or above, that level. The only thing allowed below the flood level is parking, building access, and limited, incidental storage. 
  • If the lowest floor of the structure is already above the 100-year flood elevation, the building can be repaired and reconstructed without having to comply with the 50% percent rule. 
  • All building plans submitted MUST be prepared to show how the building/structure is to be elevated. If the structure is located in a V-zone or if the structure is to be flood proofed, these plans must be prepared and certified by a registered professional engineer or architect. You can find these certificates from the Building and Zoning Department. 

Finding a Licensed Contractor in the aftermath of a hurricane

Understanding the FEMA 50% Rule as interpreted by the jurisdiction where you own property is critical to undertaking renovations and/or post-storm repairs of your property. Being informed and aware of all national and local regulations is the best way to protect your property and to fall into compliance.

For more information about the FEMA 50% Rule in the aftermath of a disaster, please contact Rob O’Neil with O’Neil Industries in Cape Coral, Florida.

Resources and references used for this articles: