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Floods, Remodeling and FEMA's 50% Rule: An Interview with Doug King of King Contracting

By Doug King

Please tell us a little bit about your company and the services you offer.

King Contracting is a full-service design-build firm specializing in first, second and third floor room addition, kitchen and bath remodeling. Our client base is mostly waterfront homes and condos in upper scale neighborhoods. We also have a kitchen and bath retail showroom to aid our clients with cabinetry selections, design renderings, countertop and flooring selections.

What are some of the most common remodeling needs for houses in Florida after a flood?

The base boards and drywall are the most common outside of the flooring. Obviously wood floors, carpet and certain types of tile need replacing. Depending on the water height, most old plaster walls can be dried with dehumidifiers and fans, leaving the walls intact. Cabinetry in kitchens and baths can be affected as well. I would venture to say that 50% of remodeling jobs are due to a leak or flood of some nature.

Can you briefly describe what FEMA's 50% Rule is?

If a home is located in a flood zone labeled by FEMA as A, AE, V, VE or HVZ the owner can only spend up to 50% of the structure's value for improvement cost in any 12-month period if their lowest living level is at or below the base flood elevation (BFE) for that zone. The BFE is set by FEMA. The lowest living level elevation is determined by a licensed land surveying company that completes a form known as a Flood Elevation Certificate which can be part of a site survey (if requested). The problem many times is that the land value far exceeds the structure value, making serious improvements to the structure prohibitive. Usually this scenario results in the structure being torn down and rebuilt to FEMA Regulations meaning that the lowest level of livable space is above the BFE for that particular zone. This is achieved either by building the house on columns/piers OR bringing in soil to raise the finished grade above the BFE. Once the lowest living area is above BFE, the owner may spend as much as they desire. There is also insurance issues to be considered, but that is for another discussion.

Are there any misconceptions about the 50% Rule (Substantial Damage Rule) that you've run into?

Yes, one I hear often is that if one wall of the original structure is left or if the foundation is left that the 50% Rule doesn't apply. Other comments I hear are that if the portion of the work being done doesn't require permitting or an inspection, then it doesn't count towards the 50% Rule. Both of these are absolutely false. The rule is very straightforward with no room for interpretation: "one cannot exceed 50% of the structure value for improvements of any kind including most repairs."

In general, how does FEMA's Substantial Damage Rule affect houses in a flood zone?

It only affects a house if the owner is planning to do renovations that exceed 50% of the structure's value. There are several ways to design a project to meet FEMA's guidelines, depending on the scope of the project. The knowledge of the architect and contractor as related to the property and the intended scope of work is vital.

Do you have any advice for homeowners in a designated special flood hazard area who are considering a remodeling, renovation or home improvement project?

The first thing a homeowner should do is get a Flood Elevation Certificate. Not only does this let the architect and contractor know where the starting point is, homeowners may find that their actual lowest living level elevation is higher than the BFE so then the 50% Rule doesn't apply and they will get a huge break on their flood insurance, if they are required to carry it. Make sure all who are designing/quoting your project are aware if you are in a flood zone so that proper design initiatives are taken. Check to make sure that your architect and/or contractor have experience with working in FEMA flood zones.

What's the best way for people to contact your company?

Our main number is 727-914-6949. Email: doug@dougkingcontracting.com

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