So you want to renovate a house? Great! But there’s are two important questions you should ask yourself before committing to the process in Monroe County, FL.
- Is your home below the base floodline elevation (BFE)?
- Will the renovation costs exceed 50% of the improvements assessed value?
If the answer to question #1 is NO then proceed to renovation. If the answer to question #1 is Yes, then proceed to question #2. If this question is Yes then you should pause (and maybe stop) Do not pass go, do not collect $200.
Monroe County Florida has a Substantial Improvement / Substantial Damage rule, more commonly known as the 50% rule. This means that if the costs of the improvements/ repairs to your property exceed 50% of the improvements assessed value you must bring the property above the BFE. In some cases this is not a big deal, in others, such as in a concrete slab house, this can be a huge and costly undertaking.
According to the county website The National Flood Insurance Program and Monroe County regulations require improvements to structures within a Special Flood Hazard Area must meet current construction standards including elevating the building to or above the 100-year flood elevation if the improvement is 50% or more of the market value of the property.
Substantial Damage – occurs when the cost of restoring the structure to the condition before the damage would equal or exceed 50 percent of the market value of the structure before the damage occurred. (Note: The cost of the repairs must include all costs necessary to fully repair the structure to its “before damage” condition, including labor.)
Substantial Improvement – any reconstruction, rehabilitation, addition, or other improvement of a structure, for which the cost of equals or exceeds 50 percent of the market value of the structure before the “start of construction” of the improvement.
This term includes structures which have incurred “substantial damage,” regardless of the actual repair work performed. The term does not, however, include either:
- Any project for improvement of a structure to correct existing violations of state or local health, sanitary, or safety code specifications which have been identified by the local code enforcement official and which are the minimum necessary to assure safe living conditions; or
- Any alterations of a “historic structure,” provided that the alteration will not preclude the structure’s continued designation as a “historic structure.
In summary, if you are considering a renovation project in Key West or Monroe County be sure that you consult your real estate agent and discuss the possible ramifications of the 50% rule.