The FEMA 50% Rule applies to all buildings in special flood hazard areas (SFHAs), including zones A, AE, AH, V1-30, V, and VE. The 50% Rule prohibits improvements to a structure that exceeds 50% of its market value unless the entire structure is brought into compliance with flood regulations. FEMA conducts routine audits of building permits in affected areas to enforce compliance.

FEMA does not define market value, though three methods are acceptable.

1. The building permit office will reference the structure value on the county Property Appraiser’s property record. This is usually well below the other methods outlined below:

2. An appraiser can be retained to calculate the “Cash Value” which is based on current replacement cost less depreciation. (prior to storm damage)

3. An appraiser can apply the traditional market value analysis of the whole property (prior to storm damage) and subtract land value and site improvements.

Cooksey & Associates have considerable experience in this matter. Please contact us if we can be of service. jim@cookseyassociates.com