Information and Advice About Buying
Southwest Florida Real Estate

Since 1996, real estate attorney Raymond J. Bowie has published a regular real estate column in the Naples Daily News giving readers information and advice. A selection of Mr. Bowie’s columns is provided as a public service by the links below.

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  • Flood Insurance & Building Restrictions

Flood Insurance and Coastal Building Restrictions
Different Deeds and Different Titles
By: Raymond J. Bowie, Esq.

The Associated Press report carried recently in the Naples Daily News read ominously: “Erosion threatens one-fourth of the homes and buildings along America’s coastline in the coming decades, as many as 67,000 risking damage or destruction, a government disaster agency warns.”

The government agency issuing the warning is one many Floridians have learned to heed: the Federal Emergency Management Agency – FEMA, for short. The AP news story related how Congress required FEMA in 1994 to study the economic impact of erosion on coastal communities, out of concern that flood insurance rates did not accurately reflect property damage caused by erosion. Six years later, which is about average for the time it takes for a government agency to complete a study, or for the IRS to return a phone call, FEMA has now released the results – and for areas like Naples, they are frightening.

Let FEMA speak for itself. “The results are, in many ways, far more alarming than we thought,” said James Lee Witt, director of FEMA. “If current trends hold, more than 1,500 homes a year will be lost to coastal erosion. The costs of these homes, the land on which they sit, will be more than $500 million per year. If coastal development continues unabated and if sea levels rise as some scientists are predicting, the impact will be even worse.”

Reading the report itself, prepared by the H. John Heinz Center for Science, Economics and the Environment, indicates that FEMA, for once, may not be exaggerating the threat.

• A major storm can erode the coastline 100 feet or more in a day. And nationwide, there are over 338,000 structures located with 500 feet of the shoreline.

• The Atlantic and Gulf coasts account for 63% of those shoreline structures. And the nation’s highest erosion rates – 6 feet or more per year – are occurring along the Gulf of Mexico.

• Only half of the homeowners in these high-risk Atlantic and Gulf coastal areas carry flood insurance. And this flood insurance only covers about $80 million of the $940 million at risk in property values.

• Notwithstanding that, development in a number of these high-risk coastal areas has increased 60 percent over the last 20 years.

• The study proposes the following among FEMA’s options: Doubling flood insurance rates along high-risk coastal areas; Creating “Coastal High Hazard Zones”; Increasing building setbacks to reduce damages; Requiring communities to adopt tougher, erosion-resistant building standards.

All of the foregoing findings apply to Naples and most of Collier and Lee counties as well.

Motivating FEMA’s concerns is the fact that the federal flood insurance program currently covers only erosion damage caused by flooding, not by the process of gradual erosion. And erosion damage has never been specifically factored into setting flood insurance rates.

To understand the consequences of this requires us to understand what FEMA does and how it impacts us locally.

Most homeowners and commercial property owners in Naples have at least a fleeting acquaintance with FEMA and its flood insurability requirements. If you own property in certain areas and you have a mortgage, the lender will likely require you to carry flood insurance on the property. And even if you are not required to carry flood insurance, if you build or even substantially remodel an existing property, you will be required to meet newer and higher flood elevation standards imposed by FEMA.

All this is the result of the National Flood Insurance Program (NFIP) established by Congress in 1968 to try to control the federal share of costs coping with flood disasters, which Congress had previously handled through separate disaster relief bills. NFIP set up a national program of federally-backed flood insurance made available to communities in flood-prone areas that meet certain federal standards for participation, chiefly relating to flood prevention and preparation measures.

Key to this federal flood program is the concept of Flood Insurance Rate Maps, or FIRM.

FEMA continuously studies areas of the country believed prone to flooding and seeks to map in detail what lands are subject to “100-year floods.” Contrary to assumptions, this does not mean that a flood is predicted to occur in such an area every 100 years. It is actually a technical statistical term meaning that a flood of a certain severity has a 1% chance of happening in any given year in that area. These lands are called Special Flood Hazard Areas.

Each Special Flood Hazard Area is further divided by FEMA into insurance risk zones, also called flood zones, based upon their susceptibility to “100-year” flooding, either because of its low elevation, proximity to bodies of water, or combination of both. These flood zones bear the designations A, V, X or D. A-zones are prone to flooding in various circumstances. V-zones are coastal areas subject not only to flooding but also to water velocity (wave) hazard. X-zones are higher or inland areas not generally prone to 100-year flooding. And D-zones are less populated areas where flood hazards have not yet been determined. All of these flood zones exist within Collier County, with areas closer to the coast along with the cities of Naples and Marco Island largely being designated A and V zones.

In zones A and V, minimum base flood elevations have been determined, ranging anywhere from 7 feet on up to 17 feet representing depths of potential flooding. Anytime new construction is commenced in these flood zones, the lowest finished habitable area of the construction must be sufficiently elevated to exceed the minimum base flood elevation designated for that area. In theory, this is to reduce property damage from projected flood levels.

Property owners who seek to substantially improve or remodel existing homes or commercial buildings will also encounter restrictions if located in A or V zones. Under rules set by FEMA, but administered by local county or city building departments, if the lowest level of an existing property lies below the zone’s base flood elevation, costs expended for repairs, additions or improvements cannot exceed 49.9% of the market value of the existing structure (excluding the land value) over any twelve month period – and in the case of properties located within 1500 feet of the Gulf, over any five year period. Commercial property owners may, however, renovate beyond 50% of the structure’s existing value if they install flood-proof panels for ground level doors or other apertures. FEMA’s intent with these restrictions is clearly to discourage renovations of lower-lying properties in favor of tearing them down and rebuilding to current flood elevations.

Accepting these kinds of restrictions is the price coastal communities like Naples and Collier County pay to FEMA in order to qualify for subsidized flood insurance rates for property owners. Flood insurance is critical in flood-prone areas because losses due to flooding are not covered under most homeowner or commercial property insurance policies. Flood insurance covers damage to insured structures and contents in an insured building arising from surface flooding, defined as rising water levels. Flood insurance is required by most institutional mortgage lenders on properties they finance, but is optional for other property owners. Mobile homes qualify. And tenants can also get flood coverage for their personal property contents. Flood insurance coverage is limited to $250,000 for residential properties and $100,000 on the contents, and $500,000 for commercial properties and an equal amount for contents.

One of the biggest controversies as to flood insurance, however, has always been over the issue of erosion. Ever since the establishment of the National Flood Insurance Program in 1968, there has been debate whether property damage caused by erosion should be covered and to what extent. The current rule, something of a compromise, is that flood insurance may cover erosion damage if it can be shown to have been caused specifically as the result of a flood., i.e. rising water levels, but not otherwise. Damage due to gradual erosion has always be excluded.

Of larger consequence is the concern now being addressed in FEMA’s recent study: Current flood mitigation programs and flood insurance rates do not take into account erosion damages. If erosion damages resulting from covered flooding are likely to increase as the study predicts, the federal flood insurance program as funded by current premium levels may be actuarially unsound.

Higher premiums? Tougher building restrictions? Less waterfront development? FEMA says it is considering all the above. Unlike many other states with extensive coastline, Florida may actually be ahead of FEMA this time. Over the past 30 years, coastal construction in Florida has been increasingly restricted, to the point where the state may now already be in compliance with the measures proposed in FEMA’s erosion study.

In 1980, Florida enacted a comprehensive regulatory program – under the “Beach and Shore Protection Act” – to protect the state’s sandy beaches against erosion by restricting coastal construction. In addition, the state requires local governments abutting the Gulf of Mexico or Atlantic Ocean to include coastal management provisions in their own comprehensive plans.

Generally, all lands seaward of the mean high-water line along the Gulf or Ocean coastlines belong to the state of Florida and are called “sovereignty submerged lands.” No private party or government can construct docks, seawalls, jetties or groins on these lands, or undertake to move beach material or commence beach renourishment without a coastal construction permit from the Florida Department of Natural Resources. Coastal armoring, as things such as seawalls are called, is permitted only to protect public facilities or roads and certain habitable private structures which were built prior to the current restrictions and which are extremely vulnerable to erosion at least once every five years.

Most coastal private property owners are more impacted, however, by the coastal construction control lines (CCCL lines) established all along Florida beaches under the Beach and Shore Protection Act.

Under this statute, in order to protect the state’s beach dunes, the legislature directed the Florida Department of Environmental Protection to draw a line around Florida’s coasts marking areas of beaches subject to “severe fluctuations based on a 100-year storm surge, storm waves or other predictable weather conditions.” Since the law’s enactment, the state has widened these CCCL lines a number of times in various different areas.

CCCL lines exist on all of Florida’s sandy beaches and on coastal barrier islands that ate contiguous to sandy beaches. Shorelines dominated by vegetation such as mangroves have not had CCCL lines established. The exact width and placement of CCCL lines varies from county to county. They are precisely defined by metes-and-bounds legal descriptions recorded in the public records of each affected county and there made available to the public.

Seaward of the established CCCL line, no private party or government agency can alter, damage, excavate, relocate sand or beach materials, remove vegetation, construct anything, or for that matter drive any vehicle, without a permit issued by the Florida Department of Environmental Protection. And generally forget about building a new residence on that nice vacant beachfront property if it’s within the CCCL line.

Building within or otherwise violating the CCCL restrictions carries serious penalties:

the violator may be charged with a criminal misdemeanor, loss whatever building permit he had, and face fines of up to $10,000 per day per offense.

The state does allow some flexibility so far as building seaward of the CCCL line. A permit will usually be given to repair, remodel or in the event of destruction to rebuild a structure that was legally permitted at the time it was built, provided the construction is kept within the original foundation or “footprint” of the building. Hence, expansion or enlargement of an existing use will not generally be allowed.

If the owner of coastal property subject to the CCCL applies to build new construction, the state will require him to build as far landward on his lot as possible. Sometimes, however, where the area is already built up and other neighboring structures already exist seaward of the CCCL line, and there is no evidence of an erosion threat, the owner can get a permit for new construction to locate along the existing line of construction. Any construction permitted within the CCCL line must, however, meet extensive engineering requirements for building elevation, wind resistance, reduced paved surfaces and erosion prevention.

Seaward of the CCCL line, any permitting is almost entirely at the discretion of the state Department of Environmental Protection. The state is not bound by local ordinances, building codes, permits, private covenants or contracts. Many court challenges have been brought seeking to force the state to issue a coastal construction permit, but hardly any have succeeded.

Issuance of any permit is particularly unlikely when the property is determined by the state to fall within the “thirty-year erosion zone”, which is any coastal area where most all construction is prohibited because the land will be under water due to erosion within 30 years of the date a permit is sought. In some cases, the state’s refusal to grant any permits to property owners within this erosion zone has been deemed to be a “regulatory taking” of their property entitling the owner to compensation from the state.

In 1985, state regulation of coastal property was further expanded under the Coastal Zone Protection Act. This law creates a further “coastal building zone” extending 1,500 feet landward of the CCCL line wherever one has been established – and where there is no CCCL line set, also extends to all V-rated flood zones and barrier islands. As to all this additional area, this law extends the same stringent construction requirements as exist for buildings within the CCCL line.

It seems obvious from this trend in legislation that over the past 20 years, Florida has already addressed the concerns only recently voiced by FEMA from the results of its erosion study. What should also be obvious, however, is the trend toward expanding the various construction restrictions, even prohibitions, to property that is further and further inland from shoreline areas.

Because of this, the Coastal Zone Construction Act also provides that prospective purchasers of property affected by coastal restrictions be warned of the restrictions. By law, the seller of any property partially or totally seaward of the coastal construction control line must provide the buyer with a property survey depicting the line on the property or an affidavit furnishing the line’s location by legal description. The buyer is, however, allowed to waive his right to receive this survey or affidavit.

While it is clearly the legislature’s intent that sellers of coastal property disclose to buyers the location of the CCCL line upon the property, the statute does not require any disclosure to the buyer of what the line means in terms of the restricted usefulness of the property, nor is there any statutory penalty imposed upon the seller for failure to comply. Moreover, the standard form real property sales contracts used in our area either make no mention of the CCCL disclosure (the FAR/BAR contract) or contain a standard clause stating the buyer waives the disclosure (the local Naples area contract.)

A buyer considering the purchase of beachfront property clearly faces a “caveat emptor” – buyer beware – situation if he is envisioning construction. Prior to writing a contract, such a buyer should enlist the services of a broker experienced in coastal properties, a real estate attorney, a surveyor and a building engineer or contractor familiar with coastal construction. The buyer’s sales contract should contain a clause making the purchase contingent upon the buyer’s survey of the property with the CCCL line being acceptable to the buyer’s attorney and building contractor.

Florida’s existing measures addressing coastal erosion may indeed lessen the impact of any further measures sought by FEMA on a nationwide basis following its recent erosion study. However, Florida’s coastal regulatory program already has tremendous impact upon coastal property owners, with or without further input from FEMA. And if you’re buying beachfront property, better be careful where you lay that beach blanket.

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