Posted by: Patricia Salkin | March 13, 2011

NY Appellate Court Finds Improvements to Property Following Flood Were Substantial, Triggering Compliance with Local Flood Plain Law

Following a flood in 2006, defendant’s property was damaged. The Town claimed that the structure, which was located in a flood plain, was now required to comply with certain permit and building requirements pursuant to a 2003 local law.  The local law, enacted in accordance with FEMA’s National Flood Insurance Program to take advantage of incentives for adopting flood plain management measures, requires property owners to obtain a flood plain development permit prior to making any “substantial improvement” to a structure in the designated area and further requires that owners receive a certificate of compliance before the structure is reoccupied.  The defendants proceeded to made improvements to the property without obtaining the necessary permits, approvals and compliance certificate, and they claim that they did not have to obtain these because the work they did was not a “substantial improvement” that would trigger the application of the local law. 

In reviewing the National Flood Insurance Program regulations which define “substantial improvement,” the Court noted that it is considered substantial if the repairs would equal or exceed 50% of the pre-flood market value of the home. To determine whether the defendants made a substantial improvement, the Town used the current tax assessment to calculate the market value of the structure. The defendants argued that the Town had to use an independent professional appraisal, but the court said this was not true as the regulation was silent as to how value was to be determined. The Court noted that FEMA’s written guidelines allow for both approaches, but that the defendants did not submit any alternate property appraisal to the Town or to the Court for consideration.  The Town’s assessment, which took into consideration the equalization rate, was $5,102.  The defendants spend a total of $5,313.24 on the improvements but argued that only $2,000 (less than 50%) was spent remedying the damage caused by the flooding. The Court said that under the federal regulations, all improvements to the structure were to be counted and therefore the cost of improvements exceeded the market value and were substantial, requiring compliance with the local law.  The court upheld summary judgment for the Town. 

Town of Kirkwood v Ritter, 80 A.D. 3d 944, 915 N.Y.S. 2d 683 (3 Dept. 1/13/2011).     

The opinion can be accessed at:

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