Condo Media - January 2014 - 14

by Jack Carr, P.E., RS, LEED-AP

C A I

R e g i o n a l

N e w s

MAINE

A Surge in Flood Insurance Rates
FEMA Releases Long-Awaited Maps

A

storm is brewing. The red
gale warning ﬂags are ﬂying. Time to hunker down
and survey your
survival equipment. No,
I am not just speaking
of the pending hurricane season but also the
impact on coastal (and
even inland) condo living
with the recent release of
the long-awaited Federal
Emergency Management
Administration (FEMA)
ﬂood maps.
These maps have been
created with high accuracy
from aerial photography
and other means, giving
some assurance of reliability, but things are not
that simple in this world.
What these maps do not
do is confirm your particular building's relationship
to future high water from
rising ocean surges or the
swelling of inland rivers
and streams. This can have
serious effects on future
sales or financing condominium units.
As an example, let's say
you have had a mortgage for the last
seven years at 5.5 percent and you
have the possibility of refinancing with
your current mortgage holder at a
reduced rate of 4.3 percent with no
closing costs. Sounds like a no-brainer,
so you start the refinance paperwork
process. Then, the nightmare begins.
Ever since the condo was built seven
year ago, its property lot has always
been in Zone C not requiring any ﬂood

14

insurance (as it was not in a special
ﬂood hazard area), but you maintained
a $250,000 ﬂood coverage for $500

It gets worse. Because of the rezoning, your condominium unit is now
in violation of the first mortgage's
covenants, and if you do
not obtain the proper ﬂood
insurance, you will be in
default subject to foreclosure.
Meanwhile, your mortgage company notifies your
insurance company of the
improper insurance level, and
the insurance company sends
a demand letter requiring
an immediate payment of
$5,000 to cover the new special hazard ﬂood insurance.

Letter of Map
Adjustment

per year, just in case. Your mortgage
holder sends you a letter notifying you
their due diligence processing of the
new mortgage revealed the new FEMA
ﬂood maps show the road leading into
the condominium's lot could reach a
base ﬂood elevation (BFE) of 1 foot
from a nearby stream during a hundredyear storm. This driveway and hence, by
association, the entire lot is now classified into a new "AO" zone.

What really irritates is you
know your unit's foundation is at least 7 feet higher
than the driveway's estimated BFE and water will never
rise high enough to damage
the building. It does not
matter. You still have to
send the requested $5,000
insurance premium anyway and even more money
every year for the life of the
mortgage. So what are you
to do? The only avenue for
relief at this point is to file a LOMA
request with FEMA.
LOMA stands for letter of map
adjustment. If you believe your condo
unit's building has not been properly
classified in the correct ﬂood zone,
you need to prove it by hiring a
licensed land surveyor or professional
engineer to make a topographical
survey of the condo's property and
determine the elevation of the corners

Condo Media * January 2014

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12/3/13 11:47 AM
Condo Media - January 2014

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