Will FEMA help rebuild Florida’s waterfront condos?

Hurricane Irma floods condo in Jacksonville, waves destroy foundation

Readers have been contacting me, wondering if FEMA will help homeowners, condominium, or cooperative associations rebuild after two major hurricanes (Harvey and Irma) have devastated communities in Florida, Southeast Texas, and portions of Louisiana.

For example, what will become of River Oak Condominium and The Villas Continental and Yacht Club, located on the St. Johns River intracoastal region of Florida near Jacksonville?

According to a report in The Florida Times Union, dozens of condo units and villas have been condemned and evacuated due to major structural damage, caused by river storm surge during Hurricane Irma.


Storm surge damage from Hurricane Irma forces Orange Park condo owners from homes

Posted September 18, 2017 06:20 pm | Updated 07:08 pm
By Teresa Stepzinski


ORANGE PARK | Residents of two Orange Park condominium complexes on the St. Johns River won’t be going home anytime soon.

Orange Park firefighters waded through chest-deep water, and used ladders to evacuate some second-floor residents trapped at River Oak, 2099 Winterbourne, and The Villas Continental and Yacht Club, 2223 Astor St., when storm surge spawned by Hurricane Irma sent the river flooding into both condominium communities.

Fire Chief Alvin Barker said 24 condo units in one building at River Oak, as well as a total of 16 to 24 units in two buildings at The Villas, sustained severe foundation and other apparent structural damage from the river storm surge making them unsafe for now.


Read more:



The extent of damage, and how much it might cost to repair, are unknown at this time. But one thing is for sure. Homeowners will be paying substantial out-of-pocket expenses for disaster-related repairs or rebuilds, not only with respect to losses in their own units, but also with respect to common property owned by their associations.

Common property, in the case of detached villas, would include landscaped areas, beach access, boat slips and docks, private drives and roadways, as well as retaining walls, dunes, or any storm water management infrastructure. Multifamily condominium building associations are responsible for the “bones” that form the exterior of the building, as well as any shared stairways, catwalks, hallways, and, of course, the foundation.

FEMA’s role, if any, in helping these associations recover depends on several factors.

FEMA provides two kinds of cash assistance in Counties under Presidential declaration as a Disaster Zone: Individual Assistance and Public Assistance.

Individual Assistance may be granted to applicants for short term temporary housing and basic repairs to make their individually owned homes or condo units livable: for example, restoration of utility supply lines, heating or air conditioning units.

Public Assistance may be granted to local, municipal, or county governments, to be used for hauling away debris or making emergency repairs to public roads, and traffic control devices. Public funds might also be allocated for emergency repairs to public housing, public buildings such as libraries and schools, and certain non-profit attractions open to the publics, such as a zoo, animal sanctuary, or museum. In all cases, cash assistance from FEMA is only intended to restore infrastructure to basic safety standards. Local governments are expected to share a portion of the costs.

HOAs, including condo associations, are neither individually owned nor open to use by the general public. By and large, most association governed communities are collectively owned by a private non-profit or mutual benefit organization. FEMA and the IRS regard most HOAs as business entities, whether incorporated or not. Therefore, most associations do not qualify for cash assistance for FEMA.

Orange Park associations damaged by Hurricane Irma are private organizations, so it is highly unlikely that either association will receive cash assistance from FEMA.

However, both associations can apply for low-interest SBA (Small Business Administration) loans to help cover the cost of rebuilding. There is no guarantee the loans will be approved, or that any amount approved will be sufficient to completely restore or replace buildings or common infrastructure.

What about flood insurance?

Of course, if either association had active insurance policies through the National Flood Insurance Program (NFIP), prior to being hit by Hurricane Irma, the associations can begin the difficult and complicated process of filing insurance claims.

Flood insurance policies typically come with hefty deductibles. In Florida, an individual policy has a $2,000 deductible. But association policy deductibles can be tens or hundreds of thousands of dollars, depending on the size and value of assets being insured, and the type of policy elected by the board.

Homeowners will, at the very least, be paying their share of deductibles.

As far as flood insurance coverage, it has been well-documented that FEMA insurance adjusters often grossly underpay on valid claims. A recent New York Post article reported that many victims of Hurricane – Superstorm Sandy have never been made whole on their property losses, even though many maintained flood insurance policies for years prior to making a disaster recovery claim.

The challenge for many owners of property in association-governed communities is daunting. Each homeowner will be paying not only to restore personal property, but also to restore his or her proportional share of common property – anything that is normally maintained by the association.

If either Association has opted not to have flood insurance, if their policy has been allowed to lapse, or if the policy elected is insufficient to cover the loss, homeowners are basically out of luck.

By the way, regular hazard insurance policies for each Association may pay for some wind damage, but will not pay for flood damage, and very likely will not pay to eradicate mold.

It should be noted that either of these associations could be considered a total loss. And in that case, owners will probably fight among themselves as to how to fairly divvy up limited proceeds from their insurance policies. While an investor-owner may have already recouped up front costs to purchase, plus a profit, owner-occupants might suffer substantial loss of financial equity, and may even be stuck paying a mortgage for an unlivable or nonexistent condo unit or villa.


One important note, to clear up confusion.

Some association-governed communities, especially large scale subdivisions, are also governed by special districts such as Community Development Districts (CDDs) or Municipal Benefit or Improvement Districts. In most cases, the special districts fund the cost of construction and maintenance of roads, storm water management infrastructure, recreational amenities, and other shared features of the community. Because special districts are bonafide units of local government, they are eligible for FEMA Public Assistance (cash assistance). So, although it may appear that FEMA is helping some HOAs, but not others, in reality, FEMA is assisting limited purpose local governments, not private Property Owners Associations.

%d bloggers like this:
search previous next tag category expand menu location phone mail time cart zoom edit close