This section of the Far Bar As-Is is pretty straight forward. The Seller must maintain the Property in the condition it was in on the Effective Date of the Contract….

One of the reasons for the Walk-Through is to make sure that the Seller has maintained the Property…

If the Seller has not then the Buyer may have a case for cancelling the Contract. This is not something which is spelled out in the Contract though and thus they would need to litigate it.

Please be sure to tell your Seller to keep the AC on, pool and lawn guys coming until Closing.

OK, so we are now (as of 23 March 2020) looking at mass business closings. Non essential business are being asked to close. Some people can, and will, work from home. Others may not be able to or wish to. This will include things like municipalities, banks, lenders, insurance agents, lawyers and closing agents. So, the question is: Will something, we’ll call it “it” caused by COVID-19 (Corona Virus) delay or stop a Closing?

First, if you can work it out, then I say give that a try, before giving the lawyers a whole bunch of money to litigate what may or may not be a Force Majeur event covered by the Contract. The Florida Association of Realtors just released THIS ADDENDUM in an effort to allow for negotiation of the the time lines and provide for certainty as to what happens and when. But what about contracts without this addendum in place? One would look to, amongst other places, the FORCE MAJEURE or acts of God section of the Contract.

Here is the FORCE MAJEURE section of the Far Bar As Is Contract…

So, first is the issue (the performance or non-performance of “it”) that is delaying or stopping the Closing from taking place occurring through no fault of the Buyer nor the Seller? It’s not that they do not want to do, or not to do, “it” but that they can not.

Second, is “it” essential to the Closing? The performance or non performance of an obligation of, or for the benefit of, either party, the availability of services, (like title and closing agent) insurance or required approvals such as Condominium or HOA? Is the court house open to receive recorded documents like lien releases, deeds and mortgages? Is the local municipality issuing municipal lien certificates? How about the land surveyor, are they working? But does the “it” HAVE to happen in order to Close the sale? A survey or instance (so as to NOT have a title policy exception for encroachments) and insurance are a requirement of loan underwriting. If it’s a cash sale then these are not strictly required. If there is a loan then, if they have delivered loan approval or otherwise gone past the cancellation time, the Contract only allows for very specific circumstances where the inability of the Buyer to close their loan and thus the sale would NOT forfeit any deposits.

Third, is “it” caused by the Force Majeure event?

If the answers are “yes” to whatever one party or the other is pointing to as the reason (the performance or non-performance of ‘it’) for seeking to invoke this clause then yes, it would appear to little old me that this section of the Contract would be applicable and would allow an extension of the Closing Date for 7 days AFTER the event that is stopping the performance or non performance of “it” impeding the Closing has ceased to occur. If the event occurs for more than 30 days (like a war or say a pandemic) then either party may cancel the Contract and the Buyer is entitled to a return of deposits.

So, despite our best efforts my property is now shown inside a Special Flood Hazard Area or SFHA. So what does that mean? How much will my rate go up and when?

FEMA Flood Insurance and the Grandfathering Rule has some great information in it.

First, because you are now in a Special Flood Hazard Area your lender will require you to carry flood insurance. This is also true of anyone who buys your house and uses a loan.

Second, statistically you just lost money. How much is up for debate but one study I saw looking at homes in a newly mapped SFHA after Sandy placed the lost value as some place between 8 and 9%.

If you are located in a newly mapped flood zone AND YOU HAVE A FLOOD POLICY, then FEMA will send you a form Letter F. This is your official heads up but be aware that your insurer AND the company hired by your lender (a/k/a Core Logic) will NOT rely upon this determination letter.

So, what are my rates going to go up to?

Let’s look at my house as it’s a pretty straight forward. I’m in a Shaded Zone X and with the new maps I will be in a Zone AE (SFHA). I have in effect a preferred risk policy which is about $450/year for 250k of building coverage and 100k of contents coverage.

Because I have a policy in place (or placed within 12 months of the adoption of the new FIRM) and because I am in a newly mapped SFHA then my new rates may be based upon those for a property newly mapped into an SFHA. I live in a Florida standard single story CBS home built on a slab on grade BEFORE THE FIRM MAPS WERE ADOPTED in my town (Pre FIRM) without a basement or “enclosure” and because I can answer No to everything under B) below…

The property is eligible for the rate table used for properties newly mapped into an SFHA on or after October 1, 2008 which for a home without a basement or enclosure is $370. for 250k of coverage on the building plus $239 for 100k of coverage on the contents. I filled in this FEMA Form 1660 Table below…

So, my policy is going to go up next year to about $900 and will go up every year after that (at a rate not to exceed 18%) until the full policy rate is met. So what’s that number? What’s the ceiling look like?

Because I am in a newly mapped SFHA area and I have a policy in effect then my new ‘market’ rates MAY be based upon those for my old zone. I live in a Florida standard single story CBS home built on a slab on grade BEFORE THE FIRM MAPS WERE ADOPTED in my town (Pre FIRM) without a basement or enclosure and thus my rate for the building coverage is 1.10/.30. That’s 1.10 for every $100 of the first $60,000 (Basic) of coverage on the structure and 0.30 for the next $190,000 (additional) coverage.

My 250k policy on the structure will go up, eventually, to (60,000/100)*1.10 + (190,000/100)*0.30 = $660. + $570. = $1,230 per year for the structure. And for the contents coverage it is 1.67 for every 100 of the first 25k and 0.53 for every 100 of the next 75k and thus the contents coverage is going to $422.50 + $397.50 = $820. 1230+820 = $2,050.

My policy is going from +/-$450. per year for a preferred risk policy, to 900 in the first renewal year for a newly mapped policy, increased each year until I get to a newly mapped policy in Zone AE BUT based upon the Zone X rate table for pre FIRM constructed home which brings it to $2,050 per year. Again, there is a ramp up period in this, but at the end of it (about 7 years at 18% compounded), this will be the premium.

Now, if I did NOT qualify for the newly mapped flood zone policy rate then my same pre FIRM constructed house in a Zone AE with a 250/100k policy would cost $4,361.50 less the say 25% discount for a favourable CRS of 5 (North Palm Beach is now a 7 so it’s currently 15%) then the premium is at least $3,271 with NO ramp up period.

Property	250000	60000	190000
Contents	100000	25000	75000
Zone X
Pre FIRM		1.1	0.3
Zone X		660	570	1230	STUCTURE
		1.69	0.53		2050	TOTAL
		422.5	397.5	820	CONTENTS
Pre FIRM		1.12	1.03
Zone AE		672	1957	2629	STUCTURE
		1.41	1.84		4361.5	TOTAL
		352.5	1380	1732.5	CONTENTS

So, it is apparent to me that having a policy in place is the way to go. One starts off at 900/year but it also maxes out at the lower rate for the Shaded Zone X ($2,050) instead of the Zone AE ($4,361.50).

I was down in West Palm Beach today (02/05/2020) at the FEMA work shop to explain the new flood maps and I learned a few details.

Read this post I did to determine if you are in a newly mapped flood zone.

FEMA Flood Insurance and the Grandfathering Rule has some great information in it.

First, the majority of the aerial survey data (LIDAR) used is based upon a 2007 survey. This is why places like Frenchmans Harbor are so obviously wrong. It was built in 2013. It is worth scrutinizing the amp and the elevation of your home and the grade around it.

Second, private parties, a group of private parties (like an HOA), or a municipality CAN provide correct elevation data from a registered land surveyor to FEMA for incorporation into the FIRM’s OR a Letter of Map Revision (LoMR) if the map has been adopted before the data was formally accepted.

If you are located in a newly mapped flood zone AND YOU HAVE A FLOOD POLICY, then FEMA will send you a form Letter F. This is your official heads up but be aware that your insurer AND the company hired by your lender (a/k/a Core Logic) will NOT rely upon this determination letter.

They did not for me and thus I applied for and was granted a Letter of Map Amendment. Because of this my home was removed from the SFHA Zone AE and included in the adjacent Shaded Zone X so I got the preferred risk policy . This MAY be an option for you IF THE LOWEST ADJACENT GRADE (LAG) of the dirt around your house is higher than the new Base Flood Elevation for your zone.

If you haven’t got the proverbial leg to stand on then IF you have an existing Flood Policy then your rates will be ramped up to a higher level. Let’ look at mine as it’s pretty common. I was in a Shaded Zone X and with the new maps I will be in a Zone AE (SFHA). I had a preferred risk policy which is about $450/year for 250k of building coverage and 100k of contents coverage. This post goes through the math of how much my flood insurance policy cost is going up now that I’m an SFHA.

The new loan limits for Fannie Freddie “conforming” loans were announced last year and just took effect. Neither Palm Beach nor Martin County are in high cost housing areas (according to HUD, and thus the base amounts apply and the loan limit for single family units in our area is $510,400.

MSA Name	MSA Code	Division	County Name	County Code	State	One-Family	Two-Family	Three-Family	Four-Family	Last Revised	Limit Year
MIAMI-FORT LAUDERDALE-POMPANO BEACH, FL	33100	48424	PALM BEACH	099	FL	$510,400	$653,550	$789,950	$981,700	01/01/2020	CY2020

The FHA Loan limits also increased for 2020 to $373,750 for Palm Beach and Martin County…

MSA Name

MSA Code

Division

County Name

County Code

State

One-Family

Two-Family

Three-Family

Four-Family

Median Sale Price

Last Revised

Limit Year

MIAMI-FORT LAUDERDALE-POMPANO BEACH, FL

33100

48424

PALM BEACH

099

FL

$373,750

$478,450

$578,350

$718,750

$325,000

01/01/2020

CY2020

WOW! I just saw this on the local planning board agenda. On 20 December, in the middle of the holidays, FEMA released the next proposed revision to the Flood Insurance Rate Maps or FIRM’s. CLICK HERE to read what FEMA has to say about it.

CLICK HERE to see the proposed map for Jupiter.

The system is NOT user friendly. Here’s what you need to do. First, look up your current flood zone by address HERE. Note the current flood zone designation, and if you’re in a flood zone, which one and what the Base Flood Elevation is. Now you can look up the new proposed flood map. One can either note the current FIRM panel number as something like 12099C0189F. Then, go to the site where the proposed maps are located HERE and look for the the same panel number BUT with a G at the end instead of an F. Open that pdf file and locate your house. OR, you can locate your FIRM Panel in THIS PANEL LOCATOR MAP for North Palm Beach County.

I just looked up one property that is currently bordering on a special flood hazard area (Zone AE) with a Base Flood Elevation (BFE) of 4′ by NAVD 88 and it is now shown entirely within the SFHA Zone AE and with a Base Flood Elevation (BFE) of 7′. WOW! The base flood elevation has increased by 3′. In most places the BFE increased by 1′.

In terms of real estate values I found one study done post Sandy which found that homes in a newly mapped flood zone decreased in value by as much as 9%.

I just looked at the FIRM Panel for Harbour Isles and every home is now shown in a SFHA Zone AE with a BFE of 7′. The old BFE in the area was 5′. All homes in Pirates Cove are now in the SFHA as well. BUT Admirals Cove is a winner again. However they did it, almost ALL of the homes in there are NOT in the SFHA.

If you have an old survey or flood certification that give the height of your finished floor then you can ready this post on how to change this to the NAVD datum for Palm Beach County.