RELOCATE. DEMOLISH. REBUILD
Upton-Jones Offers Choices For Cottage Owners With Erosion Problems
BY SUSAN USHER
Waves routinely wash over 509
2nd Street at Ocean Isle Bcach; blue
crabs and minnows feed where The
Matador once stood overlooking
the Atlantic Ocean. A few rocks ex
posed by the falling tide are the
only vestiges of the summer cottage
and its former occupants.
Owned by W. R. Thomas of
Wcstlake, Ohio, the cottage was
among the first in North Carolina
and at Ocean Isle Beach to be de
molished under the Upton-Jones
provisions of the National Flood
Insurance Program. The case is a
good example of how the program
can work to a homeowner's advan
tage.
In early December 1988, after
much waiting and paperwork, the
cottage was moved off the island
and destroyed. Three months later,
the second of two checks arrived.
If he had it to go through the
lengthy process again, Thomas said
he would, without question. "You
couldn't get rid of the property ? no
one would buy a house in that loca
tion, and it would have cost more to
buy another lot and move the
house," he explained.
"I can't complain," he continued
in a recent telephone interview with
the Beacon. 'They were pretty fair
about it."
National flood insurance is a fed
eral program that enables property
owners to purchase flood insurance,
an alternative to higher federal costs
for disaster assistance. In communi
ties that agree to adopt regulations
and building standards that rcducc
the degree of potential damage from
flooding, the government offers
subsidized insurance policies that
cover flood-related losses to speci
fied levels.
Known idiomatically as simply
"Upton-Jones," recent amendments
to the program go one step farther,
allowing claims to be paid for mov
ing or demolishing an erosion
threatened building even when the
structure is intact ? an incentive to
property owners to avert flood-re
lated losses. There are no costs to
the owner. The federal program
pays for most, if not all, of the
work. It also p?ys p.xnp.nsf?.s rplnlfd
to the claim itself, such as the ad
juster and appraisers.
Interest in Uptuu-Juiics height
ened acmw the Carolina rrvasts last
Scptcmber, when Hurricane Hugo
took its toll along the oceanfront.
The hurricane made landfall near
Charleston, S.C., on Sept. 22. On
Sept. 30, the Upton-Jones measures
were due to expire, spurring a rush
of claims.
Congress did vote, however, to
extend the provisions untii Septem
ber 30, 1991.
Homeowners Have Options
Under Upton-Jones, owners of
insured, qualified buildings have
two options: They can receive up to
40 percent of the building value to
pay for moving and setting up the
house at another site and cleanup
costs. Or they can claim 100 percent
of the value for demolition plus up
to 10 percent for cleanup.
To qualify owners must have
flood insurance and the building
must be insured either 1) on or be
fore June 1, 1988; 2) for two years
prior to certification; or 3) for the
term of ownership if the current
owner has more recently purchased
the building.
The types of costs allowed for re
location include moving the struc
ture; cleaning up the old lot and re
moving any septic system; cost of a
new foundation; new utility connec
tions and conncction fees, including
a new septic system; and other mis
cellaneous expenses. Receipts for
all expenses should be saved for the
adjuster.
If the building is moved, it can be
taken landward on the original lot,
as has been the case in several
Holdcn Beach claims, or to another
lot, as has occurred on several occa
si ens 2t Occin !s!c Bc^ch.
For Ocean Isle Beach property
owner Thomas, the Upton-Jones
amendment came at a good time.
His claim oilers a good example
of the program's demolition alterna
tive.
Thomas Chose Demolition
A Tier much pushing of sand in a
no-win struggle with the encroach
ing sea, the cottage was declared
uninhabitable and was condemned
by the Town of Ocean Isle Beach.
Town officials told Thomas the
house might qualify under Upton
Jones, which had been adopted by
Congress and was awaiting the
President's signature.
Approximately a week after the
amendment was signed into law,
Thomas' insurance company. Coast
al Insurance of Shallotte, began the
claims process and the waiting be
gan.
"It took a long time, more than a
yrar/* Thomas recalled "The gov
ernment is very careful before they
spend the taxpayers' money."
The claims proccss could have
taken even longer If the. structure
had not already been condemned by
the town, the state Division of
Coastal Management would have
had to certify the imminent erosion
threat to the building. There is no
charge for obtaining the certifica
tion.
As it was, an insurance adjuster
spent a day developing the claim ?
taking pictures of the cottage, mea
soring it, checking the tide and the
height of the water under the house.
Then two appraisers worked to de
termine the actual cash value of the
cottage.
Under Upton-Jones, the flood in
surance program uses the lowest
figure from three means of calculat
ing the value: fair appraised market
value of a comparable building that
is not threatened, the original pur
chase price for the building and cost
of improvements adjusted for infla
tion, or the value of the structure
under the flood insurance contract.
Where the structure is not a primary
residence the program bases pay
ment on the structure's actual cash
value, said Kay Couvillon, who
handles flood insurance claims for
Coastal Insurance.
Thomas didn't hear from FEMA
from March until September, then it
was in a letter requesting more in
formation. He complied, and then
another agent camc out to continue
discussions on the value of the
house.
As it turned out, Thomas' insur
ance coverage for the 19- to 20
year-old cottage fell into the same
range as its appraised value. "I
hadn't overinsured it," he said.
Having the nrnpp.rtv adequately,
but not under- or over-insured is im
portant in the claims process. If The
Matador had been over-insured,
Thomas might not have been able to
collect the full amount for which
the structure was insured. If the
building had been underinsurcd, he
would not have received the full
value for demolition or moving
costs if those costs exceeded 40 per
cent of the building coverage.
In early November Thomas was
notified by FEMA's Washington,
D.C., office that a final determina
tion had been made in October: the
cottage qualified under Upton
Jones. Thomas agreed to the settle
ment offer made by FEMA and the
first check was sent, representing 40
percent of the value of the building
with the policy's building deduct
ible withheld.
Once the demolition of the cot
tage in December had been con
firmed, Thomas received the re
maining 60 percent of the value of
the building, plus 10 percent to
clear, up the original home site
That was in March 1989, more than
a year after his house had been con
demned.
"1 didn't make out or anything; in
fact I had a loss," said Thomas.
"But something was better than no
thing. I can't complain. If I hadn't
demolished it, I think the hurricane
? Hurricane Hugo ? would have
gotten it."
The lot, now entirely under wa
Blaze Burns Mobile Home
Cause of a fire that destroyed a
Maco area residence last Wednes
day was still undetermined Friday,
according to the Brunswick County
Sheriff's Department
Det Ray Spencer said the blaze
occurred last Wednesday around
4:30 p.m. at a mobile home occu
pied by Janice Watson on N.C. 87,
one mile east of Maco Truckstop.
No one was home at the time of
the fire, Spencer said. He added lhat
Ms. Watson and her children were
visiting relatives when the blaze
was reported. Leland Volunteer Fire
Department answered the call.
Spencer said the fire might have
been caused by a water heater mal
function. He added, however, that
fire officials had not ruled out the
possibility of arson.
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TARBORO RESIDENT Paul G. Parker relocated Gull Cottage , at 569 Ocean Boulevard West,
Holden Beach, from a perilous perch on the dune's edge to streetside at the same street address.
A deep lot allowed him options not available to every oceanfront homeowner under the Upton
Jones provisions of the National Flood Insurance Program.
tcr on high tide, is of no value to
him. Thomas said he doubts ihe
shore will accrete enough, at least in
his lifetime, to allow rebuilding.
Federal flood insurance only cov
ered the cottage, so the lot cannot
be claimed as a loss.
Here Or There?
Thomas had the option of relocat
ing the cottage ? in his case only to
another lot since his own lot was by
then too small. He opted for demoli
tion because of the added expenses
associated with relocation when re
lated to the value of the cottage.
Statewide, according to the N.C.
Division of Emergency Manage
ment. which coordinates the insur
ance program in North Carolina,
typical moving and setup costs for u
beach house have been estimated at
S15.000 to $30,000, plus the cost of
the new lot. If 40 percent of the in
surance value of the building is less
than the moving costs, then the
owner must pay the difference.
Salvaging A Lot
If Thomas' lot had been consider
ably deeper, he could have demol
ished the erosion-threatened cottage
under Upton-Jones, then later re
built on the same lot, retaining or
increasing its value.
According to Holden Beach
Building Inspector Dwight Carroll,
at least three homes at Holden
Beach have been relocated inland
on the same ocean front lot. And
several other homeowners, includ
ing Jim Gregson of Greensboro,
hope to rebuild on their same lots
after filing Upton-Jones demolition
claims.
So long as the lots meet existing
regulations, there's no problem with
taking that route, according to Jim
Herstine, manager of the N.C. Divi
sion of Coastal Management's re
gional office in Wilmington. "And,"
he added, "that might not be that
uncommon on some of the beaches
in Pender and Onslow counties
where the lots are so deep."
At Holden Beach the lot would
have to meet several criteria, ac
cording to the iOwii building inspec
tor. A single-family home, for in
stance, would have to set back from
the first line of vegetation a distance
at least 30 times the erosion rate, or
60 feet in most cases. The average
annual rate of erosion is two feet
along most of Holden Beach, in
creasing to three feet east of Hill
side Street and toward Lockwood
Folly Inlet
The lot would also have to pro
vide a 25-foot front-yard easement.
A septic tank could be placcd with
in this easement, but could not be
located within the occanfront
CAMA setback.
If the lot were 1 10-feet deep. Car
roll explained, there would be still
be enough room for a 25-foot deep
house.
The Upton-Jones provisions may
entail 2 confusing 2nd even frustnu
ing amount of waiting, red tape and
paperwork But for occanfront prop
erty owners whose property is
threatened by erosion, says Berry
Williams, flood insurance program
coordinator for the N.C. Division of
Emergency Management, "the flood
insurance program offers extremely
attractive financial options."
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