B.1. Property Acquisition for Open Space

Generally, FEMA-assisted property acquisition projects consist of a community purchasing at-risk structures from voluntary sellers and either demolishing the structures or relocating the structures to a new site outside of the hazard-prone area. The purchased property is then maintained, in perpetuity, for open-space purposes and to restore or conserve the site’s natural functions.

FEMA generally encourages communities to opt for the acquisition and structure demolition model. These projects are simpler because they typically require minimal EHP review, are considerably less expensive and allow homeowners to determine where to relocate.

Property acquisition and structure relocation typically involve the acquisition of land and the physical relocation of an existing structure on that land to an area outside of a hazard-prone area, such as outside of the Special Flood Hazard Area (SFHA) or a regulatory erosion zone. Relocation must conform to all applicable state and local regulations.

Properties acquired with FEMA assistance in structure demolition or relocation projects must be dedicated and maintained in perpetuity as compatible with open space for the conservation of natural floodplain functions. ^[362] These compatible open space uses may include parks for outdoor recreational activities, wetlands management and natural reserves, cultivation, grazing, camping (with some safety-related exceptions) and unimproved, unpaved parking lots. The regulation also authorized FEMA to allow other uses the agency determines are compatible with open space because these uses conserve the natural floodplain function.^[363]

Establishing and maintaining open space uses in perpetuity is accomplished by recording deed restrictions consistent with the FEMA Model Deed Restriction. Recipients and subrecipients are responsible for oversight in ensuring and enforcing proper land use and coordinating with and gaining approval from FEMA on any future land use change or property disposition issues.^[364] FEMA must review and approve the proposed land use of all property acquired for open space purposes unless the use is grading and seeding of the former building site.^[365]

No new structures will be built on the property, except:^[366]

• Public buildings that are open on all sides and functionally related to a designated open space or recreational use.
• Public restrooms.
• Structures that are compatible with open space, recreational or wetlands management use and applicable floodplain management policies and practices, and for which compatibility is confirmed in writing by the FEMA regional administrator before construction of the structures begins.
• Structures described in the above three bullets that will be elevated or floodproofed to the Base Flood Elevation plus one foot of freeboard and that meet the applicable requirements of the National Flood Insurance Program (NFIP) floodplain management regulations in 44 Code of Federal Regulations (CFR) § 60.3.^[367]

To receive assistance for property acquisition and structure demolition or relocation projects that create open space, applicants and subapplicants must meet the regulatory requirements in 44 CFR Part 80 and the criteria outlined below and in Part 4. A project may not be framed in a manner that has the effect of circumventing these requirements.^[368]

For a property to be eligible for FEMA-assisted acquisition, the subapplicant must acquire the full fee title of the property (except for any easements and encumbrances that FEMA determines are compatible with open space) from a willing, voluntary seller, or must retain such interest.^[369] The subapplicant must commit not to use eminent domain if the property owner chooses not to participate and must verify that the property is not needed as part of another intended or planned HMA project.^[370] Once assistance has been awarded for the project, a property may not be subdivided before it is acquired except for portions outside the SFHA or any risk zone identified by FEMA.^[371]

Subrecipients must apply deed-restriction language to all acquired properties to ensure the property is maintained in perpetuity as open space consistent with natural floodplain functions, as agreed to by accepting FEMA mitigation award assistance.^[372] Deed restriction language is applied to acquired properties by recording the open space and deed restrictions. Modifications to the language in the FEMA Model Deed Restriction can only be made with prior approval from the FEMA Office of Chief Counsel through the appropriate FEMA regional office.

A property is eligible for acquisition if it meets all the following requirements:

• FEMA approves the proposed land use of all property acquired for open space purposes, unless the use is limited to grading and seeding of the former building site (FEMA has determined that grading and seeding is generally not a separate use; rather grading and seeding of the building site is necessary and reasonable part of a demolition. Additional approval is not required if the activity is limited to grading and seeding of the former building site).
  • FEMA must review each request to determine if the proposal is compatible with the purpose of open space as stated in regulation and consistent with the deed restrictions, grant agreements, the HMA Guide or most current edition, and floodplain management requirements.^[373]
  • FEMA reviews open space land use either when it reviews a subapplication for acquisition of land for open space or once the acquisition is completed, if the subrecipient proposes a change in land-use post-acquisition.
• It will be acquired from a willing, voluntary seller.
  • The owner of the acquired property must voluntarily agree to sell the land.^[374] During the development of an acquisition project for open space, property owners are responsible for notifying the subapplicant of their interest in participating in the proposed project. They must provide all information requested by the subapplicant and complete all actions that are required to complete the subapplication and to implement the property acquisition and structure demolition or relocation.^[375]
• It contains an at-risk structure that may or may not have been damaged or destroyed because of a hazard event. In certain circumstances, undeveloped, flood-prone or at-risk land that is part of a project with an adjacent eligible property with one or more existing structure(s), and the total project remains cost-effective, may also be eligible.^[376]
• The subapplicant acquires or retains fee title, except for encumbrances FEMA determines are compatible with open space uses, as part of the project implementation.^[377]
• It is not contaminated with hazardous materials at the time of acquisition other than incidental demolition or household waste.^[378]
  • It is not part of an intended, planned or designated project area for which the land is to be acquired by a certain date and/or where there is an intention to use the property for any public or private use that is inconsistent with the open space deed restrictions and FEMA acquisition requirements (e.g., roads, flood risk reduction levees). The property acquired or from which a structure is removed must be dedicated as open space in perpetuity consistent with the regulations in 44 CFR Part 80.^[379]

Other eligibility requirements are as follows:

• In accordance with the Coastal Barrier Resources Act of 1982,^[380] HMA programs may assist projects in Otherwise Protected Areas if they do not require flood insurance after project completion.^[381] Acquisitions in a John H. Chafee Coastal Barrier Resources System (CBRS) unit are eligible only if they qualify for one of the exceptions in Section 6 of the Coastal Barrier Resources Act.^[382] That is, acquisitions are eligible if they are consistent with the purposes of the Coastal Barrier Resources Act and qualify as projects for the study, management, protection and enhancement of fish and wildlife resources and habitats.^[383]
  • All projects that occur in or adjacent to CBRS units must meet one of the Coastal Barrier Resources Act exceptions and require that FEMA consult with the appropriate U.S. Fish and Wildlife Service Ecological Services field office.
  • Proposed actions carried out within or adjacent to an Otherwise Protected Areas do not require consultation with Fish and Wildlife Service.
• Any structure that is relocated must be placed outside the SFHA and outside any regulatory erosion zone or other mapped hazard area, and the relocation must conform to any other applicable state or local land use regulations.

Eligible activities include property acquisition and structure demolition, as well as property acquisition and structure relocation. These activities are eligible under HMGP, HMGP Post Fire, BRIC and FMA; however, for purposes of Flood Mitigation Assistance (FMA), only property acquisition and structure demolition or relocation based on flooding is eligible.^[384]

The following sections outline special considerations.

FEMA’s regulation on eligible costs for acquisitions states that the agency may assist eligible pre-award costs at its discretion as assistance is available.^[385] Recipients and subrecipients may be reimbursed for eligible pre-award costs for activities directly related to the project proposal’s development. Demolition, construction and ground disturbing activities that were implemented, initiated or completed prior to an award generally are not eligible, and FEMA generally does not reimburse costs for these activities.^[386]

If FEMA determines a property owner used private funds to demolish an event-damaged structure, and at the time of the demolition the property had not been in a subapplication submitted to FEMA, the demolition is not a connected action. Therefore, the demolition is not subject to FEMA review and approval for EHP compliance, and the costs of the demolition are not considered pre-award costs. Therefore, the demolition does not preclude a finding of project eligibility. If the demolition is not connected to a FEMA federal action, no FEMA EHP review of the demolition is necessary, and demolition costs will not be eligible for reimbursement under HMA programs. The demolition must be in accordance with state and local legal requirements and any applicable federal law. However, FEMA will continue to analyze the cumulative impacts of any privately conducted demolition and subsequent FEMA-assisted projects as required under the National Environmental Policy Act as part of its EHP review process. ^[387]

The federal action is recognized as beginning when the project subapplication is submitted to FEMA. Properties where pre-award demolition activities have occurred prior to the subapplication being submitted to FEMA may be eligible when:

• No demolition is underway at the time the subapplication is submitted. A homeowner-initiated demolition must be fully completed prior to that property being submitted to FEMA.
• Demolition costs are not included in the subapplication. Private individuals have demolished damaged structures using private funds or other non-federal funds prior to application for HMA.
• The demolition is in accordance with state and local legal requirements and any applicable federal law.

Once the property is included in an HMA subapplication submitted to FEMA, work must not be initiated prior to issuance of the subaward. Otherwise, the work would be a connected action and subject to FEMA review.

Structures that show signs of damage that was determined to have been caused by sinkhole activity, or structures that have moved or have begun to move downward into a sinkhole, are eligible for consideration for acquisition, relocation, or demolition under the Hazard Mitigation Grant Program (HMGP), Hazard Mitigation Program Post Fire (HMGP Post Fire) and Building Resilient Infrastructure and Communities (BRIC).

Examples of indicators of sinkhole damage on or related to the structure, when accompanied by evidence of a sinkhole, may include:

• The descending of the structure below the original grade of construction.
• Doors and windows that fail to close properly or exhibit changed behavior.
• Cracks in walls, floors, adjacent pavement and the ground surface.
• Floors with sloping or unevenness that had not been apparent previously.

Sinkhole development may also be determined by observing disturbances around the affected structure. These site disturbances can support a determination that a sinkhole may be the cause of the structural damage listed above.

To be eligible for assistance, the applicant and subapplicant must submit supporting documentation that the cause of structural damage is sinkhole-related and at least partially due to a natural geologic process. The documentation must be prepared and signed by an appropriately registered, certified, or licensed state or local professional engineer, architect, landscape architect or geologist. Documentation of disturbances around the structure may also be included; however, the primary eligibility factor must be evident from structural damage from a sinkhole.

All other applicable eligibility considerations described in the other parts of the HMA Guide also apply.^[388]

A general list of ineligible activities is included in Part 4.

Applicants and subapplicants must demonstrate that mitigation projects are cost-effective consistent with the requirements described in Part 5.

FEMA determined the national average for benefits for acquisition projects is $323,000. Based on this analysis, FEMA developed pre-calculated benefits for acquisition projects located in the SFHA (1% annual chance floodplain) and for certain projects, such as Repetitive Loss or Severe Repetitive Loss acquisitions, located outside the SFHA. For Benefit-Cost Analysis (BCA) purposes, acquisition/demolition and acquisition/relocation projects are treated the same.

An overview of the pre-calculated benefits to determine cost-effectiveness is provided in Table 18.

Table 18. Eligibility for Pre-Calculated Benefits Based on Structure Type and Location

Structure Location	Eligible Use Criteria
Acquisitions Within Special Flood Hazard Areas
Single-Unit Residential Structure	The cost of the acquisition is less than or equal to $323,000.
Multi-Unit Residential Structure	The cost of the acquisition is less than or equal to $323,000 multiplied by the number of ground- or first-floor units.
Non-Residential Structure	The cost of the acquisition is less than or equal to $323,000, and the structure must be occupiable.
Acquisitions Outside Special Flood Hazard Areas
Single-Unit Residential Structure Designated Repetitive Loss, Severe Repetitive Loss, or with the Lowest Floor Elevation below the Base Flood Elevation	The cost of the acquisition is less than or equal to $323,000.
Multi-Unit Residential Structure Designated Repetitive Loss, Severe Repetitive Loss, or with the Lowest Floor Elevation below the Base Flood Elevation	The cost of the acquisition is less than or equal to $323,000 multiplied by the number of ground- or first-floor units.
Non-Residential Structure Designated Repetitive Loss, Severe Repetitive Loss, or with the Lowest Floor Elevation below the Base Flood Elevation	The cost of the acquisition is less than or equal to $323,000, and the structure must be occupiable.

FEMA has determined that the acquisition of a structure located in the SFHA, as delineated on the Flood Insurance Rate Map (FIRM) or based on best available data, with total project costs less than or equal to $323,000, is considered cost-effective.^[389] For projects that contain multiple structures, the average cost of all structures in the project must meet the stated criterion (provided all structures are within the SFHA).

The specific geographic location of structures can increase acquisition costs. The benefit amounts identified above may be adjusted by using the most current location factors included in industry-accepted construction cost guides. If a multiplier is used, a copy of the source document must be included as part of the grant application.

The applicant or subapplicant must provide a map that clearly identifies the structure’s footprint and delineates the SHFA, using the FIRM or best available data. If any part of the structure lies within the SFHA, the applicant or subapplicant can use the pre-calculated benefit value to demonstrate cost-effectiveness. No other detailed analysis is required. These pre-calculated benefits can be used in riverine and coastal SFHAs.

For up-to-date information on the dollar value of pre-calculated benefits visit the FEMA “Benefit-Cost Analysis” webpage.

FEMA has determined that the acquisition of a structure designated as Repetitive Loss or Severe Repetitive Loss, regardless of location within or outside the SFHA, with total project costs less than or equal to $323,000, is considered cost-effective.^[390] To use this pre-calculated benefit to demonstrate cost-effectiveness, the structure(s) in the acquisition project must meet one of the following definitions for Repetitive Loss or Severe Repetitive Loss.

Repetitive Loss refers to a structure or property meeting either (1) or (2) from the following definitions:

1. A structure that meets one of the two following qualifiers:
   1. Two or more claims of more than $1,000 paid by the National Flood Insurance Program (NFIP) within any rolling 10-year period since 1978.
   2. Two or more claims (building payments only) that, on average, equal or exceed 25% of the market value of the property.^[391]
2. A structure covered by a contract for flood insurance made available under the NFIP that meets both of the two following qualifiers:
   1. Has incurred flood-related damage on two occasions, in which the cost of the repair, on average, equaled or exceeded 25% of the market value of the structure at the time of each such flood event.
   2. At the time of the second incidence of flood-related damage, the contract for flood insurance contains increased cost of compliance coverage.^[392]

Severe Repetitive Loss refers to a structure or property meeting either (1) or (2) from the following definitions:

1. A structure that meets one of the two following qualifiers:
   1. Received four or more separate claim payments of more than $5,000 each (including building and contents payments).
   2. Received two or more separate claim payments (building payments only) where the total of the payments exceeds the current value of the property.^[393]
2. A structure covered by a contract for flood insurance made available under the NFIP that has incurred flood-related damage and meets one of the two following qualifiers:
   1. Four or more separate claims payments (includes building and contents) have been made under flood insurance coverage with the amount of each such claim exceeding $5,000 and with the cumulative amount of such claims payments exceeding $20,000.
   2. At least two separate claims payments (includes only building) have been made under such coverage, with the cumulative amount of such claims exceeding the market value of the insured structure.^[394]

Alternatively, FEMA has determined that the acquisition of a structure, where the Lowest Floor Elevation is lower than the Base Flood Elevation and the total project costs less than or equal to $323,000, is considered cost-effective.^[395] For projects that contain multiple structures, the average cost of all structures in the project must meet the stated criterion.

If using the Lowest Floor Elevation and Base Flood Elevation to qualify, the Lowest Floor Elevation and Base Flood Elevation must be provided for each structure. No other detailed analysis is required.

The specific geographic location of structures can increase acquisition costs. The benefit amounts identified above may be adjusted by using the most current location factors included in industry-accepted construction cost guides. If a multiplier is used, a copy of the source document must be included as part of the grant application.

For up-to-date information on the dollar value of the pre-calculated benefit, refer to the FEMA “Benefit-Cost Analysis” webpage.

If a multi-unit residential structure would otherwise qualify to use the acquisition pre-calculated benefit of $323,000, the benefit may be adjusted by multiplying the number of ground- or first-floor units by $323,000. For example, the pre-calculated benefit for an eight-unit apartment building with four ground-floor units would be $1,292,000 ($323,000 multiplied by the number of ground- or first-floor units [in this case, four]). If the entire project cost is less than that amount, the project could use the pre-calculated benefit for acquisitions if it meets the other requirements. Documentation such as building plans, should be provided to justify the number of first- or ground-floor units.

For up-to-date information on the dollar value of pre-calculated benefits, visit the FEMA “Benefit-Cost Analysis” webpage.

The pre-calculated benefit for acquisitions may be used for non-residential structures if they would otherwise qualify by meeting the criteria described above (i.e., the structure is in an SFHA, is designated as Repetitive Loss or Severe Repetitive Loss, or has its Lowest Floor Elevation below the Base Flood Elevation). However, all structures counted must be occupiable, meaning they are designed to have people living or working in them. Small ancillary structures such as sheds, outhouses and garages may not be counted in the number of structures, although they may be demolished as part of the project.

For up-to-date information on the dollar value of the pre-calculated benefit, refer to the FEMA “Benefit-Cost Analysis” webpage.

The acquisition of structures that are declared substantially damaged (from any hazard) and located in a riverine SFHA on a preliminary, advisory or effective FIRM are considered cost-effective. Substantial damage is defined as damage sustained by a building whereby the cost of restoring the building to its before-damaged condition would equal or exceed 50% of the market value of the building before the damage occurred.^[396] If this methodology is used, the project subapplication must include a certification from the local floodplain administrator or a certified state/tribal floodplain specialist that identifies and declares the structure as substantially damaged.

The FEMA BCA Toolkit includes a methodology for calculating the Benefit-Cost Ratio (BCR) for the acquisition of properties in landslide hazard areas where there is an immediate threat of catastrophic slope failure (within five years of application development).^[397] Applicants are required to complete the BCR based on the replacement cost value, the number of occupants and the project costs; the BCA Toolkit will calculate all other values automatically using standard FEMA values and methodologies. The BCR calculation is based on having no recurrence interval because once the landslide occurs there would be a catastrophic failure, and the structure would not be at risk for further landslides. Applicants are required to attest that the structure is within five years of imminent collapse because of landslide hazards.

Applicants may use the landslide acquisition BCA approach for the acquisition of residential and non-residential properties in sinkhole hazard areas. This methodology does not incorporate a recurrence interval because once a sinkhole event occurs, failure would be catastrophic, and a total loss would result. Residential acquisition benefits are based on replacement cost value of the structure and contents, displacement costs and 5% of the value of human life. Benefits for non-residential acquisitions are based on the replacement cost value, relocation costs and business losses. For either type of acquisition, project costs include demolition and disposal or relocation. Applicants are required to attest that the structure is within five years of imminent collapse because of landslide hazards.

Costs are based on expenses required to purchase the house at the pre-event market value (like in routine flood-hazard acquisitions). Applicants are required to attest that the structure is within five years of imminent collapse because of sinkhole hazards. They may obtain this determination from a state or local professional geologist or engineer. If they hire a professional geologist or engineer to make the determination, the costs for those services may be eligible as a pre-award expense.

Projects must be consistent with Part 4. Mitigation projects assisted by HMA programs must be both feasible and effective at mitigating the risks of the hazard(s) for which the project was designed. A project’s feasibility is demonstrated through conformance with accepted engineering practices, established codes, standards, modeling techniques or best practices.

All subapplications submitted to FEMA must meet the EHP criteria in Part 4. All subapplications must provide the information described in Part 6 so that FEMA may perform the EHP review.

Properties that are contaminated with hazardous materials are not eligible for acquisition.^[398] The subrecipient must ensure a property with past or present commercial or industrial use and any adjacent properties suspected of having hazardous materials at the site are not contaminated when the project application is approved.

If FEMA selects the subapplication for further review, the subrecipient must meet the requirements of the Environmental Protection Agency’s “all appropriate inquiries” rule,^[399] including contracting with an appropriately qualified environmental professional to perform a Phase I environmental site assessment as defined by the rule. Any assessment must be in accordance with the procedures of the most current ASTM International Standard E1527, Standard Practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process or ASTM International Standard E2247, Standard Practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process for Forestland or Rural Property. The costs for meeting these requirements are considered eligible project costs if such costs are included in the project budget.

In accordance with these criteria and 44 CFR § 80.17(a), the subrecipient shall:

• Conduct interviews with past and present owners, operators and occupants.
• Search for recorded environmental cleanup liens.
• Review federal and state, local, tribal and territorial government records.
• Conduct visual inspections of the facility and of adjoining properties.

The purpose of the Phase I environmental site assessment is to identify conditions that are indicative of releases and threatened releases of hazardous substances, pollutants, contaminants, petroleum and petroleum products, and controlled substances on, at, in or to the subject property by gathering the following types of information about the subject property:

• Current and past property uses and occupancies.
• Current and past uses of hazardous substances.
• Waste management and disposal activities that could have caused releases or threatened releases of hazardous substances.
• Current and past corrective actions and response activities undertaken to address past and ongoing releases of hazardous substances.
• Engineering controls.
• Institutional controls.
• Current and past uses and conditions of adjoining properties and the surrounding area (consistent with ASTM E1527) that could be considered a recognized environmental condition (i.e., the presence or likely presence of any hazardous substances or petroleum products in, on or at the property).

The subrecipient must gather all publicly available information obtainable from its source within reasonable time and cost constraints and that can practicably be reviewed.

If the Phase I environmental site assessment “all appropriate inquiries” report identifies the presence of hazardous substances, pollutants, contaminants, petroleum and petroleum products, or controlled substances on, at or in the subject property, the subrecipient must require the owner to remove the materials or remediate the property in accordance with any applicable federal, state, local, tribal or territorial government requirements. If a Phase II environmental site assessment (to evaluate suspected areas and to identify the nature and extent of contamination on, at, in or to the property) is required, the costs of this study are not eligible mitigation grant project costs. Additionally, the cost of a Phase II environmental site assessment (to determine remediation plans, cleanup and certification of the property) is not an eligible mitigation grant project cost.

A contaminated property must be certified clean,^[400] which requires a letter from the appropriate federal, state, local, tribal or territorial entity stating that no further remedial action is required to protect human health or the environment. A contaminated property must be certified clean before any interest in the property is purchased. The seller must also agree to indemnify the recipient, FEMA and the subrecipient for any liability arising from previous property contamination.

The Acquisition Demolition-Required Information for EHP Review FEMA job aid lists the documentation needed for FEMA to complete the EHP compliance review process for each project.

Mitigation projects sited within the SFHA are eligible only if the jurisdiction is participating in the NFIP. For FMA only, all properties included in a subapplication for acquisition must be NFIP-insured at the time of the opening of the application period. For more information, refer to Part 4.J.

All subapplications submitted to FEMA must meet the eligibility criteria in Part 4. All subapplications must have a scoping narrative in accordance with Part 6. Project-specific criteria are highlighted below.

FEMA may request additional information after the subapplication has been submitted to ensure that all necessary information is received. However, all information required by the regulations and the HMA Guide must be received before FEMA can make an assistance award decision or final approval.

Subapplicants are responsible for meeting the requirements and time frames in 44 CFR § 80.13 and for providing the information that is necessary for the applicant and FEMA to determine the eligibility of the project as described in the subapplication. The subapplication must also contain property and project information, including the project description and EHP information.

For property acquisition projects, the subapplication must include the following:

• The value of each property (pre-event or current, as appropriate) and documentation demonstrating how the market value was determined.
• An appeal or reconsideration process for property owners who dispute the purchase offer property valuation.
• Statement of Assurances.
• A sample of the deed restriction.
• Property owner documentation.
• Voluntary interest documentation.
• Certification of owner status for pre-event value.
• Consultation regarding other ongoing federal activities.

The subrecipient must conduct a title search for each property it plans to acquire. The purpose of the title search is to ensure the owner is the sole and actual titleholder to the property, to identify other persons with a property interest if the owner is not the sole and actual titleholder, and to ensure the title is clear (i.e., no mortgages or liens are outstanding on the sale of the property). In addition, the property must not have easements or other encumbrances that are incompatible with open space and would make the property either ineligible for acquisition or non-compliant with FEMA’s open space land-use restrictions.

All known encumbrances that are incompatible with open space use must be revised or extinguished to ensure the property use is consistent with the open space requirements in 44 CFR Part 80 and the HMA Guide. New property acquisitions for properties encumbered with leases or other instruments allowing for subsurface hydraulic fracturing and horizontal directional drilling activities may be eligible for HMA funding. To demonstrate a clear fee title, the applicant will obtain a title insurance policy reflecting that all incompatible easements or other encumbrances to the title have been extinguished.^[401]

If evidence obtained during the review indicates long-dormant subsurface rights (usually exceeding 50 years or beyond the reach of a standard title search) and the subsurface owner’s identity is unknown or otherwise not reasonably ascertainable, FEMA may approve the eligibility of the acquisition on a case-by-case basis. If a right to access a subsurface resource is discovered and asserted after the acquisition, the recipient and subrecipient are required to take all appropriate action to enforce the open space restrictions required by 44 CFR § 80.19.

Other title-related requirements are as follows:

• A title insurance policy demonstrating the clear title must be obtained for each approved property that will be acquired.
• A physical site inspection for each property must be conducted to verify there are no physical encumbrances to the property (a site survey may be necessary to clearly establish property boundaries).
• The property title must be transferred by a warranty deed in all jurisdictions that recognize warranty deeds.
• All incompatible easements or encumbrances must be extinguished.
• The subrecipient organization must take possession at settlement.
• The subrecipient must record the deed at the same time as settlement along with the program deed restrictions.
• The deed transferring title to the property and the program deed restrictions will be recorded according to state law and within 14 calendar days after the settlement.
• All property transfers must be consistent with 44 CFR Part 80 and the HMA Guide.

The Statement of Voluntary Participation (FF-206-FY-124) formally documents the notice of voluntary interest as required by 44 CFR § 80.13(4) and information related to the purchase offer. The subrecipient must provide FEMA with a signed copy of the Statement of Voluntary Participation for each property post-award. Subrecipients may choose to use their own modified version of the Statement of Voluntary Participation if it contains all elements of FEMA’s Statement of Voluntary Participation and with prior approval from FEMA.

Participation is not voluntary for tenants of properties to be acquired and therefore tenants may be entitled to benefits under the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (URA).^[402] For more information, refer to Part 12.B.1.3.7.2.

Participation in property acquisition and structure demolition or relocation projects by property owners is voluntary. Prospective participants must be informed in writing that participation in the program is voluntary and that the subapplicant will not use its eminent domain authority to acquire their property for the project purposes if negotiations fail and the property owner(s) chooses not to participate. Documentation of voluntary interest must be signed by each property owner and should be obtained as early in the project development as possible. The documentation must be submitted as specified in 44 CFR § 80.13. A notice of voluntary interest can be documented using individually signed statements or a group sign-up sheet. The documentation must include the printed name of property owner(s), property address, contact information and signature of the interested property owner(s) associated with each property, and clear acknowledgment by every property owner of the following language:

During project implementation, the subrecipient must execute a more formal Statement of Voluntary Participation with the owner(s) of each property identified in the subapplication scope of work.

Subapplications for property acquisition and structure demolition or relocation must include the FEMA Statement of Assurances. The Statement of Assurances must be signed by the subapplicant’s authorized agent. The Statement of Assurances must provide acknowledgment of, and agreement to, the requirements in the Statement of Assurances.

Subapplications that do not include a signed Statement of Assurances are incomplete and will not be considered for assistance.

The Statement of Assurances describes the grants management responsibilities of local communities, including tribes or the qualifying conservation organization receiving grant assistance for acquisition projects. It is submitted with the initial subapplication and can also supplement the state/territory-local or state-tribal agreement. The Statement of Assurances includes information specific to acquisitions and must include the following:

• Declaration that the land will be maintained as open space for the conservation of natural floodplain functions, and the land uses will primarily consist of the “generally allowable uses” that are compatible with open spaces as indicated in 44 CFR Part 80, the HMA Guide and an official deed restriction of the property.
• Declaration that the local government, tribal government or qualifying conservation organization (subrecipient) will be responsible for all maintenance costs of the property.
• Declaration that the proposed acquisition is consistent with local hazard mitigation, land use and environmental plans, as well as relevant statute, regulations and the HMA Guide.
• Declaration that adjoining property owners will be notified about the acquisition project.

The subapplication must include a sample of the deed restriction (not including property-specific details) that the subapplicant intends to record with each property deed. The sample must be consistent with the FEMA Model Deed Restriction.

If the subapplicant makes any changes to the language in the Model Deed Restriction, the subapplicant must seek approval from the FEMA Office of Chief Counsel, through their FEMA regional office, for the changes. Changes may be made for compliance with local requirements, but changes to substantive program provisions will not be approved.

The subapplicant must follow the procedure described in the previous two paragraphs for open space acquisitions in CBRS units. The subapplication must include a sample of the deed restriction for review and approval by the FEMA Office of Chief Counsel, through the FEMA regional office, to ensure compliance with all deed restriction requirements specific to these areas.

As part of the scope of work, all subapplications must include an activities description referencing industry standards or project plans and specifications as well as a schedule for completing the activities.

Once a property is included in an HMA subapplication submitted to FEMA, no demolition work can be initiated prior to project review, approval and award. In addition, no work can be underway at the time the subapplication is submitted. However, properties where private individuals have demolished damaged structures using private assistance or other non-federal assistance prior to application for HMA are eligible for inclusion in HMA project applications if the demolition is not connected to the project. The demolition costs cannot be included in the project subapplication.

Allowable costs are costs that are necessary and reasonable for the proper and efficient performance and administration of the federal award. Allowable costs for property acquisition and structure demolition or relocation projects for open space depend on the scope of the project.

Generally allowable costs are listed in Table 19. Other costs will be evaluated on a case-by-case basis. A shortfall is the difference between the amount the subrecipient pays an owner for a damaged residence and the cost of a comparable replacement home in a non-hazard-prone location if the cost of the replacement home is higher. A shortfall is an allowable cost up to $31,000 per property.^[403]

Table 19: Generally Allowable Costs for Property Acquisition and Structure Demolition or Relocation

Property-related costs that are not allowable under HMA programs include but are not limited to the following:

• Compensation for land that is already held by an eligible entity, even if the eligible entity is not the subapplicant for the project; however, compensation for development rights (e.g., obtaining an open space easement) may be an allowable cost.
• Property acquisition and structural demolition projects where state and/or local laws or ordinances create a legal condition that requires structure demolition and/or prohibits future development of the property (e.g., a coastal setback requirement).
• Remediation, remediation plans, and environmental cleanup and certification of contaminated properties; however, permitted disposal of incidental demolition, household hazardous wastes and fuel tanks that support a residential use only may be an allowable cost.
• Aesthetic improvements and landscaping, new site property acquisition, and public infrastructure and utility development.

All subapplications must include a line-item breakdown of all anticipated costs.

Subapplicants may apply for subrecipient management costs to cover administrative costs. Management costs must be included in the subapplication budget as a separate line item. More information about the requirements for management cost requests can be found in Part 13.

The final Mitigation Offer to a property owner is based on the value assigned to a property (“purchase offer”) and applicable additions and deductions. Deductions to the purchase offer may include duplication of benefits deductions, and additions may include any supplemental housing or insurance incentive payments. The subrecipient must ensure all property owners are treated fairly and are offered an equitable package of benefits. The subrecipient (using a Statement of Voluntary Participation) must inform each property owner in writing the market value (pre-event or current) of the property and the method used to determine the final Mitigation Offer.

If several entities or programs are acquiring property in the same area, property owners may find it confusing if different offers are made to area owners at different times. To avoid any negotiation difficulties or confusion, FEMA recommends the subrecipient coordinate the release of property valuation information and purchase offers to property owners for the various programs. The subrecipient may wish to set a time limit with the property owner for the validity of a purchase offer. The subrecipient must provide an appeal or reconsideration process for property owners who dispute the amount of the purchase offer property valuation.

For each property identified for acquisition, the subrecipient shall establish and document a property value based on market value, which is defined as:

The current market value reflects the property value at the time of the final Mitigation Offer. Pre-event market value is defined as the market value of the property immediately before the relevant event that affected the property. For HMGP and HMGP Post Fire, the relevant event for assistance is the major disaster under which assistance is available. For BRIC, the pre-event market value is the value before the most recent major disaster declaration; however, if the project is occurring separately from or more than 12 months after a disaster event, the current market value may be more appropriate. For FMA, the pre-event market value is defined as the property’s value immediately before the most recent flood event resulting in an NFIP claim of at least $5,000.

The benefit of the pre-event market value is available only to owners who owned the property during the event and are nationals of the United States or qualified aliens. ^[405] If the current property owner purchased or took possession of the disaster-damaged property after the major relevant event or is not a national of the United States or qualified alien, the subrecipient may not offer the owner more than the current market value.^[406]

The relevant event may vary under the HMA programs, but the pre-event market value or current market value may be used at the recipient’s discretion. The recipient should coordinate with the subrecipient to determine whether the valuation should be based on the pre-event market value or current market value. The current market value may be the most efficient method if no damage has occurred to the property or if a reasonable amount of time has elapsed since the event.

FEMA generally does not include subsurface mineral valuations in the current market value. However, there is no legal or regulatory requirement to exclude those values. Costs associated with surface or subsurface land appraisal are considered part of the overall cost-effectiveness evaluation of any acquisition project.

Typically, property acquisition and structure demolition or relocation projects require the valuation of the property (land and structures as a whole). When an eligible entity already owns the property and wants to deed-restrict it, valuation is for the structure and development rights instead of for the land. Relocation projects require the valuation of land only.

The following appraisal methodology must be used to determine property value:

• The appraisal must be conducted by an appraiser in accordance with The Appraisal Foundation’s Uniform Standards of Professional Appraisal Practice.
• The appraiser must comply with relevant state laws and requirements and have the appropriate certification, qualifications and competencies based on the type of property being appraised.
• The subrecipient must coordinate with the recipient to determine the assumptions that will be used in the appraisal (i.e., current or pre-event market value), and the assumptions must be applied consistently throughout the project area for all properties to be acquired.
• When determining the value for many structures, the subrecipient may conduct appraisals to establish a statistical sampling of property values and develop an adjustment factor to apply to tax-assessed values so that they reasonably reflect each property’s market value.

Potential deductions from and additions to the purchase offer must also be considered.

Before the property owner can receive a pre-event value for the property, the subrecipient must provide certification obtained from the property owner that the property owner is a national of the United States or a qualified alien. For property owners who are not nationals of the United States or qualified aliens, or who refuse to provide certification, the subrecipient will offer no more than the appraised current market value for the property. ^[407]

Prior to the award or final approval, subrecipients will ask all property acquisition and structure demolition or relocation project participants (property owner(s)) to certify they are a national of the United States or a qualified alien. Subrecipients will offer participants who refuse to provide such certification, or who are not national of the United States or qualified aliens, no more than the appraised current market value for their property. Participants who refuse to certify or are not national of the United States or qualified aliens may not receive supplemental housing payments.

For property owners who are seeking pre-event value, subrecipients may use Declaration and Release (FEMA Form 009-0-3) as certification of the nationality of participating property owner(s). At the time of certification, the subrecipient will ask the property owner to show a form of identification (any government-issued identification displaying the signer’s name). If the property owner has applied for FEMA disaster assistance, Form 009-0-3 will already be on file at FEMA, and the subrecipient will instead request verification from FEMA through the recipient that a certification is on file.

The recipient, subrecipient and property owner must identify and report any potential duplication of benefits. FEMA may assist with this process if needed, but it is the responsibility of the recipient and subrecipient to validate all duplication of benefits. Refer to the FEMA “Duplication of Benefits” webpage for more in-depth information. FEMA deducts benefits from other sources from the purchase offer. Repair assistance that has been used for its intended purpose is generally not deducted if documentation of the use is provided.

Examples of when duplication of benefits may occur in a property acquisition and structure demolition or relocation project are as follows:

• The subrecipient offers the full pre-event market value to the property owner, but the property owner cannot provide documentation to demonstrate that assistance such as insurance, loans, repair grants, compensation in compliance with a court order, or other such assistance has been used for its intended purpose. This is because payment of the full pre-event market value compensates the owner for the loss of value that has occurred.
• The subrecipient offers the full pre-event market value to the property owner, but legal claims are appropriate or legal obligations arise in connection to the property that may provide a benefit to the property owner. The parties involved in pending legal disputes must take reasonable steps to recover benefits available to them.
• Relocated tenants receive relocation assistance and rental assistance but have received payments for the same purpose as part of the disaster assistance provided by any agency or payments from any other source. Any acquisition-related assistance provided to tenants must be reduced accordingly. However, tenant-related duplication of benefits deductions do not affect the amounts available to the property owner.

For property valuations based on the pre-event market value, the following procedures can help prevent mitigation assistance from duplicating benefits available from other sources:

• The subrecipient establishes the purchase offer property value as of a certain date.
• The subrecipient provides the recipient with a list of property owners participating in the property acquisition and structure demolition or relocation project as well as a list of tenants who may be affected by the acquisition.
• The recipient and FEMA inform the subrecipient of the amount of repair or replacement assistance available to each property owner and rental or relocation assistance available to tenants. FEMA provides NFIP coverage information to the recipient and subrecipient, including the amount paid on a claim and the amount of coverage available.
• The subrecipient coordinates with property owners who must disclose all assistance received for the same purpose, as described above, including repair or replacement assistance received, all insurance benefits available to them under an existing policy (whether they submitted a claim), and any potential recovery of assistance based on litigation or other legal obligations. The property owner must take reasonable steps to recover such amounts. The subrecipient must coordinate with tenants who must disclose any amounts received from rental or relocation assistance.
• When a property owner receives a Small Business Administration loan for repairs, the property owner must provide proof that loan funds were spent as intended so that they are not deducted as a duplication of benefits. In accordance with Small Business Administration requirements, loans must be repaid at the acquisition closing or rolled over to the new property. When a property owner receives Small Business Administration loan funds to complete a mitigation activity, HMA funds cannot duplicate the purpose covered by the loan, nor can they be used in the form of a grant for loan “swap” or to pay down a Small Business Administration loan.
• The subrecipient identifies any other potential sources of benefits to the subrecipient, property owner or tenant.
• The subrecipient must reduce the purchase offer by the amount of any duplication of benefits. Deductions are not taken for any amounts the owner can verify with receipts that were expended on repairs or cleanup. Subrecipients may not credit property owners for their own labor hours for repair work.
• For insurance payments made for which the purpose is unspecified, property owners may submit an affidavit stating that the unspecified settlement will be used for personal property replacement or documentation from the insurance company specifying the type of losses covered by the previously unspecified settlement. If the property owner submits an affidavit, upon receipt of the affidavit, the recipient and subrecipient will treat the payment as a personal property settlement that is not subject to a duplication of benefits deduction.

If the purchase offer for a property is less than the amount the property owner must pay to purchase a comparable replacement dwelling in a non-hazard-prone site in the same community, the recipient and subrecipient may choose to make available to the property owner a supplemental payment of up to $31,000 that would be applied to the difference. Subrecipients should consider the cost of relocating to a permanent residence that is of comparable value and is functionally equivalent.

For the property owner to receive a supplemental payment, the recipient and subrecipient must demonstrate that the following circumstances exist:

• Assistance cannot be secured from other more appropriate sources, such as housing agencies or voluntary groups.
• Decent, safe and sanitary housing of comparable size and capacity is not available in non-hazard-prone sites within the community at the anticipated acquisition price of the property being vacated.
• The project otherwise would have a disproportionately high adverse effect on low-income or minority populations because project participants in these populations would not be able to secure comparable decent, safe and sanitary housing.^[408]
• Participants have certified that they are nationals of the United States or qualified aliens.

The recipient has the option of allowing subrecipients to provide a credit to property owners who have flood insurance. The subrecipient provides an incentive payment that is equal to up to five years of flood insurance premiums actually paid by the current property owner for an NFIP policy for structure coverage. This is applicable to all programs.

Although the property owner must voluntarily agree to participate in an open space project, participation is not voluntary for residential and business tenants and owners of mobile homes who rent homepads (homepad tenants) and who must relocate because of the acquisition of their housing. Therefore, these tenants are entitled to assistance as required by the URA, as amended.^[409] Property owners participating in FEMA-assisted property acquisition and structure demolition or relocation projects are not entitled to relocation benefits because the voluntary program meets URA exceptions.

URA regulations define “tenant” as a person who has the temporary use and occupancy of real property that is owned by another. URA relocation benefits to displaced tenants include moving expenses, replacement housing rental payments and relocation assistance advisory services. Displaced tenants include owners of manufactured homes who lease a pad site. The amount of assistance the subrecipient must pay the tenant is provided in 49 CFR Part 24, Subpart E. An eligible displaced tenant is entitled to:

• Reasonable out-of-pocket (or fixed schedule) moving expenses.
• Compensation for a reasonable increase in rent and utility costs incurred in connection with the relocation in certain circumstances.
• Relocation assistance payments for tenants are intended to ensure these individuals can relocate to decent, safe and sanitary comparable replacement dwellings outside the floodplain or hazard area.

If a tenant chooses to purchase a replacement dwelling, the tenant may apply the amount of rental assistance they would be entitled to toward the down payment. Similarly, if a mobile homeowner who rents a homepad chooses to purchase a replacement pad or lot, the mobile homeowner may apply the amount of rental assistance they would be entitled to toward the down payment.

An alien who is not lawfully present in the U.S. is not eligible to receive URA relocation benefits or relocation advisory services. FEMA may approve exceptions if this results in unusual hardship to the alien’s spouse, parent or child who is a U.S. citizen, or an alien admitted for permanent residence. Subrecipients will ask tenants who are potential recipients of URA assistance to certify that they are U.S. citizens or are lawfully present in the U.S. Subrecipients will not provide URA assistance to participants who are not or who refuse to certify that they are U.S. citizens or lawfully present.

Additional instructions for implementing URA requirements can be found in 49 CFR Part 24. Subrecipients must coordinate closely with the recipient and FEMA when implementing URA requirements. The state Department of Transportation (DOT) is often a good resource in determining how to calculate the appropriate URA payment because the Federal Highway Administration is the lead federal agency for the URA.

A tenant displaced from a dwelling because of a federally-assisted property acquisition and structure demolition or relocation project is entitled to a rental increase payment if:

• The tenant rents or purchases and occupies a decent, safe and sanitary replacement dwelling within one year after the date the tenant moves out of the original dwelling.
• The tenant occupied the displacement dwelling for the 90 calendar days preceding the initiation of negotiations for acquisition of the property.

The initiation of negotiations is defined as the first formal indication that the subrecipient wants to purchase a particular property. Any tenant who occupied the dwelling before a disaster event is usually eligible. The exception is if the project negotiations are unrelated to the disaster event or begin so long after the event that it is no longer a relevant factor. If the dwelling is reinhabited after the event, former tenants are generally not eligible. A signed lease is preferable for proving tenancy, but other documentation such as utility bills may be used to prove tenancy if a signed lease is not available because of the disaster event.

Compensation for a rent increase is 42 times the amount that is obtained by subtracting the “base monthly rent” for the displacement dwelling from the monthly rent and average monthly cost of utilities for a comparable replacement dwelling, or the decent, safe and sanitary replacement dwelling now occupied by the displaced person.

The “base monthly rent” for the displacement dwelling is the lesser of the average monthly cost for utilities plus the rent at the displacement dwelling as determined by FEMA, or 30% of the tenant’s average gross household income. The rental increase payment may not exceed a total of $7,200. ^[410]

Subrecipients may exceed the limits identified in the URA in extraordinary circumstances if necessary to ensure a displaced tenant will be able to obtain and retain a comparable unit that is decent, safe and sanitary (as defined at 49 CFR § 24.2(a)(8)) outside a high-hazard area. A rental assistance payment may, at the subrecipient’s discretion, be disbursed in a lump sum or installments. If any Department of Housing and Urban Development programs are providing partial assistance for the project, the subrecipient must verify the program requirements to ensure proper coordination with mitigation program requirements.

Mobile homeowners who lease a homepad and who must relocate to a new homepad because of the acquisition of their pre-disaster homepad are entitled to URA relocation benefits and/or replacement housing payments. Payments to mobile homeowners may not duplicate insurance payments or payments made by other federal, state, local or voluntary agencies. Complex situations involving FEMA mobile homes that have been donated to a state or local government and then sold to the mobile homeowner should be directed to the appropriate FEMA regional office for eligibility determination and calculation of benefits.

Displaced mobile homeowners who rent their homepads are entitled to assistance as described below. In some cases, the combination of the two types of URA assistance may exceed URA’s statutory maximum replacement housing differential of $31,000.

The displaced mobile homeowner/homepad tenant is entitled to compensation for rental and utility increases resulting from renting a comparable homepad and moving expenses as described in this section. Compensation for homepad rent increase is 42 times the amount obtained by subtracting the “base monthly rent” for the displacement homepad from the monthly rent and the average monthly cost of utilities for a comparable replacement homepad. The rental increase payment may not exceed a total of $7,200.

Displaced mobile homeowners may also be entitled to replacement housing assistance. For URA purposes, the mobile homeowner is considered to be involuntarily displaced from the residence because of the homepad owner selling the property. In addition, if the mobile home is also purchased, the displaced mobile homeowner is entitled to replacement housing assistance to compensate for their need to find replacement housing. Compensation for mobile home replacement is equivalent to the amount obtained by subtracting the value of the purchased mobile home from the cost of a new replacement mobile home. In some cases, it may not be possible to secure a comparably located site for a replaced/displaced mobile home; thus, the site on which the home is ultimately placed is called “last resort housing.” The cost to find and/or obtain such a site may exceed the statutory maximum differential replacement housing payment of $31,000. Last resort housing cases can result when the subapplicant has not adequately planned for the relocation of mobile homepad tenants. If a comparable location for a replacement mobile home cannot be found, the homepad tenant may be eligible for replacement housing payments up to the cost of a traditionally constructed home that is comparably located

Subapplicants seeking assistance for mobile home park acquisitions must demonstrate capacity to administer the subaward within the project budget. To demonstrate capacity, the subapplication should include:

• An estimate of the number of mobile homes that will be involuntarily displaced.
• Identification of in-house URA expertise or an estimate of the cost of obtaining URA expertise shown as a line item in the project budget.
• A preliminary relocation analysis discussing whether an adequate stock of potential replacement sites and/or dwellings is available.

Tenant businesses that are involuntarily relocated because of a FEMA-assisted property acquisition and structure demolition or relocation project are entitled to URA benefits. Assistance provided to a tenant business cannot duplicate payments from insurance or any other source. Thus, Small Business Administration loans and other types of financial assistance received after the disaster must be subtracted from benefits received under the URA. The recipient and subrecipient should seek assistance from the appropriate FEMA regional office in determining benefits for tenant businesses. The state Department of Transportation can be a good resource for determining benefits for tenants because the Federal Highway Administration oversees the applicability of the URA.

Because properties acquired under HMA programs must be permanently converted to open space and will be unavailable for future development, subapplicants must coordinate with the appropriate federal agency or agencies in accordance with 44 CFR § 80.13 to ensure other federal actions that would affect the parcels under consideration for acquisition for open space are not anticipated.

If other federal activities are planned in the proposed project area, the subapplicant will need to forgo an open space acquisition project and pursue other mitigation project options. If the subapplicant decides to proceed with the acquisition project, the subapplicant must include documentation of their coordination under this section in the subapplication.

Consultation with state DOTs, the U.S. Army Corps of Engineers (USACE) and other federal agencies is discussed below.

The allowed uses of open space that have been created as a result of an acquisition project generally do not include levee systems for flood risk management purposes, and subapplicants will be required to reject consideration of such use if they accept FEMA assistance to convert a property to permanent open space.^[411] The subapplicant must demonstrate in the subapplication that they have consulted with USACE regarding each subject property’s potential future use for the construction of a levee system.^[412] FEMA will not award assistance for any property without this documentation. This restriction does not generally apply to structures for ecosystem preservation, restoration or enhancement.

If the initial consultation with USACE indicates that there is a potential consideration for a levee in the area, the subapplicant must undertake an expanded consultation with the applicant, FEMA and USACE. FEMA can help assist in this expanded coordination. The consultation will involve the identification and full consideration of future potential land-use conflicts to enable an informed decision regarding how best to proceed.

If, after the consultation, the decision is to pursue a FEMA-assisted property acquisition and structure demolition or relocation project, the subapplication must include an assurance, resolution or equivalent document adopted by the local governing body that indicates the following:

• In consultation with USACE, the local government has identified and considered the future potential use of acquired land for the construction of levees and has chosen to proceed with the acquisition of permanent open space.
• The local government understands that land acquired for open space purposes under the relevant mitigation program will be restricted in perpetuity to open space uses and will be unavailable for any use that is incompatible with the open space and floodplain purposes designated for the property. These incompatible uses include the construction of flood damage reduction levees, paved roads, and other development.

The subapplicant must demonstrate in the subapplication that they have coordinated with the relevant state Department of Transportation to ensure future plans do not contain any improvements or enhancements to federal aid systems or other state transportation projects that would affect the proposed project area under consideration.^[413] The construction of such transportation improvements, enhancements or projects on open space land is incompatible with open space uses and is not allowed.

The applicant and subapplicant must demonstrate in the application and subapplication, respectively, that they have consulted with other federal agencies, as appropriate, regarding other program requirements and/or activities and have identified the relationship between the requirements and activities to FEMA mitigation activities and assistance. Other federal agency requirements may apply to mitigation activities if other agency assistance is used for activities related to the project in the community or for matching the mitigation assistance, such as Community Development Block Grant assistance or Community Development Block Grant-Disaster Recovery assistance.

Other federal agency assistance may be used to contribute to the non-federal share of a FEMA-assisted mitigation project if both programs’ requirements are met. Refer to Part 4 for more information on federal assistance that is allowed to be used as a non-federal cost share. The applicant is responsible for coordinating with the programs that are available in the state. The coordination should include local program representatives and approaches and schedules. The objective should be to make the process as simple and consistent as possible for subapplicants and property owners.

For any proposed action that involves the acquisition of a structure for open space purposes that is within or attached to the CBRS, the FEMA regional administrator, as required by Section 6 of the Coastal Barrier Resources Act, consults with the designated representative of the Department of the Interior at the regional level before approving the action.

The request for consultation is in the form of a memorandum to the Interior Department representative that contains the following:

• Identification of the CBRS unit.
• Description of the structure and the property to be acquired and demolished or relocated, including the identification of the structure as an exception under Section 6 of the Coastal Barrier Resources Act^[414] and full justification of its status as an exception.
• Amount of proposed federal assistance.
• Any additional required mitigation measures.
• A determination of the action’s consistency with the purposes of the Coastal Barrier Resources Act, in accordance with 44 CFR § 206.349.

Pursuant to FEMA’s understanding with the Interior Department, the Interior Department representative provides technical information, an opinion on whether the proposed action meets the criteria for the Coastal Barrier Resources Act exception, and an opinion on whether the action is consistent with the purposes of the Coastal Barrier Resources Act if consistency is required. The Interior Department is expected to respond in a timely manner from the date of the FEMA request for consultation. If a timely written response is not received, the FEMA regional administrator will contact the Interior Department representative to determine whether the consultation request was received.

When the regional Interior Department representative’s opinion is that the proposed action should not be taken and the issue cannot be resolved at the regional level, the FEMA regional administrator submits the issue to the Director of the Office of Environmental Planning and Historic Preservation and the Federal Insurance and Mitigation Administration for review. Consultation is accomplished at FEMA headquarters with the Interior Department consultation officer, the Office of Environmental Planning and Historic Preservation, and the Federal Insurance and Mitigation Administration in coordination with the FEMA Office of Chief Counsel. The Director of the Office of Environmental Planning and Historic Preservation and the Federal Insurance and Mitigation Administration then approves or does not approve the proposed action.

Section 1231 of the Disaster Recovery Reform Act of 2018^[415] specifies that within 60 calendar days of the award, the recipient’s hazard mitigation officer or designated representative provides notification to each affected unit of local government with detailed information on the subrecipient’s approved acquisition projects. The notification must include the following:

• The location and address of the acquisition property.
• A description of the acquisition project (i.e., latitude/longitude coordinates to the nearest sixth decimal place, a legal description and other identifying characteristics).
• A copy of the model deed restrictions for acquired properties.
• The state/territory-local or state-tribal grant assistance agreement.

Existing buildings that are part of an open space acquisition and demolition or relocation project must be removed and disposed of in accordance with applicable laws within 90 calendar days of closing and settlement of the property acquisition transaction. The recipient and subrecipient are responsible for the removal and disposal.

Even if numerous properties are purchased on different dates, the recipient and subrecipient are still responsible for structure disposal or removal within 90 calendar days of settlement for each property. The FEMA regional administrator may grant an exception for multiple properties in a single project when the properties are individually identified, and the need for an exception is justified in accordance with the regulations.^[416] The recipient must submit a written request to the regional administrator stating the justification for additional time (that will extend beyond the 90-day time limit) for demolishing or relocating any structure, including a specific date for removal.

All relocated structures in open space acquisition and relocation projects must be placed on a site outside (1) an SFHA, (2) any regulatory erosion zones at a distance at least 60 times the average annual erosion rate measured from an appropriate “erosion reference feature,” and (3) any other identified hazard areas. The owner is responsible for ensuring the building is brought into compliance with all applicable laws and regulations.

Existing buildings that are part of an open space acquisition and demolition project must be demolished (resulting in the permanent destruction of each structure) and disposed of in accordance with applicable laws.

After a disaster, the demolition and debris removal of acquired structures may be eligible for reimbursement under the FEMA Public Assistance (PA) program if the structures represent a health and safety hazard because of the disaster. States/recipients and subrecipients should coordinate with the appropriate FEMA regional office to determine whether these costs are eligible under the PA program. If the demolition costs do not qualify for PA program assistance, they are eligible project costs under the relevant mitigation program if submitted as part of a project subapplication. If any parts of the structure are sold for salvage value, the total cost of the project will be reduced by the salvage value before cost shares are calculated.

Recipients are required to report deviations from budget, project scope or objectives in accordance with Part 8. Recipients must request prior approvals from FEMA for budget and program plan revisions.^[417]

Recipient and subrecipients must closeout projects in a timely manner consistent with Part 9.

At the completion of the award/subaward activity, FEMA and the recipient shall verify that all required subaward activities have been accomplished in accordance with all program guidance and proper grants management practices and 44 CFR § 80.21, that all properties identified in the subapplication have been acquired, and that the Model Deed Restriction language was recorded with each corresponding deed.

The subrecipient shall provide to FEMA, through the recipient, the following property information:

• Photograph(s) of the property site after project was completed.
• A copy of the recorded deed that includes FEMA Model Deed Restriction language for each property.
• Latitude and longitude of each property given to the nearest sixth decimal place.
• A signed Statement of Voluntary Participation from the owner(s) of each property identified in the subaward scope of work.
• Description of how pre-event market value was determined, if applicable.
• Documentation of duplication of benefits review.
• Date structure was removed from property (this must be 90 calendar days from date of settlement).
• Update of the property site information in the respective HMA electronic system database for each structure, noting if the property was mitigated, the closing date, and the amount paid to the homeowner(s).
• For relocation projects, a certificate of occupancy from the local government agency or building department for each relocated structure to certify that the structure is code compliant.
• For FMA only, documentation that the property owner-maintained flood insurance until the property was sold.

The recipient will work with subrecipients to ensure the property is maintained in accordance with land-use restrictions. The recipient and subrecipients must jointly monitor and inspect acquired properties every three years, based on the recipient’s three-year reporting cycle, to ensure the inspected parcels continue to be used for allowable open space purposes. Subrecipients cannot include long-term monitoring costs in their project application. Costs outside the period of performance are not eligible.

Every three years, the subrecipient, the recipient and FEMA must coordinate to ensure the subrecipient submits documentation to the appropriate FEMA regional administrator certifying that the subrecipient has inspected the subject property within the month preceding the report and that the property continues to be maintained consistent with the provisions of the award/subaward. If the property subsequently transfers to an allowable transferee, the subrecipient, the recipient and FEMA will coordinate with that entity to submit the information.

The recipient, subrecipient and FEMA have the right to enter the parcel, with notice, to inspect the property to ensure compliance with land-use restrictions. Subrecipients may identify the open space nature of the property on local tax maps to assist with monitoring.

Once the land is acquired and designated as open space, FEMA must review the subrecipient’s proposed change in land use, unless the changed use is grading and seeding of the original building site.

Uses that require review include but are not limited to:

• Establishing an encumbrance or easement (such as a utility easement or mineral rights lease).^[418] FEMA may approve requests for post-acquisition use that will encumber previously acquired properties with leases or other instruments allowing for subsurface hydraulic fracturing and horizontal directional drilling activities. However, surface activities and related appurtenances, equipment and/or wastewater disposal associated with hydraulic fracturing are not uses compatible with open space and are not allowed on the acquired parcel.
• Building any kind of structure or other development on the site (e.g., grading outside the building footprint, dredging, mining, filling, paving, excavation or removal of vegetation, and planting). ^[419]
• Storing equipment and materials.

As part of the subrecipient’s proposed change in land use, the subrecipient must submit a written request to the recipient for review. The recipient must review the request to verify the land use follows all open space requirements and should coordinate with the subrecipient to ensure all necessary information is provided. The recipient must forward the request to FEMA for review together with a recommendation whether the recipient considers the land use is allowable. FEMA will review the information submitted and verify program requirements have been met. FEMA will review the request and notify the recipient of their determination.

Land uses that are generally not allowable include:

• Surface activities associated with hydraulic fracturing that obstruct the floodplain and/or impact flood risk, which include but are not limited to the well bore mouth, well head, well pad, drilling site, storage facility, transport equipment and wastewater disposal such as injection wells, evaporation ponds and discharge into surface water.
• Walled buildings or manufactured homes, except public restrooms (reuse of pre-existing structures is not allowed unless all walls are removed).
• Installation of septic systems or reuse of pre-existing septic systems except to service a permissible restroom.
• Fences and all other obstructions in the floodway; fences outside the floodway must be designed to minimize trapping debris.
• Flood risk reduction structures, such as levees, dikes or floodwalls.
• Paved roads, highways, bridges and paved parking areas that include asphalt, concrete, oil-treated soil or other material that inhibits floodplain functions.
• Storage of inventory supporting a commercial operation or governmental facility, including wheeled vehicles or movable equipment.
• Cemeteries, landfills, storage of any hazardous or toxic materials, or other uses that are considered environmentally contaminating, dangerous or a safety hazard.
• Actions that pose health, safety or environmental risk in the floodplain.
• Aboveground or underground pumping stations or storage tanks.
• Placement of fill materials except where necessary to avoid affecting on-site archaeological resources.
• Other uses that obstruct the natural and beneficial use of the floodplain.
• Long-term human habitation.

For projects in CBRS units, the following land uses of acquired open space are generally not allowed:

• Any use FEMA determines is inconsistent with the allowable land uses identified above.
• Any uses determined by the recipient and/or FEMA as inconsistent with the regulations, the HMA Guide or deed restrictions.
• Paved surfaces.

Communities may creatively salvage pre-existing structures on the acquired property. In some cases, the complete demolition of a structure may not be necessary—converting a closed-in structure with walls, such as a house, into an open picnic pavilion with a concrete slab floor and posts supporting the roof is possible.

For post-federal award, the subrecipient may transfer a property interest only with the prior approval of the appropriate FEMA regional administrator and only to certain entities in accordance with 44 CFR § 80.19(b) and the HMA Guide.

After acquiring the property interest, the subrecipient, including successors in interest, may convey any interest in the property only if the appropriate FEMA regional administrator, through the recipient, gives prior written approval of the transferee. The transferee must be another public entity or a qualified conservation organization. Property transfer to private citizens and corporations will not be approved. A qualified conservation organization is an organization whose purpose has been conservation for at least two years before the opening of the application period that resulted in the transfer of the property interest to the subrecipient, pursuant to Section 170(h)(3) and (4) of the Internal Revenue Code of 1954,^[420] and the applicable implementing regulations. The transferee must document its status as a qualified conservation organization where applicable.

Any request to convey an interest in the property must include a signed statement that contains documentation of the following:

• The proposed transferee acknowledges and agrees to be bound by the terms of the original mitigation award/subaward conveyance according to 44 CFR Part 80 and the HMA Guide.
• Reference and incorporation of the original deed restrictions providing notice of the conditions in this section.
• Incorporation of a provision for the property interest to revert to the subrecipient or recipient in the event the transferee ceases to exist or loses its eligible status as defined under this section.^[421]

The subrecipient may convey an easement or lease to a private individual or entity for purposes that are compatible with the uses described in 44 CFR § 80.19 and the HMA Guide with prior approval of the appropriate FEMA regional administrator and as long as the conveyance does not include authority to control and enforce the terms and conditions identified above. The FEMA regional administrator may choose to consult with the FEMA Office of Chief Counsel in reviewing documents proposed to convey an interest in the property. Any lease or easement must be for uses that are compatible with open space purposes and is clearly subject to the land use and other restrictions of the property by reference and/or incorporation of the recorded deed restriction language.