When a Renovation Triggers a Full Code Upgrade
Many owners look at older buildings as value-add opportunities. They plan to refresh finishes, update systems, and reposition the space. But once plans are submitted, they find out the project now requires full compliance with current code.
That’s the result of Florida’s substantial improvement rule.
What Triggers It?
Under the Florida Building Code, if the cost of improvements equals or exceeds 50 percent of the building’s fair market value within a rolling 12-month period, the entire structure must be brought up to current code.
This includes:
ADA upgrades
Energy code compliance
Life safety systems
Structural corrections
Parking ratios and site improvements
Elevation requirements in flood zones
Even if only one portion of the building is being improved, the rule applies to the entire structure.
Market Value vs. Assessed Value
The 50 percent threshold is based on the fair market value of the structure, excluding land. However, jurisdictions often default to the county-assessed value unless an independent appraisal is provided and accepted in advance.
This can catch owners off guard. If the building is worth $1.2 million but assessed at $800,000, your improvement ceiling drops by $200,000 unless you proactively submit a proper valuation.
What Counts Toward the Threshold?
Everything tied to permitted construction:
Labor and materials
Architectural and engineering fees
Permit costs and utilities
Site work directly associated with the improvement
Related scopes permitted within the same 12-month period
Cosmetic updates and tenant furniture are typically excluded, but the cumulative effect of phased work often triggers the rule unintentionally.
Strategies to Stay Under or Comply Wisely
Our role is to help owners avoid surprises. That includes:
Modeling improvement costs against known valuation
Coordinating independent appraisals when needed
Sequencing scopes to fall outside aggregation windows
Adjusting scope to avoid triggering compliance
Preparing clients for what full compliance entails when it is the better path
We work upstream of design and permitting, where these decisions still have options.
Why It Matters
This rule can completely reshape your budget. Fire sprinklers, ADA compliance, energy modeling, and life safety upgrades are expensive — and not always anticipated. If you're working with old buildings and planning capital improvements, this needs to be evaluated before the first permit is pulled.
What We Do
Habershaw Development & Construction supports owners and developers through feasibility, budgeting, and early due diligence. For projects involving older assets, we specifically evaluate substantial improvement exposure and guide decision-making from there.
Whether the goal is to stay under or proceed through full compliance, we ensure the plan aligns with real constraints and clear expectations.
