Building Allocations
In order to build a new construction home on a vacant lot, you must first obtain a building allocation in the Florida Keys. There are two ways to obtain a building allocation. The fastest and easiest way is to buy a Transferable Building Right. (T.B.R.) TBR’s are also called Transferable Development Rights. (T.D.R) The next method to obtain a building allocation is to go through Rogo. If you don’t know what Rogo is, read this post, which explains all about it.
Transferable Building Rights
Transferable Building Rights (TBR or TDR) are allocations that come from one site and go to another site. As an example, a property owner may have owned a duplex and decided to turn that property into a single family home. The owner of the property would now have an extra building right. The owner could use that right on another lot or sell it to someone else looking for an allocation for their own lot.
A Transferable Building Right must have a sending site and a receiving site. The site location must be similar and in the same area as the sending site. If you have a TBR that is in Key Largo, the receiving site cannot be on Big Pine Key.
The transfer of an allocation is not free. There is a fee. Currently, in the City Of Marathon, the transfer fee is $40,000. In July of 2022, the City of Marathon changed the transfer fee from $20,000 to the $40,000 we see today. Talk about inflation, thats a 100 Percent Increase! Now in Monroe County, the transfer fee is only $1,240.00.
The cost of a TBR rate has increased a lot in the last 15 years. When I first started real estate the cost of a TBR was $20,000. Then it was $40,000, $60,000 and now it has jumped to $150,000 to $250,000 depending on the area. As we get closer and closer to the end of the building memorandum the cost of an allocation has gone up along with the scarcity of rights available.
There are all sorts of different rules on these transfers. For instance, in the Village of Islamorada, a waterfront TBR can only be transferred to a waterfront lot. In Monroe County, Transferable Building Rights can not be transferred to VE Flood Zones, nor can they be transferred to Tier 1 or Tier 2 lots. Your best bet is to check with the county or that municipality to make sure the TBR can be sent to the receiving site.
If you want to find out more about Transferable Building Rights, you can read a lot more details in the Municode. After you click the link, type in the topic you are searching for and you will find what you need.
Check out these Links to the Municode
