CDD fees? (appointed, for sale, HOA fees)

countrykaren · 05-28-2016, 01:29 PM

What are CDD fees? Never heard the term before- we live in NY and thinking of retiring in Fla. Can anyone explain this to me. Thanks.

BNBR · 05-28-2016, 01:42 PM

A CDD (Community Development District) is a different form of an HOA. Technically you could have an HOA and CDD, but you would most likely only pay fees for the CDD. As far as I know, CDD's always collect their fees through the property taxes. So if the house is in a CDD neighborhood, you may have no actual HOA fees, because you pay it through property taxes.

I live in a CDD, for what it's worth - and we still have an HOA, but no HOA fees directly. There is a lot of ins and outs, such as the roads are technically public, even if gated, and things like that.... but for all intents and purposes, I wouldn't think much of it.

The benefit, I think, is that the fees are collected via taxes so you are all but guaranteed everyone is paying their fees for the neighborhood. CDD's seem to be more stable in my experience. The HOA in my neighborhood was defunct, now they are just getting it back together, but the CDD/Property Manager still handled everything perfectly - I think he's hired through the city.

And since I'm sure I confused you, I'd suggest simply googling it for a more thorough comparison. But as I said, I wouldn't think much of it, as it's basically just a different form of HOA. And to ramble just a tad more.... your main difference between CDD and HOA is that the CDD will maintain the common grounds, streets, and operations of the development, but the CDD/property manager won't do any of the policing roles than an HOA would. So the CDD manager isn't going to tell your neighbor they have to clean their roof. Which is why you often have an HOA and CDD.

bbronston · 05-28-2016, 02:06 PM

I live in a CDD community so I'm obviously not anti-CDD but I certainly wouldn't suggest that someone needn't concern themselves with CDD fees. CDD fees can be less than a $1000 to a few thousand dollars a year. Either way, that is definitely worth taking into consideration.

The Florida legislature makes it possible for developers to develop tracts of land and pass the cost of development onto the eventual lot owners by way of a bond. Although a property owner has the option to pay off their share of the bond debt all at once, most people pay the debt in annual assessments, on their tax bill. The bond portion is only one part of the CDD expense. The other part of the bill, which also is paid through your annual tax bill, covers the operation and maintenance of the district. The district is a quasi-governmental arrangement with board members and staff that are responsible for operating and maintaining the district-owned property along roads and lakes, recreational areas, water management and supply, bridges, roads, culverts, etc. Different districts can operate differently but all have the power to make rules, make budgets and assessments, and affect the lives of the property owners living within the district. There are many benefits to having a CDD (or you will see it referred to as a Stewardship District in some places) and I'm sure, as BNBR mentioned, you can Google your fingers off researching the subject. Just understand that there's a price to be paid for the way some developments look, what they offer as amenities, etc., and in some cases the price comes from HOA fees, sometimes CDD fees, and sometimes Stewardship fees. Someone has to pay...

BNBR · 05-28-2016, 03:00 PM

Quote:

Originally Posted by bbronston

I live in a CDD community so I'm obviously not anti-CDD but I certainly wouldn't suggest that someone needn't concern themselves with CDD fees. CDD fees can be less than a $1000 to a few thousand dollars a year. Either way, that is definitely worth taking into consideration.

The Florida legislature makes it possible for developers to develop tracts of land and pass the cost of development onto the eventual lot owners by way of a bond. Although a property owner has the option to pay off their share of the bond debt all at once, most people pay the debt in annual assessments, on their tax bill. The bond portion is only one part of the CDD expense. The other part of the bill, which also is paid through your annual tax bill, covers the operation and maintenance of the district. The district is a quasi-governmental arrangement with board members and staff that are responsible for operating and maintaining the district-owned property along roads and lakes, recreational areas, water management and supply, bridges, roads, culverts, etc. Different districts can operate differently but all have the power to make rules, make budgets and assessments, and affect the lives of the property owners living within the district. There are many benefits to having a CDD (or you will see it referred to as a Stewardship District in some places) and I'm sure, as BNBR mentioned, you can Google your fingers off researching the subject. Just understand that there's a price to be paid for the way some developments look, what they offer as amenities, etc., and in some cases the price comes from HOA fees, sometimes CDD fees, and sometimes Stewardship fees. Someone has to pay...

The CDD fees cover the same things that HOA fees cover, generally speaking. So my point wasn't that you shouldn't be concerned with CDD fees, just that they most likely replace the HOA fees so for simplicity sake, it's not a "new" fee. That said, definitely have your realtor dig up all HOA/CDD information for a community you are looking at so you don't get any surprises.

As bbronston mentioned, part of the CDD is the bond portion. You can actually get this information about when the bond matures. So when the bond matures, your CDD fees will go down, since the bonds are paid. Your realtor can research and get this information for you, too.

expatCA · 05-28-2016, 05:57 PM

Quote:

Originally Posted by BNBR

The CDD fees cover the same things that HOA fees cover, generally speaking. So my point wasn't that you shouldn't be concerned with CDD fees, just that they most likely replace the HOA fees so for simplicity sake, it's not a "new" fee. That said, definitely have your realtor dig up all HOA/CDD information for a community you are looking at so you don't get any surprises.

As bbronston mentioned, part of the CDD is the bond portion. You can actually get this information about when the bond matures. So when the bond matures, your CDD fees will go down, since the bonds are paid. Your realtor can research and get this information for you, too.

Actually CDD's are more of a second property tax with a life in years attached. In the past a developer paid for all the roads, stop lights, drainage to the sewer, water lines, etc and divided it among the homes for sale. Now they spend the same money and use a Bond the new home owner pays, reducing the asking price a little and the out of pocket price to the developer. An HOA is for the community owned property which can include streets as well as the other amenities and never ends, just goes up.

d4g4m · 05-28-2016, 06:26 PM

A CDD is formed when there is a huge chunk of land and a developer doesn't have the cash to purchase it. You do. They get bond money [a mortgage for 20 years] The land is split into different kinds of communities, each of course having their own H.O.A. fees. The CDD payment is added to your property taxes to make sure they get payment. Most of the time, the H.O.A. fee is collected by the H.O.A. CDD amount can range between $1500 to $3000 a year. H.O.A can be $255 to $400 You are forced to connect to cable whether you want it or not.
It's a win-win for the developer. Not only do they develop land without their own money but they get to manage everything and take care of the bonds, paying themselves well for 20 years. They also get to form another corporation that gets exclusive rights to maintaining common areas which is different from your community common areas. A fee that is added in the CDD fee.

BNBR · 05-28-2016, 06:39 PM

Quote:

Originally Posted by expatCA

Actually CDD's are more of a second property tax with a life in years attached. In the past a developer paid for all the roads, stop lights, drainage to the sewer, water lines, etc and divided it among the homes for sale. Now they spend the same money and use a Bond the new home owner pays, reducing the asking price a little and the out of pocket price to the developer. An HOA is for the community owned property which can include streets as well as the other amenities and never ends, just goes up.

You are incorrect. Our CDD fee is collected via property taxes. I have $0 HOA fee (just property tax). The property manager was hired/appointed by the city. The HOA portion has been defunct, actually - and they are finally just getting that back up. The CDD/manager handles the common grounds, streets, even the security. CDD's are not just for the initial infrastructure and absolutely manage the ongoing maintenance. You can call the CDD and find out exactly which portion of your taxes is for bonds and which is for ongoing. Ours is posted right on the internet.

A (relatively small) portion of the tax is for the bonds, the rest is for the ongoing maintenance of the community. This community could continue without an HOA, and the common grounds and infrastructure would still continue on via the CDD. The only thing the CDD can't do is the policing - ie. cite people for a dirty roof, etc. However, I'm not sure if that's just our community or a limit to CDD's in general. But CDD's absolutely handle ongoing maintenance of the community.

bbronston · 05-28-2016, 06:41 PM

HOA and CDD...two entirely different things with different responsibilities and powers. The developer/land owner in a CDD has to begin turning control over to an elected Board of Supervisors within six years so the owners eventually have control, not the developer. Also, it is incorrect to state that fees start at $1500 and HOAs start at $255. Not sure where you got that info.

As I said, it's not a mystery. Just Google "CDD".

countrykaren · 05-29-2016, 07:04 AM

Let me get this right.
A development can have property taxes on a $165,000 house (for example) of $1500/ yr. (again as an example)

If that house is in a CDD development than my taxes would actually be between $3,000 to $4500/ yr until the bond is paid off?

If there are HOA fees (which are monthly) then I would have them also?

If this CDD bond was paid in full by the previous owner, then the taxes- in my example- would be the $1500?

Or if not paid in full by the previous owner, I would pay the higher taxes until paid? Then the taxes would drop to the $1500?

How long are these CDD bonds for? 20 yrs?

Sounds like just a scam for a developer who has no money, to get land to build houses, and then make LOTS of money from ppl buying those houses. Sounds like the local government is pro developer and anti homeowner- to squeeze out the working class in order to keep the wealthy in Florida.

lamigra001 · 05-29-2016, 09:09 AM

Pardon the intrusion but CDD's doesn't cancel itself out after the 20-30 year period. The bond portion does but not the Operating and Maintenance portion of the CDD which will continue afterwards and be applied with your yearly property taxes. Not a fan of it but sometimes it maintains the roads and infrastructure whereas the city/county does a poor job. Not much else can be said positive about it though.