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House price/offer impact with Front Foot FEE.
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Thanks for responding to my threads.
I am in the home buying process i Maryland. As I reviewed the contract doc, a weird clause caught my eye. It states :
Quote:
The property is subject to fee or assessment charged under authority grated to developer pursuant to section 32-4-310 of the Baltimore County Maryland code. Which purports to cover or defray the cost of installing all or part of the public water or sewer facilities constructed by the developer of the sub division known as .... This fee or assessment is $500 - 900/year.
I did not see any dept in state or county as oversight to this Front Foot FEE.
It looks like much more than water consumption bill and throwing $ in drain. I did go after this property, because it did not have HOA. This item is surfacing now. The seller/agent did not provide any addendum related to this. It is bothering me.
I did google it and learned that it was called a Front Foot Fee being assessed to the buyer. Sometimes it is called a Front Foot Assessment (FFA) or Front Foot Benefit.
It looks like a lien on the property. There is no specific about duration and
buyback option etc.
What is the benefit for the owner, who buy this property and pays $500 - 900/year?
Are there ways to avoid/remove this lien hold on this property?
Does this Front Foot Assessment has impact on sale price/offer of the property?
If there is no Front Foot Assessment for a house, will it sell it for more $?
Yes, I have heard of this. I've seen them in Anne Arundel County. When the developer created the development, he passed on the cost of the sewage and/water (I've also seen gas) to the homeowners. The ones I've seen last for 30 years. I've seen them paid via escrow, included in property tax payments, or by separate bill. I've heard of them being billed monthly or annually
For example, if it cost $13,000 to run the public water to each house, that developer passed that cost on to the homebuyer. $13,000/30 years = $433/year.
What is the benefit for the owner, who buy this property and pays $500 - 900/year?
It's not a benefit unless you consider being stuck with paying the bill a "benefit". Normally, being connected to utilities is part of the purchase price.
Quote:
Originally Posted by GNCamry99
Does this Front Foot Assessment has impact on sale price/offer of the property?
To an informed and knowledgeable buyer, yes.
Quote:
Originally Posted by GNCamry99
If there is no Front Foot Assessment for a house, will it sell it for more $?
I hope something like this is disclosed somehow in the listing or before or at the time of the offer,
It should not just be disclosed, it should be highlighted. The exact amount per year should also be disclosed (not just a range) as well as the number of years the buyer will be stuck with the fee. This is just another scheme for developers to make more money.
It should not just be disclosed, it should be highlighted. The exact amount per year should also be disclosed (not just a range) as well as the number of years the buyer will be stuck with the fee. This is just another scheme for developers to make more money.
I agree it should be in black bold (and much larger font) like on Florida Property insurance papers that warn you of your deductible for hurricanes and you should be forced to initial it too.
Although I did get confused and think it was $500 to $900 a month when it's per year.
But yeah it's a way for the developer to keep more money, they are also lowering the cost of the home because if they had to add the say $15K to the home it would make it that much more expensive to buy.
They should really just add it to the price of the home and then maybe they would see to it that the costs were lower. When someone else foots the bill they don't care about the cost.
In parts of Cape Coral Florida that used to run on Well and Septic they are bringing in city utilities and charging property owners about $30K each. But the homeowner/buyer is charged which is how it should be.
This is something a buyer would owe. The lump sum is part of your credit history. But, as far as paying it off upfront to get rid of the 'bill'....suppose you don't live there very long and term payments look better.
It should not just be disclosed, it should be highlighted. The exact amount per year should also be disclosed (not just a range) as well as the number of years the buyer will be stuck with the fee. This is just another scheme for developers to make more money.
The developer probably isn't making a lot of money off of this,. It's a choice to spread the cost of infrastructure over a number of years/owners, since most people move after a few years. If the developer just added the cost to the price, the home prices would go up by the cost of the infrastructure, possibly discouraging buyers.
In the Houston area, outside of incorporated municipalities, this sort of cost is handled by a utility district that borrows to build the infrastructure, then charges a tax to recover the cost, perform maintenance, etc. That tax can be as high as 1.5% of the home value in the early days of a subdivision.
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