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Location: Sarasota/ Bradenton - University Pkwy area
4,615 posts, read 7,537,235 times
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CDD stands for Community Development District. If the box is marked Y for yes, it means the property is located within a Community Development District.
A CDD is a local, special purpose government entity authorized by FL Statutes (Chapter 190) and is an alternative method for managing and financing infrastructure of a community. Many of the larger planned communities such as Lakewood Ranch, Heritage Harbour and University Place have CDDs to maintain the quality and impeccable standards of the many community amenities.
As a potential buyer, CDD's levy taxes or assessments on the properties within the district to maintain those infrastructures. CDD fees vary widely from community to community and even within communities. So if you see that box marked yes, you'll want to ask what the annual CDD taxes are on the property if you're interested in it.
There are developments like that in TX for retail and residential--and some of them have pretty high tax assessment to compensate for the tax rebates given to the developers by the city--
and in general then a CDD residential area probably has more (rather than fewer) deed restrictions and strong HOA
The CDD fees are different for each community and not all communities have a CDD fee. Some will include the fee in the annual taxes, others are monthly or quarterly, and some are a one-time CDD fee. The CDD fees could be used to pay for roads, utilities, and other amenities such as a clubhouse, pool, tennis courts, golf course, etc. Some communities will have the CDD fee on top of the HOA fee. The CDD fees are an assessment that is usually set up in the development stages of the community when it is being built but can also be added later if new items are added to the community such as landscaping, revamping of a golf course, or gates.
It seems that even R.E. Agents don't know why, who, how a CDD is formed.
An individual, a group, a corporation gets a controlling interest in a huge tract of land. But they don't have the finances or can't get additional finances to develop or finish the project/tract of land. All large tracts of land must now adhere to a 'planned community' concept with infrastucture, roads, water, sewer, etc. No more North Port, Cape Coral kind of areas.
The state did these people a favor by setting up a means whereby they can get bonds to finance the project. The land developer keeps control over all common areas, entries, roads, recreation areas. The individual home buyer thinks they're getting fairly priced home. They pay their own mortgage, insurance AND a HOA fee for their separate sub-division. BUT they also pay the mortgage for the developer [in form of bonds] for the whole project for 20 years. The developer sets up a separate corporation to collect the fees, maintain the bonds and gets a maintenence fee but gets the county to collect the yearly non ad valorem fees for them. [unlike the HOA that hopes you send a check to the HOA every month] The yearly CDD fee is around $1500-$2000 a year [those figures can change if the developer decides in 10 years that the main entry road needs re-paving, etc.] They also create their own 'general area landscape/road maintenence' company. This is also part of the yearly CDD fee. There are planned communities but not formed as a CDD. An example would be Heron Creek in North Port that requires an additional 'master development' fee. [I think it's currently $800 a year.] In Kings Gate on Kings Hwy/Port Charlotte, they require a $500 capital improvement fee when you purchase.
But at least people purchasing homes in these communities are aware of [or should be] the additional fees they will be paying, unlike people who buy a home in an older neighborhood that's on well/septic and the R.E. agent neglected to inform the buyer that they would have to be installing county mandated water/sewer next year for a cost of $8500
The current CDD's in Sarasota County are-
Bobcat Trail
Lakeside Plantation
Venetian
The Woodlands
Stoneybrook
Sarasota National
In Manatee County- Lakewood Ranch
In Charlotte County- Riverwood, Heritage Oaks
Also as a warning- Do not trust the amount as shown for ' monthly HOA fee' as being correct on listings.
Location: Sarasota/ Bradenton - University Pkwy area
4,615 posts, read 7,537,235 times
Reputation: 6036
Actually, most of us real estate agents know what CDDs are and understand the basics of how these districts function.
The question becomes how much information was the original poster really looking for in her post? The actual FL statutes governing CDDs runs pages and pages.
The primary function of a CDD is to construct and maintain infrastructure for a planned community development (PUD). This infrastructure may include roads, sidewalks, street lights, parks, recreational facilities, jogging trails, stormwater management, water mains, sewer lines, roadside landscaping and other such items.
By state statute and under strict guidelines, these CDDs have the right to enter into contracts, can adopt by-laws and rules, can obtain funds by borrowing, can issue bonds and levy assessments, can own property and can sue and be sued. CDDs are subject to the same laws and regulations that apply to other government entities. The CDD can borrow money at the same lower, tax-exempt interest rates that cities and counties have access to. Many of the maintenance contracts of the CDD are negotiated on an annual basis and subject to publicly advertised competitive bidding.
As I stated previously, these special districts are used to create and maintain communities at a higher level of amenities within the district than are typically found within the county. Anyone who has driven through Lakewood Ranch, Heritage Harbour or any of the other CDDs within Manatee or Sarasota county will quickly understand the difference between one of these communities and a typical non CDD neighborhood.
30 year bonds are typically issued at start of construction. The operations and maintenance costs can vary year to year as prices for ongoing maintenance fluctuate.
A CDD is governed by its board of supervisors, which is elected initially by the landowners/developers, then begins transitioning to residents of the CDD after six years of operation. The residential board of supervisors are elected. All board members are subject to state ethics and financial disclosure laws, including sunshine laws.
For example, in Lakewood Ranch, the various CDD districts (I think there are 6) are each governed by a board of supervisors elected by the district's registered voters. They hold monthly meetings that are open to the residents of the district. Public hearings are held before the annual budget can be adopted. The annual fee for a property is determined by combining the fixed amount of debt service still owed on that lot (from bond issuance) with the variable amount set by the budget for operations & maintenance. The CDD assessment for the year appears on the property tax bill in the non ad-valorem section. I've seen CDDs as low as $640 per year on condos and over $4000 per year on estate homes in Lakewood Ranch, although most seem to run in the $1600 to $1900 per year range.
In Heritage Harbour's south CDD district, the board of supervisors consists of 3 elected homeowners and 2 Lennar representatives as Lennar is still building new construction within the community.
Some of the other Manatee county communities with CDDs are Waterlefe, Tara phase II, Harrison Ranch, Copperstone and University Place.
I sense some animosity towards real estate agents. Both the FAR and FAR-BAR purchase contracts that we agents use have addendums for mandatory HOAs that include spaces for home sellers to inform the buyers of special assessment such as CDDs. The seller property disclosure forms that sellers are required to complete as part of the listing process to be shared with buyers before they sign an offer also include specific questions regarding homeowner associations and CDDs. Our local Sarasota Board of Realtors provides a specific Community Development District Addendum for use by agents. Our regional MLS service has mandatory requirements for disclosure when a CDD exists and the current annual cost of that CDD for the listed property. This information shows up not only on the realtor version of the MLS reports but also the customer synopsis version of the MLS reports. CDD's are disclosed to buyers before the purchase.
As to the comment about septic tanks, in Sarasota county when the property has a septic tank and therefore may be part of the county septic tank replacement program, our Sarasota Association of Realtors has a septic tank program addendum to be added to the purchase contract. This addendum gives the buyers a specific timeline in which they should make any and all inquiries as to whether the property in question will be required to hook up the the sewer system. It also gives the buyer the right to terminate the contract by giving written notice before the deadline if the inquiry results are unsatisfactory to the buyers. Sellers are also required to disclose all known facts that materially affect the value of a property being sold that are not readily observable. If a homeowner is required by the county to hook up to the sewer system, they would have received notice from the county and the seller should disclose the information on the Seller's Property Disclosure Statement form they complete when listing their property with a Realtor. The county septic tank replacement program website has all of the information, including time lines for septic tank replacements, areas involved, costs, etc: PCS: HOME
Every basket has a few bad apples and real estate agents are no exception. Most of us, however, provide quality service to our customers because we are not just looking for a quick commission check, we are striving to build a long-term business that includes referrals in the future from satisfied buyers and/or sellers.
thanks--
I was just asking for the meaning--
I get the fact that it is a special taxing entity and like in TX there are +/- associated with any entity like that===
some people who bought condos in downtown FTW in area that was designated as a special tax entity (we have different name for it but can't remember now) are paying twice the tax of same size home in other areas of town because the resurgence of the downtown area has caused higher assessments on property--so their normal city tax is higher plus they are paying the extra assessment for the special district--
basically that is how the city recoups any monies it failed to levy against the developer and the developer used that legal move to pass along his costs (to certain extent) that were not packed in the sales price of the condos...
Many people who bought there did not know about the special tax assessment and I think they would not have bought if they had known that tax rate would continue for long time--say at least 10 years if not into perpetuity...
since this was a new area, the actual tax assessment/rate was not known at the time the condos were sold (new property/developer paid on raw land pre-development) and people assumed that there was only the standard taxes--city/county/school/hospital that most city properties pay...
I know that is NOT smart--but sometimes when you are buying via the developer's sales office you don't always get the most accurate information -- legal or not, it can be couched in small print in forms that you sign--AGAIN I know that a prudent person should not be signing anything s/he does not understand--but it happens more times than not that no one is reading all the forms associated with buiying a home...and first time buyers usually can't afford to get a real estate attorney to check their docs...
Location: Sarasota/ Bradenton - University Pkwy area
4,615 posts, read 7,537,235 times
Reputation: 6036
Hi Loves2read,
It was interesting reading about the situation with the special taxing districts over in Texas. I know they've done something similar in parts of Illinois in the past 15 years too.
We actually have other types of special taxing districts in this area. I know a couple of subdivisions in Sarasota that wanted to add street lights where the county did not provide them, so the residents voted to create special lighting districts to pay for the street lights. The districts show up on the non ad-valorem portion of the property tax bills.
I always print up a copy of the most recent tax bill for my buyers to review before they write up an offer on a property. Both Sarasota and Manatee county have all tax bills online, so anyone can pull up the tax bill for a property.
By the way, the 2011 TRIM notices are now available on line for all properties in both counties at the property appraiser's web sites. These truth in millage notices show the property's assessed value as of January 1, 2011. They also show who the various taxing districts are and the proposed taxes for 2011.
We have neighborhoods make special assessments according to what their bylaws allow but don't think they spill over into something like a bond issue or increased tax rate
Usually the homeowners have to pony up in their HOA dues since it is usually done inside the HOA. If it is a city street a neighborhood would just probably lobby the city council until the city agreed to either pay for the lights. I don't think I have ever seen a bond election held solely for a neighborhood issue when it was an older established neighborhood. And here the city or county will sometimes have to push out a bond election to cover the cost that will be incurred when special districts receive tax abatements.
Something like that happened in Arlington TX when Jerry Jones got the city of Arlington to help defray the cost of bldg new Cowboy stadium
And I understand that is one reason one of the MLB or NFL towns is close to bankruptcy----because the city went into debt with bad contract to cover cost of new stadium.
Not clear on which one--- just read part of story online so my take may not be accurate.
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