CDD fees, or Community Development District fees, are common in Florida's many planned communities. They are special assessments levied on homeowners within a CDD to pay for the ongoing maintenance and operation of infrastructure and amenities built within the community. Understanding these fees is crucial for anyone considering buying a home in a Florida community with a CDD.
What exactly does a Community Development District (CDD) do?
A CDD is a special taxing district created by the state of Florida. Unlike a typical homeowners association (HOA), which typically handles smaller-scale community maintenance like landscaping and common area upkeep, a CDD manages larger-scale infrastructure and amenities. This can include:
- Roads and Bridges: Construction, maintenance, and repair of roads, bridges, and other transportation infrastructure within the community.
- Water and Sewer Systems: Building, maintaining, and operating the water and sewer systems serving the CDD.
- Recreation Facilities: Construction and maintenance of parks, recreation centers, swimming pools, and other recreational amenities.
- Stormwater Management: Implementing and maintaining systems for managing stormwater runoff.
- Landscaping: Maintaining larger-scale landscaping projects within the community.
Essentially, a CDD takes on the responsibility of developing and maintaining the large-scale infrastructure necessary for a planned community to function, freeing up the HOA to focus on smaller-scale community matters.
How are CDD fees different from HOA fees?
While both CDD and HOA fees are recurring costs for homeowners, they serve different purposes:
- CDD fees: Cover the maintenance and operation of major infrastructure and amenities, often covering a broader area than an HOA. These fees are typically paid annually and are usually higher than HOA fees. CDD fees are often paid through an independent CDD board, separate from the HOA board.
- HOA fees: Cover the maintenance of smaller-scale community features like landscaping, common areas, and clubhouse upkeep. HOA fees can be monthly or annual and are typically used for smaller-scale projects. The HOA is generally responsible for the aesthetics and upkeep of the smaller details within the community.
Are CDD fees included in the mortgage payment?
No, CDD fees are separate from your mortgage payment and are usually billed annually as a separate tax. This is crucial to remember when budgeting for a home purchase in a community with a CDD. You’ll receive a separate bill for your CDD assessment, in addition to your mortgage and property taxes.
How are CDD fees determined?
CDD fees are determined by the CDD board based on a budget that covers the costs of maintaining and operating the community's infrastructure and amenities. The budget is typically reviewed and approved annually. The fee is generally based on the assessed value of your property, meaning larger homes may have higher fees.
What happens if CDD fees aren't paid?
Failure to pay CDD fees can result in liens being placed on your property, impacting your ability to sell or refinance your home. Similar to property taxes, non-payment can lead to serious financial consequences. It's crucial to stay informed about the fee schedule and payment deadlines.
How long do I have to pay CDD fees?
The length of time you're responsible for CDD fees depends on the terms of your specific community. However, in most cases, you will continue to pay them as long as you own the property. The fees may change annually based on the budget and the CDD's financial needs.
Can I find out about CDD fees before buying a home?
Absolutely! The CDD's financial documents and fee schedules should be readily available. Your real estate agent should be able to provide you with this information during your property search. It is highly advisable to thoroughly review these documents before making an offer to purchase a home within a CDD.
This information should provide a comprehensive understanding of CDD fees in Florida. Remember to always thoroughly research the specific CDD governing your prospective community. Consult with your real estate agent or a legal professional if you have further questions or concerns.
