What is a CDD and how will it affect market value of a home?
A Community
Development District is a special purpose form of local government described as
an independent taxing district. This district exist under Florida Statue
Chapter 190 http://www.ccfj.net/FS190CDD.html . The district in my community is governed
by a board of 5 supervisors.
There is a
misconception that the Developer/Builder borrows money from the County in the
form of bonds to pay for amenities. The District (CDD) as a government entity,
issues municipal bonds on the lands within the boundaries of the district to
fund public infrastructure in the community such as roads, storm water systems,
drainage, Utilities etc. It does not normally cover amenities such as pools,
clubhouses, golf courses, tennis courts etc.
The CDD imposes a
special assessment against all land
owners whether it’s a developer, builder, or end user within the community.
The bond is usually paid over a 30 year period. So if you purchased a 5 year
old home in a neighborhood with a CDD you would inherit 25 years of CDD
payments. When the bond is paid off you may still have to pay a maintenance
fee. This is called an “Operation and Maintenance Assessment”. This lower payment
is for the day to day operations, management and maintenance of the CDD. This
is the second component and may be seen on your annual Real Property tax bill.
To see details of your
Lee County Florida tax history, or if a property has a CDD, go to www.
leetc.com Look at the top middle of the page where it says,” did you know you
can also” Click Search Real Property Records –That will bring you to this link.
You can search by Account
number, Personal ID#, Name or Address. I have good luck with address. Click on
Details, and then Tax Details then look under non ad valorem assessments. There
you will find the Name of the Community Development District and the annual
amount of the CDD. This may only show the total. If you want an Operation and Maintenance
Assessment breakdown, payoff date and amount or any other information, you can
contact the CDD’s name listed. If Google doesn’t work you can contact the Tax
Collectors office @ 239-533-6000 to get the phone number of the CDD.
Is a CDD different than an HOA? YES
A Homeowners
Association is a not for profit Corporation which is made up of members or
homeowners within a specific geographic boundary, and is considered private.
These HOA fees are charge separately and have nothing to do with the CDD.
Before you get down on
CDD’s, there should be many factors to consider.
1. When purchasing a home, the CDD should be
considered in your budget just as any other expense would. Include them with P&I, taxes &
insurance etc. This may be used as ammunition with your proposed offer.
2. Is the community with the CDD where you want
to live? Have location, demographics, infrastructure and amenities that fit
your lifestyle and you will use? Does the price of the home compare to
communities close by with no CDD?
3. Some home owners like the fact that the
above mentioned items in their community are for the people in that community
and not shared. For instance, if you live in a City, that City may add a pool
and recreation center across town that you will never use. Guess who helps pay
for it? Everyone in the City, they don’t have a choice. (I am not mocking City
living, I have friends that live in the City and love it, this is only an
example)This way you have the right to pick a community with the amenities for
you. I hope this makes sense.
To summarize, you may not want to disregard a community that has a CDD
if you can get the Location, amenities, utilities and home you want. Look at
the comparable sales and consider all the factors before you make an offer. So
does a CDD affect the market value of a home? A CDD payment is an expense that
has to be factored in with the homes price. So my humble opinion is yes.
Written by: David A. Foster Realtor, GRI, E-pro, www.davefoster1.realtor 239-246-5660
Some of the proceeding information
was extracted from CATALINA AT WINKLER PRESERVE COMMUNITY DEVELOPMENT DISTRICT GENERAL
INFORMATION PRESENTATION.
Furnished by Rizzetta &
Company, Inc.
8529 South Park Circle, Ste 330
Orlando, FL 32819
Special Thanks to Valerie Barreto
Senior Finance Associate for her professional assistance.