CDD vs HOA - Must Read Before Buying a Home in Florida

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Communities with either CDD fees or HOA fees can be very attractive because of the amenities and the lifestyle that they offer; but it's very important to know the differences between the two. in this article I'll explain those differences and how they affect you, the buyer.
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If you've been looking to purchase a home in Florida, you've likely heard about HOA fees and CDD fees- but do you know what they are? Both can affect your monthly payment, and there may also be community restrictions in place. Let's start with CDD fees.

What is a CDD you ask? Well, CDD stands for Community Development District. It is essentially a government body that provides infrastructure like roads, utilities, and amenities to planned developments in a community. The developer is basically financing the development of that community through tax-free municipal bonds. These bonds are then repaid by the homeowners in that community. CDD fees will show up as an assessment on your tax bill each year and will be paid as part of your county taxes. They can also vary in both dollar amount, as well as term lenth. Fees can range from as low as 120 dollars to upwards of two thousand dollars annually. The term lengths are typically anywhere from 15 to 30 years. CDD fees are also tied to a property, so if a property is sold it's going to be the responsibility of the new homeowner until the end of the term length. The fees are a set amount. However, they can increase if a developer gets a new bond for a pool, a school, or anything else that is needed by the community.
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Now that you've got a good understanding about cdd fees, let's talk about HOA fees- or Home Owners Associations. HOA fees can vary greatly from community to community. The home owner's association could provide things like maintenance of common grounds, amenities, upkeep of the landscaping of your yard, or even offer cable and internet service. They can also place restrictions on your property. The main purpose of an HOA is to provide a unified feel to the community- keeping up the appearance, as well as the property values.

If the hoa is still under development it's likely still run by the developer. Once the community is 90% complete, it will be handed over to the residents of the community. The residents will then be able to vote on board members who will be in charge of the future of the HOA.
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If you live in a community with an HOA, you're going to be responsible for the HOA fee- which could either be billed monthly, quarterly, or annually. Depending on where you move in Florida, HOA fees can vary greatly. I've seen fees as low as $10 a month and fees as high as $2000 a month. These fees go towards things like maintaining common areas, operation and maintenance of community amenities (such as pools, gyms, and playgrounds), security (such as a gate or security guard), and much more. The HOA can also tell you what you can and what you can't do with your property. It is important for you to read and understand the covenants, conditions and restrictions of an HOA before you put an offer in to purchase a home.

Some HOA's may even fine the homeowner if they don't adhere to their rules. if these fines go unpaid, they could even get a lien placed on their property. One more important thing about HOA's is that the fees are subject to change. They will most likely go up at some point in time, and they are not likely to go down.

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