What are CDD Fees and How Do They Affect Your Property?

If you’re in the real estate market, you may have heard of CDD fees. But what exactly are they and how do they affect your property? In this guide, we’ll explain everything you need to know about CDD fees, from their meaning to their implications for your property.

What are CDD Fees?

CDD stands for Community Development District. It is a special taxing district created by local government to finance infrastructure improvements such as roads, sidewalks, streetlights, water and sewer lines, parks, and other public amenities in a particular community.

To finance these improvements, CDDs issue municipal bonds, which are repaid over time by property owners within the district in the form of an annual assessment. The amount of the assessment varies based on the cost of the improvements and the size of the property.

How Do CDD Fees Affect Your Property?

CDD fees can have a significant impact on the cost of owning a property. In addition to property taxes, homeowners within a CDD must also pay an annual assessment to cover the costs of infrastructure improvements. This can add up to thousands of dollars per year, depending on the size of the property and the cost of the improvements.

It’s important to note that CDD fees are not optional. If you own property within a CDD, you are required to pay the annual assessment. Failure to pay can result in a lien on your property or even foreclosure.




Typical Terms and Conditions of CDD Fees

CDD fees typically have a fixed term of 20 to 30 years, depending on the amount of the municipal bonds issued. They may also have a prepayment penalty, which can make it more difficult to sell your property before the end of the term.

It’s important to read and understand the terms and conditions of CDD fees before purchasing a property. Your real estate agent can help you navigate the process and ensure that you are aware of all the costs associated with owning a property within a CDD.

Why Consult with a Realtor?

If you’re considering purchasing a property within a CDD, it’s important to work with a real estate agent who has experience with CDD fees. A knowledgeable agent can help you understand the costs associated with owning a property within a CDD, negotiate with the seller on your behalf, and ensure that you are making an informed decision.

In addition, a realtor can help you navigate the process of purchasing a property within a CDD, which can be more complex than purchasing a property outside of a CDD. They can help you understand the terms and conditions of the CDD fees and ensure that you are aware of any potential risks.

Conclusion

CDD fees can have a significant impact on the cost of owning a property within a CDD. It’s important to understand what they are and how they work before purchasing a property within a CDD. Working with a real estate agent who has experience with CDD fees can help ensure that you are making an informed decision and getting the best deal possible.