What a CDD is
A Community Development District is a special-purpose local government that Florida law (Chapter 190, Florida Statutes) allows to build and pay for a community's infrastructure: roads, water and sewer lines, stormwater ponds, and often amenities like a clubhouse or pool. The district borrows through bonds to build it, and the homeowners inside the district repay those bonds over time through assessments.
The two parts of the fee
Most CDD bills have two parts:
- Debt service (sometimes called the capital assessment) repays the bonds. It usually runs for a set term, often around 30 years, and then ends.
- Operations and maintenance (O&M) pays for upkeep of what the district owns, and continues for as long as the district does.
How you pay it
In most districts the assessments are collected on your annual property tax bill, listed as non-ad valorem assessments, so you pay them with your taxes or through your mortgage escrow. That's why a tax bill in a CDD can be noticeably higher than a similar home's outside one.
Comparing homes with and without a CDD
A CDD doesn't automatically make a home more expensive to own. You're paying directly for infrastructure that might otherwise be built into the price or an HOA fee. Compare the full monthly cost of each home, with taxes, CDD, HOA, and insurance together, instead of the price alone. The mortgage calculator includes a line for each.
Questions to ask before you buy
- How much are the debt service and O&M assessments on this specific lot? They can differ by lot size.
- When does the debt portion end, and can it be paid off early?
- Is the district planning to issue new bonds?
- Where can I read the district's budget?
Each CDD publishes its budget and meeting records, and a property's tax bill on the Manatee County Tax Collector's site shows the assessments charged to it.
What sellers have to tell you
Florida law requires a CDD disclosure statement in the contract for the first sale of a home in a district (section 190.048, Florida Statutes). On a resale, ask for the current assessment amounts in writing before your inspection period ends.
