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Understanding Difference Between HOA's & CDD's

When you buy a house or condo in a subdivision or planned unit development (PUD) in Florida, you automatically become a member of the Homeowners Association (HOA). This is an organized body of homeowners that exercises control over how common areas in the development are used and maintained. The HOA may also have restrictions and requirements concerning a homeowner’s individual property. 

Homeowners associations usually require its members to pay maintenance fees (HOA fees) for maintaining these common areas, which can include but are not limited to landscaping, roads, street signs, recreation areas and selected utilities. These fees can be higher if the community has a pool, golf course or other high-maintenance areas. Most associations try to make decisions that will enhance the value of the common property and also the individual homes. For example, an HOA might regulate such things as the type of fencing or landscaping a homeowner can choose, the color of exterior paint, garages and sheds, types of vehicles that can be parked in front of the home, mail boxes and individual landscaping. Some HOAs can even control what types of home businesses residents may own. 

Some communities have both HOA fees and CDD fees. In these cases, usually the CDD takes care of the general maintenance and the HOA is responsible for enforcing the deed restrictions (deed restrictions refer to limitations on how the property can be used).CDDs: What is a Community Development District (CDD)?A Community Development District (CDD) is a governmental agency that serves its community by planning, financing, building, operating and maintaining specific infrastructure and services for residents. CDDs are established to help to support community development, and represent a major advancement in Florida’s effort to manage its growth effectively and efficiently.

By forming a CDD, a developer can issue bonds to pay for building and preparing the development’s infrastructure and amenities. The CDD owns all of the common areas and amenities and is responsible for assessing an annual fee for the operation and maintenance of all common areas and amenities. 

CDDs can impose taxes and/or assessments on your property to help pay for the construction, operation and maintenance of certain public facilities. These taxes and assessments are in addition to county and other local governmental taxes and assessments. The CDD assessment is paid through your annual tax bill, a portion of which goes to pay back the bond, with the remainder to be budgeted for operation and maintenance.

We have prepared this helpful document for your reference to understand how this works in your community.