Many people to who move to the Sunshine State are taken aback when they are introduced to CDD (Community Development District) Fees. What are they and how are they different than HOA fees?

First, it’s helpful to know why CDDs exist. These fees were created and are used primarily in Florida to shift the burden of planning, building and maintaining roads, utility lines, water/sewer systems, conservation areas, and other conveniences in new communities away from local governments.

The many costs of installing infrastructure are financed by the community’s developer through tax-free municipal bonds that are issued when the community is built. These bonds also pay for amenities like clubhouses, swimming pools, tennis courts, golf courses, yoga lawns, dog parks, you name it!

Then the cost of the bond is passed onto homeowners who purchase a home in one of these communities. They pay the costs over a span of time—generally 15 to 30 years—through property taxes each year. If you have a mortgage, it’s amortized into your payment.

I know what you might be thinking: “But wait, that sounds a little like an HOA!” Believe it or not, there are differences between CDD fees and HOA fees.

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