Difference between HOA and CDD explained



Question: What is the difference between a CDD and an HOA? (RB, by e-mail)

A: A community development district, or CDD, is a special independent tax district created under Chapter 190 of the Florida statutes. A CDD is a type of government entity, usually created at the request of developers of large tracts of land, responsible for the planning, financing, construction, operation and maintenance of certain infrastructure such as roads, street lighting, utilities and equipment in a planned development. .

A city or county ordinance creates the CDD and prescribes its specific structure and authority, which often includes the power to promulgate rules and regulations governing the use of CDD facilities and the ability to impose and collect taxes. and / or valuations to repay bonds issued for infrastructure. The CDD is run by a supervisory board elected by the landowners within the CDD. A CDD also makes it possible to theoretically spread the costs of certain improvements over the life of the bonds issued, rather than including these costs in the price of the initial sale of the home. If the property to be purchased is part of a CDD, there is a mandatory disclosure advising this in the purchase contract.

In comparison, a homeowners association, or HOA, is a private corporation responsible for the operation of an individual community in which voting members are made up of landowners or their agents, or a combination of them. Each HOA will vary, but generally HOA membership is required as a condition of ownership. There are also voluntary HOAs.

Members of an HOA are generally subject to covenants, conditions and restrictions that apply to their title to their property. Where an HOA is mandatory and the right to collect assessments taken from the plot is secured by a lien, the association is governed by Chapter 720 of the Florida Statutes, known as the Florida Homeowners’ Association Act. There are also mandatory disclosure requirements in purchase contracts.

Some properties may be part of both a CDD and an HOA, in which case they may be subject to HOA assessments and taxes or CDD assessments.

Question: I live in a condominium and my association told us that we need 75% of our owners to vote to paint the hallways a different color. Is it true? Our walls and doors are an ugly and dated combination of yellow and brown. We did an assessment to pay if that matters. (KK, by email)

A: The source of the funds does not matter, the cost of the work maybe.

Typically, color changes are “material changes” to common elements and require the approval of 75% of all owners unless the declaration of co-ownership contains a different procedure for authorizing material changes. Most likely yes, a membership vote would be required, however, the voting threshold will depend on the specific language (or lack thereof) of your association’s co-ownership documents. You should carefully consider the specific language of your condominium documents to determine the specific voting threshold required.

Most declarations contain a substantive modification clause. Some require owner approval only if the change exceeds a certain amount. When a owners vote is required, most statements base the required vote on those who actually vote at a meeting (in person or by proxy), rather than on situations where “no votes” are “not”. of votes ”, but the specific language of the statement will control.

Joe Adams is a lawyer with Becker & Poliakoff, PA, Fort Myers. Email your questions to Joe Adams at [email protected] Previous editions can be viewed at floridacondohoalawblog.com



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