Understanding The Difference Between HOA’s and CDD’s:

What New Homeowners Need To Know

A view by a Community Association Manager

An Opinion By Robert G. Comstock

Published September 2, 2025

Buying a home in Florida often means joining a community governed by either a Homeowners’ Association (HOA), a Community Development District (CDD), or as I recently learned - a community may be governed by both.

I am a Licensed Community Association Manager (LCAM), and although I am familiar with HOA’s but I was not familiar with the technicalities of  CDD’s. While the assumption may be that they are pretty much the same, HOA’s and CDD’s serve different purposes.  

My partner and I recently purchased a home in a newly developed community governed by both.   As a result,  I’ve learned the function of each, and how they affect homeowners in different ways.

From day-to-day life, from your wallet to theirs.    I am sharing this because understanding the difference will help new homeowners know what to expect when it comes to responsibilities, rules, and fees for each.

What is a HOA?

A Homeowners’ Association (HOA) is a private nonprofit entity that is responsible for shared community spaces, enforcing rules, and maintaining a certain standard of appearance and order. When you purchase a home within a HOA-governed community, you automatically become a member.

In Florida, HOAs are governed by Florida Statute 720.

Key Points About HOA’s:

• Purpose: To ensure that all common areas and homes within the community are maintained in a manner that upholds pleasant community aesthetics.

• Governance: Governed by documents like the Declaration of Covenants and Restrictions and community bylaws. HOA’s set rules regarding home appearance, parking, noise, use of amenities, etc.

• Fees: Collected monthly, quarterly, or annually. These dues fund maintenance, insurance, community services, etc.

• Enforcement: HOA’s can issue violations, fines, place liens, or even initiate foreclosure if dues go unpaid.

What is a CDD?

A Community Development District (CDD) is a government entity that funds, builds, and maintains infrastructure in a new community. Infrastructure meaning roads, stormwater systems, sidewalks, streetlights, and sometimes recreation and amenity facilities. Rather than the developer paying for these big-ticket items and the HOA having to govern and maintain these items, a CDD allows communities to use bonds (a form of long-term loan) to pay for the infrastructure upfront. Homeowners then pay off the bonds over time as a non-ad valorem assessment on their property tax bill.

Key Points About CDD’s:

• Purpose: To pay for and manage infrastructure such as roads, stormwater systems, streetlights, utilities, and recreation and amenity facilities.

• Governance: Initially controlled by the developer, but over time, homeowners elect representatives to the Board.

• Fees: CDD fees are collected as part of your annual property tax bill. They often include a portion to repay bonds for infrastructure construction and a portion for ongoing maintenance.

• Duration: Once construction bonds are paid off, the maintenance portion of the fee typically continues.

Key Points – HOA’s vs CDD’s:

For new homeowners, knowing the difference between HOA’s and CDD’s is important.    It affects your monetary obligations so that you can budget and understand your obligations, as well as the obligations that you the HOA or CDD owe to .

If you’re going to purchase a home in a community governed by both, always review the HOA documents, ask about CDD assessments and responsibilities, and make sure you’re comfortable with the financial and lifestyle commitments that both require.