Naples & Southwest Florida Real Estate
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Association Types & Fees


Naples Real Estate Homes for Sale Association Fees and Types of Fees

Homeowner (HOA) Master Homeowner (MHOA) Condominium (Condo) Association Fees and Community Development District (CDD) Fees Demystified

I talk to frustrated home buyers all the time who need to know about fees when they start their home search, but it’s often difficult to obtain that information.  I’ve decided to offer this service to help those of you who need a fast and convenient way to learn about fees, and to find out what the fees are in a particular neighborhood.  Here are your options:

Learn About Fees: To learn about these types of fees read on.  Keep in mind that Florida also has Community Development Districts (CDD) – homeowners in these districts may also be charged CDD fees.

Get Specific Fee Information:  To get specific fees, contact me and I will email information to you concerning Homeowner/Condo Association Fees and CDD Fees where appropriate.  Please provide the name of the development, and neighborhood or condominium association name. In most cases the actual address is needed, especially for CDD information.

Find the Best Values:  Do you want to know which communities offer the lowest fees, the best value, the most amenities? Call me at 239-898-6865!

New Construction, New Developments: What are the fees? There are so many new ones, where do I begin? Use the New Construction menu item to review all the communities where new construction is available. Or, try the Naples New Homes and New Communities Interactive Map for Naples, Bonita Springs, Estero, and Fort Myers.

Association Fees and the Various Types of Associations

In southwest Florida, and elsewhere in Florida, many properties are located in deed restricted communities. These are not necessarily a gated community with golf and tennis that may come to mind right away. Although, gated communities most certainly are deed restricted. Any side street in any given neighborhood could well be in a deed restricted community.

Deed Restricted Community (DRC)

A DRC quite simply means that along with title to the property comes a set of rules that runs with the land and you must abide by them. The rules typically regulate items like size/type of home, architectural style, parking for certain types of vehicles, rights to community pool, beach club, boat dock or ramp if any and items similar to these. DRCs are managed by a group, typically an association that is organized as a corporation.

Various Association Types

There are several types of associations. Each has a specific purpose and what the association is called usually relates to the ownership type of the property – single family home, condominium (condo), or cooperative to name the most common. For any and all association that you are required to be a member of, you must be presented with a disclosure that details the required fees, both one time fees and ongoing dues/assessments. The various associations and clubs talked about following all have lien rights on real property in these communities for non-payment and they can initiate foreclosure proceedings also.

Condominium Association (Condo)

Many are familiar with this. When you own a condo it’s typically, but not necessarily, in a building with other units. With condo ownership everyone shares in the ownership of the common areas equally or based on some predefined formula. The common areas, for example, include the structure (floors, walls, ceiling…etc) of your particular unit/building, club house and pool if any, and any other structures like a boardwalk over the dunes to the beach!

All owners of a condo are members of the condo association and pay a condo association fee. The fee typically includes monies for repair and maintenance, reserves for major capital expenditures, structural insurances, and liability insurance for the common areas. It is easier to define the common areas by defining what is not – the interior walls of each individual unit and everything within, in general.

The condo owner will need to buy a condo-owner’s insurance policy. This is very similar, but exactly the same, as apartment renter’s policies. The cost for these is typically very low especially when compared to a homeowner’s policy. When comparing monthly costs be sure include the cost for insurance plus the condo fee. The primary reason for the lower cost is that the building structure insurance is part of the condo fee as it is common property.

Home Owners Association (HOA)

A HOA is a corporation formed to manage a group of single family homes. HOA fees are levied to run the corporation and pay for items like common area maintenance, capital maintenance (e.g. club house or pool), capital replacement items (e.g. new roof), new capital projects, and insurance. The fees can include the exterior maintenance of lawns and landscaped areas.

HOA fees typically are lower than condo fees but be sure to include the cost of insurance when determining your monthly cash flow.

Master Homeowners Association (Master)

This is more accurately a Master Property Owners Association (POA) as the corporation formed will usually own, through deed, property that is common to a development where there are one or more HOAs and/or condos. Example: A development may be called, say, Blue Waters. When you buy a property in Blue Waters it may be a condo in the Little Blue Lakes community within or a single-family home in the Grande Lakes community within.

Every owner in Blue Waters either owns a condo in Little Blue Lakes or a home in Grande Lakes. Each would be a member of their local condo association or HOA and a member of the Master.

The primary responsibility for the association is to maintain the property owned which can include common grounds, buildings, and roadways and to promote safety and security for the community.

Club, Country Club, or Golf Club

Depending where you purchase your home you may be required to be a member of “the club” and pay dues, capital contributions, and/or assessments related to the club. Some clubs impose a food and beverage minimum. If you are looking in a community with these types of amenities be sure you get a disclosure from the Seller that outlines any mandatory membership and fees.


“Usual and customary” when it comes to new construction contracts usually does not apply compared to most real estate transactions written on a Board of REALTORS® contract. The contract rules and the contract is written by the developer. Know what it says.

There are additional fees for new construction properties that you will not find in resale transactions. Know what they are and understand why they are assessed.

IMPORTANT NOTE: New Construction Home Buying


Every property owner will pay an HOA fee if your home is in a DRC controlled by an association or a condominium fee. Additionally, if your property is part of a larger development there will most likely be a Master Association fee to pay also.

Homeowner Association and Condominium (Condo) Fees – How much do you pay?

It is often asked what is the formula to determine the fees? While a simple question, the answer is not so. The Board of Directors has the primary responsibility to repair, maintain, and insure all common grounds, areas, and structures. The responsibility can extend to other areas such as security for the development and/or building(s).

The fees, therefore, become a simple calculation of the amount of money required divided by the number of contributors. However, the simple computation of expenses is not sufficient because the Board must plan for obsolescence, capital items replacement (e.g. roof in condos, roadway in developments, swimming pools…etc), and other items. The Board is bound to plan for these items, establish capital reserve accounts, and to collect additional monies for these purposes.

Usually all these expenses are split equally but, in certain communities the expenses can be allotted on a pro rata basis with regard to lot size and/or home and condo size in square feet.

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Computations and Calculations for Reserves for Capital Items

A question often asked is how much should be held for reserves?

The Association needs to ensure there will be sufficient money available for each and every major capital item replacement. Mechanical items (pumps, motors, air conditioners…etc) and physical items (road surfaces, monuments, signs…etc) don’t last forever. They either wear out or deteriorate over time due to exposure to the elements. If enough money is not collected over time special assessments will ultimately be necessary.

The formula is simply the estimated replacement or major repair cost for the item divided by estimated useful life of the item in years. The result will determine the amount of money to be reserved each year to deal with the replacement when required. The annual amount is then levied as part of the annual budget to each paying unit.

It’s very important to collect these monies regularly from all owners. If the association does not and then must special assess to provide the funds, the current owners will be unduly burdened to pay an unfair share for the amount of use they enjoyed for the items. e.g. In a new complex that is not collecting reserves from the beginning will find that owners that sell and move out in one or two years will not have contributed their fair share for their use of the capital items.

The association’s management company can help determine the useful life for various items – e.g. pumps and motors 5 – 7 years, road surfaces 20 – 25 years.

However, if you will be financing a condominium purchase be aware that Fannie Mae, Freddie Mac, and Florida statutes mandate the amount of funds collected each year for reserves. In order for you to obtain financing and in addition to you as the borrower qualifying for the payments, the lender will qualify the condo project. The level of review for qualification depends on a couple of items – 1) is the condo a second home or primary residence, and 2) what percent of purchase price will you make as a down payment for the purchase?

Other Fees and deposits

Transfer fee – Associations are corporations formed in the state of Florida. They all operate with an annual budget. To help offset the costs associated with processing applications for buyers and renters as well as general expenses for the association some have enacted a transfer fee and/or an application fee paid by the new owner upon transfer of the property. Without application to the association and payment at closing of the fee(s), the transaction will not close. The transfer fee, if any, can be a few hundred dollars to $7,500 or more.

Miscellaneous fees – Depending on the particular development and locale, there may be fees for cable TV hook-up and utility deposits.

Capital Contribution Fees –

This varies widely by community from no fee to as much as $15,000 in some, paid by the buyer. The fee can be non-refundable, partially refundable, or refundable upon sale. It serves to bolster the capital reserves for the community and provide interest income.


Florida, and other states, allow the establishment for community development districts or CDD. Other states may use a different name. There are also municipal service taxing units – MSTU – that are similar.

How do these come about? To support rapid growth and development, the local government often does not have the funds to build the required infrastructure – roads, water, sewer, drainage…etc. To enable growth, the local government floats a bond or bonds to raise money that is turned over to the developer who puts in place the infrastructure for the development.

What exactly is a CDD? The “CDD” becomes a corporation that is managed by a board of directors. The board is ensured to collect the required funds because the CDD is now a taxing authority with lien rights over the property.

How is it paid back There are two parts to any CDD 1) the principal balance and 2) operations and maintenance  (O & M) costs. The balance and O&M are paid annually on the real estate tax bill, interest accrues and is paid on the principal. One can choose to payoff one’s principal balance anytime and avoid the interest. The O&M remains to keep up the infrastructure.

How much will it cost? The cost varies with every CDD. Some have been around quite a while and there is no principal balance remaining and others are relatively new with 20 years or more remaining. Prior to the purchase of any property within a CDD you must be provided with a disclosure that tells the outstanding principal balance on the property. Further, through the tax rolls, it is easy to determine the annual payment required for the principal and interest.

CDDs are, in fact, managed by professional management companies for the district.

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