Another Newbie question re: bond

[Dennis and Rose]

Coming for the VLS in Sept. We noticed no bond on homes in Lake County. I would guess there are other charges that are imposed there. Is there an advantage to the bonded communities, or not bonded?

[luvmagic2]

Only advantage to having a home with no bond is less debt, ( bond payments are made with tax bill). All homes have, or had, a bond.....no bond just means it's been paid in full already and when you pay your taxes it will be about a grand less. Newer sections have a larger bond than older ones

[applesoffh]

It is my understanding that a bond cannot be charged in Lake County since it is against the county law. If the house is new, the cost of infrastructure will be built into the price of the home. If it is a resale, the price is the true price. A great deal of this information was made available when the Developer started building The Villages of Fruitland Park, which is in Lake County.

[njbchbum]

Dennis/Rose - No bond on the historic side and no other assessments/manitenance costs either. We just pay our amenities fees as all other residents do. We are the original properties of the Villages and any cost of a bond is long gone! Our neighborhoods have been here for more that 25 years!

The advantages to the newer communities with bonds - traffic, smaller lot size, lack of mature landscaping, kissing lanais with neighbors and about a 40 minute cart ride to visit any friends you make in the historic villages. ;)

[LynnDeb]

We bought om Marion County side in The Villages (not far from Nancy Lopez) a resale the bond was paid in full by previous owner

[Dennis and Rose]

Thanks as always for the advice, you guys never let us down. Our heads are starting to spin though with all the research :)

[Bogie Shooter]

Thanks as always for the advice, you guys never let us down. Our heads are starting to spin though with all the research :)

More info on Bonds:
VCDD Bond FAQs (http://www.districtgov.org/departments/Finance/faq.aspx)

[Shimpy]

It is my understanding that a bond cannot be charged in Lake County since it is against the county law. If the house is new, the cost of infrastructure will be built into the price of the home. If it is a resale, the price is the true price. A great deal of this information was made available when the Developer started building The Villages of Fruitland Park, which is in Lake County.

Isn't this the way the rest of the country operates? You buy a home and the price reflects what the markup is including what it costs to build it plus the infrastructure.'The Villages does it this way to make their homes seem low priced until you realize that you have a bond which normally would be included into the selling price.

[JB in TV]

Isn't this the way the rest of the country operates? You buy a home and the price reflects what the markup is including what it costs to build it plus the infrastructure.'The Villages does it this way to make their homes seem low priced until you realize that you have a bond which normally would be included into the selling price.

If I am not mistaken, CA has something called "Mello-Roos" (named after the two legislators whose bill was approved and put into law) that allows the developer to charge each homeowner a specific amount on their property taxes to pay for the infrastructure. I know when we were looking at new properties there 10-11 years ago, some developements had it and others did not. It added quite a bit to the tax bill. Not sure the details, but it seems very much like the bond in TV.

EDIT: Just looked this up on wikipedia... "...A Mello-Roos District is an area where a special property tax on real estate, in addition to the normal property tax, is imposed on those real property owners within a Community Facilities District. These districts seek public financing through the sale of bonds for the purpose of financing public improvements and services.[3] These services may include streets, water, sewage and drainage, electricity, infrastructure, schools, parks and police protection to newly developing areas. The tax paid is used to make the payments of principal and interest on the bonds.

Many communities requiring new schools and infrastructures such as public parks and roads impose Mello-Roos...."

[Bogie Shooter]

I remember "Mellow Yellow".:wave:

[buggyone]

Coming for the VLS in Sept. We noticed no bond on homes in Lake County. I would guess there are other charges that are imposed there. Is there an advantage to the bonded communities, or not bonded?

The bonds on new homes is around $23,000 to $50,000

Personally, I suggest a preowned home as you will be able to negotiate price, see what mature landscaping does, and have much lower or no bond.

Also, use a Villages Properties agent AND a MLS agent as neither can show each others listings.

[applesoffh]

Isn't this the way the rest of the country operates? You buy a home and the price reflects what the markup is including what it costs to build it plus the infrastructure.'The Villages does it this way to make their homes seem low priced until you realize that you have a bond which normally would be included into the selling price.

I don't know about the rest of the country. Where I came from the cost of the infrastructure was never included in the price of a house, as the infrastructure was almost 100 years old and the houses almost as old. We paid NYC taxes which paid for improvements to infrastructure. Considering what houses are going for in the neighborhood where I grew up ($600M to more than $2 million)
where the original asking price was $5,500 to $14,000, that would be a helluva markup. Real estate is different throughout the country.

[Bonanza]

The bonds on new homes is around $23,000 to $50,000

Personally, I suggest a preowned home as you will be able to negotiate price, see what mature landscaping does, and have much lower or no bond.

Also, use a Villages Properties agent AND a MLS agent as neither can show each others listings.

Sorry, but your information is not true.

Villages agents CAN show a Realtor's MLS listings, but they don't and won't.
They would still get a commission if they did. Unfortunately, they don't have access to the MLS system, however, because they don't pay dues and belong to the local board. They still could see all the listings on Realtor.com, though.

Realtors can show Villages' listings but don't because the Villages will not cooperate with them and they won't pay a commission to them.
That's why Realtors don't show Villages' properties.

It's unfortunate that that's the way The Villages chooses to operate.
They really are doing a disservice to sellers here when a seller could benefit from both sides.

[mulligan]

Yet, they seem to be fairly successful.

[Bonanza]

More info on Bonds:
VCDD Bond FAQs (http://www.districtgov.org/departments/Finance/faq.aspx)

There is so much more to our bond issues here in TV, than other CDDs in Florida.

In other CDDs residents are also on their CDD board. Here, the CDD is made up of the developer's people ONLY. Since residents have no say, our CDD has taken it upon themselves to pay Mr. Morse's attorney who is defending him against the IRS, out of residents' funds (to the tune of over $700,000 thus far), not his own pocket. We have no say about this, nor will we have any say regarding the fine the IRS will most likely tell Mr. Morse he has to pay, which once again, will come out of residents' pockets.

Here's a little information to digest:

The CDD framework in the first six years allows developers to control the decision-making process because they are the primary property owner, and one vote is allocated for each acre owned in the district. The developer can elect supervisors who are his employees, associates or friends, who then can make decisions for the benefit of the developer.[4] Until the residents own property greater than 33% of total votes, they may not have a single representative on the BoS. Only when the residents own property greater than 50% of total votes will they have an opportunity to outvote the supervisors chosen by the developer. While the developer controls the BoS, he or she may direct the board to purchase the common property from the developer at highly inflated values determined by special appraisers, who use an income approach appraisal method rather than the standard, cost approach. This is legal because the appraisal is approved by the BoS. The district manager, hired by the BoS, may administrate for the interests of the developer rather than the residents.

In January 2008, the Villages Center CDD (VCCDD) was notified by the Internal Revenue Service of the IRS' intent to audit several recreational bonds issued in 2003 to determine compliance with tax regulations (mainly due to their status as municipal bonds which are exempt from Federal income tax). The IRS sent three "Notices of Proposed Issues" in January 2009 challenging the tax-exempt status of the bonds on three grounds:
1.the Issuer does not qualify as a political subdivision or "on behalf of the issuer" of tax-exempt bonds pursuant to Section 1.103-I(b) of the Internal Revenue Code regulations,
2.the opinions of value do not support the price paid by the Issuer to the developer for the Series 2003 Facilities and the payment of the sales price for the facilities to the developer by the Issuer is not a governmental use of the proceeds of the Bonds, and
3.the Bonds are private activity bonds the interest on which is not excludable under IRS Section 103.

The position stems in large part from the interrelationship between VCCDD and The Villages developers (since VCCDD has no residents, the Board of Supervisors consists solely of individuals who work for or have an affiliation with The Villages developers, and VCCDD's infrastructure was purchased by the developers-controlled board from the developers). Essentially, the IRS position is that the VCCDD is an "alter ego" for the developers.

[slipcovers]

Bonanza, Just curious, given all the information you post....why did you buy in TV? You seem sooo unhappy and bitter living in TV....the roads...roundabouts...drainage...and especially the developer. Just saying.

[graciegirl]

Sorry, but your information is not true.

Villages agents CAN show a Realtor's MLS listings, but they don't and won't.
They would still get a commission if they did. Unfortunately, they don't have access to the MLS system, however, because they don't pay dues and belong to the local board. They still could see all the listings on Realtor.com, though.

Realtors can show Villages' listings but don't because the Villages will not cooperate with them and they won't pay a commission to them.
That's why Realtors don't show Villages' properties.

It's unfortunate that that's the way The Villages chooses to operate.
They really are doing a disservice to sellers here when a seller could benefit from both sides.

It would ONLY benefit the outside realtors.I like it THIS way. The builder does it because the builder CAN do it. It the better mousetrap part. The world IS beating a path to his door.

[Bogie Shooter]

There is so much more to our bond issues here in TV, than other CDDs in Florida.

In other CDDs residents are also on their CDD board. Here, the CDD is made up of the developer's people ONLY. Since residents have no say, our CDD has taken it upon themselves to pay Mr. Morse's attorney who is defending him against the IRS, out of residents' funds (to the tune of over $700,000 thus far), not his own pocket. We have no say about this, nor will we have any say regarding the fine the IRS will most likely tell Mr. Morse he has to pay, which once again, will come out of residents' pockets.

Here's a little information to digest:

The CDD framework in the first six years allows developers to control the decision-making process because they are the primary property owner, and one vote is allocated for each acre owned in the district. The developer can elect supervisors who are his employees, associates or friends, who then can make decisions for the benefit of the developer.[4] Until the residents own property greater than 33% of total votes, they may not have a single representative on the BoS. Only when the residents own property greater than 50% of total votes will they have an opportunity to outvote the supervisors chosen by the developer. While the developer controls the BoS, he or she may direct the board to purchase the common property from the developer at highly inflated values determined by special appraisers, who use an income approach appraisal method rather than the standard, cost approach. This is legal because the appraisal is approved by the BoS. The district manager, hired by the BoS, may administrate for the interests of the developer rather than the residents.

In January 2008, the Villages Center CDD (VCCDD) was notified by the Internal Revenue Service of the IRS' intent to audit several recreational bonds issued in 2003 to determine compliance with tax regulations (mainly due to their status as municipal bonds which are exempt from Federal income tax). The IRS sent three "Notices of Proposed Issues" in January 2009 challenging the tax-exempt status of the bonds on three grounds:
1.the Issuer does not qualify as a political subdivision or "on behalf of the issuer" of tax-exempt bonds pursuant to Section 1.103-I(b) of the Internal Revenue Code regulations,
2.the opinions of value do not support the price paid by the Issuer to the developer for the Series 2003 Facilities and the payment of the sales price for the facilities to the developer by the Issuer is not a governmental use of the proceeds of the Bonds, and
3.the Bonds are private activity bonds the interest on which is not excludable under IRS Section 103.

The position stems in large part from the interrelationship between VCCDD and The Villages developers (since VCCDD has no residents, the Board of Supervisors consists solely of individuals who work for or have an affiliation with The Villages developers, and VCCDD's infrastructure was purchased by the developers-controlled board from the developers). Essentially, the IRS position is that the VCCDD is an "alter ego" for the developers.


Can opinion be separated from fact in this posting?

[Topspinmo]

For thoses that know and kind enough to answer. While were on the subject of bonds and taxes. Of the three counties (Sumter, Marion, Lake) that the Villages are in which ones are higher or lower in taxes. I notice comparable size homes taxes can be close to 1K difference between counties. Or does this include the bond that not paid on the property?

I have also noticed the difference in Realtor's listings Zillow for instance, Villages will show property for sale, but Zillow will not show it for sale and ViseVersa.

[graciegirl]

Can opinion be separated from fact in this posting?


It is just realtor speak.

I speak Happy Villager speak.

BACK TO THE SUBJECT.

The last I heard was; The bond on a designer is about 23K, the bond on a premier is about 50k and the bond on a patio villa is about 13K.

It is the cost of not only the usual things, such as essential water, electrical, sewers, etc, but also the golf courses, and recreation centers with public pools and the beautiful landscaping along roadways. The amenity fee is about $140 a month.

We are not in Kansas anymore. It was very surprising to us when we first heard it, but now that we have bought two new homes here, it is just how it's done. We have NOT paid our bond off, although we have no mortgage, we might just want to move again, if the Morses build something we like better than our current home, so we think that when you list a home to sell that having the bond separate, makes the selling cost lower. Many people pay off the bond because the developer does charge a large interest. About six percent.

[cmj1210]

We purchased a new home, last month personally we decided on paying the bond because it is a new home with a warranty. Resales are negotiable with mature landscaping but I would prefer not to have to worry about a new roof, heating & act systems etc for a long time. This is just our opinion but any home in the Villages that you purchase whether it be resale or new is a purchase into "the dream."

[The Mountaineer]

It always comes down to: You pay for the cost of building the home, no matter what conduit is used. Bonds, property taxes, purchase price, "fees." Some try to disguise it by changing what it's called, but there's no free lunch. Whatever it cost to build a home, or purchase a home (if it's being resold) is factored into what you pay. Usually everyone is paying about the same price, just the itemization is under different names.

[Bonanza]

Bonanza, Just curious, given all the information you post....why did you buy in TV? You seem sooo unhappy and bitter living in TV....the roads...roundabouts...drainage...and especially the developer. Just saying.

Interesting question . . .

All of the things you mention are things that a buyer is unaware of. No, I am not bitter and I find your comment "sooo" uncalled for. All is not roses and rainbows here in the Villages, while there are many great things about the community. However, to the unknowing potential buyer, I don't think things should be swept under a carpet, as is done here. They should be aware and subsequently make their own decision as to what is important to them and what is not.

The simple facts are:

Drainage is a problem. The lots are not properly filled enough to prevent walking and squishing in grass for two days until the water either drains or evaporates.

The roads are not private. It costs residents over $1,000,000 a year to have a "guard" at the gate who has to let everyone through, regardless of who they are. That's not even mentioning gates that are frequently in disrepair.

While the circles are beautiful now, they are a traffic hazard. Everyone seems to have a different idea of how to navigate them, most of which don't seem to work. You'd better pray each time you go around one because you never know what the other guy is going to do. They are also tremendous gas guzzlers.

And the developer . . . He has done incredible things here. He's brilliant, a visionary, and deserves many accolades. However, it's all about the almighty buck and there ain't no free lunch here as indicated in the way the CDD runs and the funds from residents only (and none from him)) that are being used to pay his attorney regarding the lawsuit with the IRS concerning the bond. We, the residents, will also be the one to pay the fine when the IRS levies their "bill." This IRS thing has been going on for years and Mr. Morse keeps delaying the outcome. The IRS wouldn't be questionning his bond issue if there was no question that it was legal and above board. There are hundreds of bonds in Florida communities that do not present any problems.

So what is your problem with the things you have mentioned that I've said??? They are all true and have nothing to do with lies or misinformation. Perhape you are unhappy that these things are pointed out because you simply don't want to think about them or don't care.

"Just saying . . ."

[Bonanza]

Can opinion be separated from fact in this posting?

Yes, Bogie.
Opinion has been separated from fact.
I did not write any of it.
Like it or not, it is a direct quote (as in verbatim) from Wikipedia.

[Bogie Shooter]

Wikipedia, the opinion place!

[njbchbum]

Wikipedia, the opinion place!

Wait a minute!!! Bonanza - Are you telling Bogie that your post #15 was 'lifted' directly from Wikipedia and you did not cite the 'lift'? And that you consider the Wikipedia resource to be factual?

This Wikipedia: "By default, an edit to an article immediately becomes available. As a result, articles may contain inaccuracies, ideological biases, and nonsensical or irrelevant text until an editor corrects such deficiencies." Wikipedia - Wikipedia, the free encyclopedia (http://en.wikipedia.org/wiki/Wikipedia)

[Advogado]

There is a fair amount of misinformation about bonds in this thread. However, there is a very good one-page explanation of the basic system, and a matrix, on page 12 of the April 2011 POA Bulletin. Go to poa4us.org. On that web site, you can also find reliable information about the IRS investigation of the amenity bonds issued by the Center Districts (which investigation does not include the infrastructure bonds issued by the numbered Districts).

An interesting question, not raised in this thread, is: How has the Developer gotten away for so long advertising prices of new houses without disclosing, in the ads, the amount, or even existence of, the infrastructure bonds. That bond now adds an extra hidden 10% (+/-) cost to the price of a new house.

The new house buyer here is like a car buyer, who sees a car advertised for $25,000, goes into the car dealer to buy it, and then learns from his sales person (if the buyer pays attention) that the engine will be an extra $2,500--but Buyer can pay the extra amount over time, plus interest, with his tax bill, so it "won't really matter". A car dealer advertising like that would have the FTC and numerous consumer-protection agencies all over him, and the bond is a heck of a lot more than the $2,500 in my analogy.

[Bonanza]

Wait a minute!!! Bonanza - Are you telling Bogie that your post #15 was 'lifted' directly from Wikipedia and you did not cite the 'lift'? And that you consider the Wikipedia resource to be factual?


I stated that it was not my opinion --
that it was a quote from Wikipedia.

What part of the Wikipedia insert do you find to be innaccurate?

[slipcovers]

Interesting question . . .

All of the things you mention are things that a buyer is unaware of. No, I am not bitter and I find your comment "sooo" uncalled for. All is not roses and rainbows here in the Villages, while there are many great things about the community. However, to the unknowing potential buyer, I don't think things should be swept under a carpet, as is done here. They should be aware and subsequently make their own decision as to what is important to them and what is not.

The simple facts are:

Drainage is a problem. The lots are not properly filled enough to prevent walking and squishing in grass for two days until the water either drains or evaporates.

The roads are not private. It costs residents over $1,000,000 a year to have a "guard" at the gate who has to let everyone through, regardless of who they are. That's not even mentioning gates that are frequently in disrepair.

While the circles are beautiful now, they are a traffic hazard. Everyone seems to have a different idea of how to navigate them, most of which don't seem to work. You'd better pray each time you go around one because you never know what the other guy is going to do. They are also tremendous gas guzzlers.

And the developer . . . He has done incredible things here. He's brilliant, a visionary, and deserves many accolades. However, it's all about the almighty buck and there ain't no free lunch here as indicated in the way the CDD runs and the funds from residents only (and none from him)) that are being used to pay his attorney regarding the lawsuit with the IRS concerning the bond. We, the residents, will also be the one to pay the fine when the IRS levies their "bill." This IRS thing has been going on for years and Mr. Morse keeps delaying the outcome. The IRS wouldn't be questionning his bond issue if there was no question that it was legal and above board. There are hundreds of bonds in Florida communities that do not present any problems.

So what is your problem with the things you have mentioned that I've said??? They are all true and have nothing to do with lies or misinformation. Perhape you are unhappy that these things are pointed out because you simply don't want to think about them or don't care.

"Just saying . . ."



WOW!!! My question was, "Why did you buy here"?

[Birdie Dreamer]

I stated that it was not my opinion --
that it was a quote from Wikipedia.

What part of the Wikipedia insert do you find to be innaccurate?

Let's start with the second sentence. Most of the CDD's have elected representatives. It is only the newer ones that have representatives appointed by the Developer.

[dewilson58]

It always comes down to: You pay for the cost of building the home, no matter what conduit is used. Bonds, property taxes, purchase price, "fees." Some try to disguise it by changing what it's called, but there's no free lunch. Whatever it cost to build a home, or purchase a home (if it's being resold) is factored into what you pay. Usually everyone is paying about the same price, just the itemization is under different names.

:agree::agree:

A lot of posts aren't even on the topic..........just attacking each other. Come on.

[Bonanza]

WOW!!! My question was, "Why did you buy here"?

Of the few items I mentioned, I think it's apparent that a buyer would not have any idea that any of these things exist or because they aren't mentioned when purchasing a property here, present company included.

Were you aware of any of these things? I'd say that 99% of the Villages population didn't have a clue but probably do now.

Now do you get it?

[Moderator]

Please address the topic of infrastructure bonds and do not direct off topic comments at each other.



Thank you.

[njbchbum]

I stated that it was not my opinion --
that it was a quote from Wikipedia.

What part of the Wikipedia insert do you find to be innaccurate?

Once I was aware that you had copied the material from Wikipedia where nothing can be taken as reliable I have to question the factual nature of the entire reprint posted without acknowledgement.

I believe the material suggested by Advogado to be a more accurate piece of information for folks with a need to know about bonds and the IRS.

Am done with this - the Mod has posted! Just felt I should answer your question to me. Ciao!

[buggyone]

I believe the OP was talking of the infrastructure bonds. Where I lived in Maryland, this was called the front foot benefit charge. Basically the same thing.

My bond was paid by the original buyer. Saved me $20,000. The new homes did not have the features I wanted and cost the same as mine but also had the full bond. I was also able to negotiate price.

[Bonanza]

Yet, they seem to be fairly successful.

Yes, that's true. They are successful.

[Bonanza]

It would ONLY benefit the outside realtors.I like it THIS way. The builder does it because the builder CAN do it. It the better mousetrap part. The world IS beating a path to his door.

Yes, Gracie, It would benefit the Realtors because it would add to their ability to earn a living.
But it would definitely benefit the sellers and buyers, as well.

The developer chooses not to cooperate with Realtors and that's his call, but it is NOT the better mousetrap.
Free enterprise for all is always better when there is healthy competition and usually, everyone wins.

There is no down side to it.

[Bonanza]

Once I was aware that you had copied the material from Wikipedia where nothing can be taken as reliable I have to question the factual nature of the entire reprint posted without acknowledgement.

I believe the material suggested by Advogado to be a more accurate piece of information for folks with a need to know about bonds and the IRS.


Wikipedia is a very reliable source of information on many topics.

Interestingly, you are not mentioning and skirting the issue of what part of Wikipedia's CDD/bond information you find inaccurate. I doubt you can quote any major flaws and it is written in basic English that mostly everyone can understand.

The page 12 you refer to in Advogado's post mentions nothing regarding the IRS CDD law suit against Mr. Morse/The Villages.
I guess you didn't read it.