SID stands for Special Improvement District
LID stands for Local Improvement District
If you’re buying a newer home in the Las Vegas or Henderson for the first time, chances are you’ll run into a SID or LID. And if you haven’t purchased a newer home in Las Vegas or Henderson before, you may have no clue what these guys are.
SIDs and LIDs are somewhat common in the Las Vegas valley with all of the new home construction and are fees placed on a property by the home builder or developer.
When a developer builds on unimproved land, the city will install the sewer plumbing, streets, water hydrants, and lighting. This cost is passed on to the developer who can then choose to pay the city up front and add the cost to the sales price of each lot/home.
OR the developer may elect not to pay for these improvements up front. If so the city will place an assessment on the community as a whole. The assessment is then divided among all of the properties within the master planned community and paid off on a semi-annual basis over a pre-determined number of years. Typically, around 10 to 20 years to pay off the amount.
The term SIDS is more common in the Summerlin area while LIDS is more common in Green Valley and Seven Hills. But they are essentially one in the same, providing the same benefits.
SIDs/LIDs are placed on the property and therefore stay with the property, transferring from one homeowner to the next when a house is sold and purchased. SIDs/LIDs are different than property tax and function more in the way of HOA fees. Meaning, unpaid SIDs/LIDs can result in your home being foreclosed on. But, they are in addition to HOA dues and other charges, fees and special assessments.
There is the total assessment amount and the annual assessment amount. The annual amount is a portion of the total assessment that is due each year until the total amount is paid in full. The assessment runs with the property, so, if the property is sold, whatever amount is still owed is transferred to the new owner and until the assessment is paid in full.
The community is basically paying off a bond/loan at a fixed interest rate for a set amount of years. However, each homeowner has the option to pay their SID/LID in full at any time (there may be a pre-payment penalty). This is very common in our valley. As a side note, you will find that our property taxes are much lower than in most other states.
Typically it is not recommended to pay off your balance prior to selling your home. This is mainly because paying off your balance will not increase your home value. The amount you pay is not something that can be recouped in your house value, therefore it is most common to let the balance transfer to the new homeowner. In addition, there is a possibility of incurring an early payment penalty if the balance is paid off too quickly.
Also, if you are thinking about buying or selling in the Las Vegas Valley, CLICK HERE or you can call me at 702-370-5112.
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