A non-ad valorem assessment is levied to provide funding for a localized improvement or service that yields a special benefit to property in a specific geographic area. Most commonly, non-ad valorem assessments are levied for improvements such as street lighting, solid waste collection and disposal, lake management (restoration and aquatic vegetation management), road paving and stormwater control systems, and the extension of water or wastewater transmission lines. There are two types of non-ad valorem assessment associated with the Seminole County MSBU Program –capital assessment and variable rate assessment.
A capital assessment represents a one-time levy of a specific amount (cost share) assigned for a specific improvement project. A capital assessment includes financing arrangements that enable repayment of the assessment over a fixed period of time. Capital assessments are generally related to construction projects, as such projects often require extended repayment terms to enhance affordability.
The details or terms of an assessment are identified early in the MSBU application process and are communicated to property owners during the Petition for Creating an MSBU phase of MSBU application processing. A preliminary assessment (based on estimated project cost) is recorded as a lien when an MSBU for a capital project is established. Property owners are noticed of project status and cost factors throughout the project. When the project has been completed, the assessment and lien records are updated to reflect a final levy based on actual project cost. After the final assessment amount is confirmed, property owners have the right to pay their property assessment in full at any time.
Beginning with the first available tax roll following project completion, annual installment payments are collected via the property tax bill until the assessment is paid in full. Following receipt of full payment of a capital assessment, a document confirming the lien satisfaction will be processed by the MSBU Program through the Board of County Commissioners and the Clerk of the Court. A signed confirmation of lien satisfaction will be mailed to the property owner.
A payment schedule is provided on-line for each fixed term MSBU for estimating a lien payoff or identifying the remaining number or years of installment payments. A current assessment balance, pay-off amount (which will be inclusive of accrued interest), payment instructions, or additional information regarding fixed term assessment is available by email or calling the MSBU Program at (407) 665-7178.
A “variable rate” assessment represents the cost share assigned to a property on an annual basis for services or improvements that are provided by the County on an ongoing basis and/or for an indefinite period of time. The variable rate assessment format is used for funding residential solid waste management, street lighting, aquatic vegetation management, and other similar public services. The service scope and cost expectations for an MSBU proposed with a variable rate assessment are identified early in the MSBU application process and are communicated to property owners during the Petition for Creating an MSBU phase of MSBU application processing; and/or via public notice when the creation of a variable rate MSBU is scheduled for consideration by the Board of County Commissioners.
The initial assessment for a variable rate MSBU is levied via the first available tax roll following the creation of the MSBU. The assessment amount for subsequent years will be determined annually per the budgeted cost for providing the authorized public service. The rate proposed annually by the MSBU Program is subject to approval by the Board of County Commissioners.
Variable rate assessments are typically levied in advance of the costs being incurred. Provided the assessment is paid within the payment deadline, no lien action is enforced. Satisfaction of lien documentation is not processed for variable rate assessment activity.
Property owners have the right to be mailed notice of proposed and adopted non-ad valorem assessments. A Notice of Proposed Non-Ad Valorem Assessment is mailed annually (typically in July) to the owners of property included in the assessed boundary of any MSBU. The Notice provides information regarding the proposed and/or adopted assessments, property owner rights, and related public hearing activities. The annual Notice includes all levied assessments – both variable rate and the installment payments to be collected via the property tax bill for that tax year.
Non-ad valorem assessments are assigned to property, not individuals. Therefore, for both types of assessments, at any given point in time, the current owner of the assessed property is accountable for paying assessments that are due. Since the non-ad valorem assessments are property specific, when a property sale takes place, the MSBU Program does not distinguish between former owner and new owner. The Program simply views the amount as being due from the current owner.
As a general rule, the County does not require payment of outstanding assessments prior to the sale of property. In most sale situations, payment of outstanding assessments is a negotiated settlement factor between the buyer and the seller. However, an exception to this rule is related to assessments that are delinquent through non-payment of property taxes. When property taxes or assessments are not paid by the statutory due date, a tax certification may be issued by the Tax Collector and a tax lien may be placed on the property for the delinquent amount. In these cases, the debt must be satisfied at the time of property sale.
Although Seminole County Government may not require payment of the assessment balance at the time of property sale, some mortgage companies may require lien satisfaction in order to finance or refinance the property. These assessment payment decisions are determined by property owners. The decision to make early payoff, as well as the decision regarding who will pay the assessment balance is between the buyer and the seller. If an assessment balance is to be paid, the MSBU Program must be notified so that a payoff amount can be confirmed. Following receipt of the final payment, a Satisfaction of Lien document will be provided.
An MSBU assessment lien is satisfied by full payment. When a fixed term assessment is paid in full, a "Satisfaction of Lien" document is prepared and processed by the County and recorded in Land Records by the County Clerk of the Courts. Once the processing is completed, the recorded Satisfaction of Lien document is mailed to the property owner on record at the time of payoff.
When early payoff of a fixed term assessment is desired, a payoff balance can be obtained from the MSBU Program by email or phone (407)-665-7178.
Variable rate assessments are satisfied when annual property taxes are paid. Satisfaction of lien documentation is not distributed for variable rate assessment.
When the closing cost associated with a property sale is calculated, questions often arise as to who (buyer or seller) should be financial responsible for various expenses. Property taxes and assessments are often included in closing costs and settlement negotiations. Given the terminology differences regarding property taxes (ad valorem taxes) and assessments (non-ad valorem assessments), and the differences as to how the two are levied and applied to operating budgets, the concepts can be a bit confusing. To challenge the situation further, there are different types of non-ad valorem assessments (capital and variable rate) that yield different implications regarding the amount posted to the property tax bill. The following clarification is offered to assist property owners and prospective owners in making closing cost decisions:
A fiscal year is different than a property tax year.
The fiscal year (budgetary/financial operations) for Seminole County spans from October to September.
A property tax year spans from January to December of any given year with taxes collected in arrears.
The assessment period for a variable rate assessment is not the same as the property tax year.
The assessment period for a variable rate assessment can be for a fiscal year (budget year) or calendar depending on the specific assessment.
Variable rate assessments are collected in advance while the property taxes are collected in arrears.
Capital assessments are either paid in full to the Board of County Commissioner through the MSBU Program or are collected via annual installment payments via the property tax bill.
Non-ad valorem assessments and installments payments are due when property taxes are due & paid.
The property taxes collected via the 2019 Property tax year are for tax year 2019 [Jan 2019 – Dec 2019] and are due March 2020.
Examples of Variable Rate Assessment & Service Year:
A street lighting assessment billed via the 2019 Property tax bill is for the operation of street lighting equipment during the fiscal year beginning October 1, 2019 and ending September 30, 2020.
A lake and aquatic vegetation management assessment billed via the 2019 Property tax bill is for services to be provided during the fiscal year beginning October 1, 2019 and ending September 30, 2020.
The residential solid waste management assessment billed via the 2017 Property tax bill is for the collection services & disposal facilities to be provided during calendar year 2020 from January 1 through December 31.
Examples of Capital Project Assessments
A capital assessment installment billing included on the 2019 Property Tax bill for wall construction represents a scheduled installment payment due towards repayment of a capital assessment that was levied when the wall project was completed. The amount of the installment and the number of annual payments was determined when the assessment was levied.
For more information regarding how assessments and property sales impact each other, please email or call the MSBU Program at (407) 665-7178.