Property & Real Estate Flashcards
What are SID’s & LIDS?
SIDs and LIDs
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 right away and add the cost of improvements to the sales price of each lot or Las Vegas 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 community and paid off on a semi annual basis over a pre-determined number of years.
These assessments are known as Special Improvement Districts and Limited Improvement Districts. 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.
