Homeowners in the Magnolia Cove community of Sherrills Ford, North Carolina, are facing a severe financial crisis as their homeowners association (HOA) has doubled monthly fees to $2,500. This increase, set to take effect on January 1, 2027, will require residents to pay $30,000 annually in HOA dues on top of their mortgages, property taxes, and other expenses.
Just five years ago, monthly fees were a more manageable $158. They gradually increased to $350, then to $1,250 earlier in 2026. The board initially considered an even higher assessment of $7,500 per month before settling on the $2,500 figure at an October 26 meeting.
Residents express fear that they will be priced out of their homes. "We are going to be forced out with nowhere to go, because no one is going to get a dime for their houses even if we put them on the market," said Jill Menson, a homeowner who, along with her husband, bought their property anticipating it would be their permanent residence. She also cited frustration over unfulfilled amenity promises, including a swimming pool, mailboxes, and landscaping maintenance.
The dispute appears to be linked to developer Aaron Guess and his company, Story Homes, which reportedly owns most of the properties in the 80-home community and, according to homeowners, effectively controls the association. Complaints about a lack of transparency and broken promises first surfaced in 2022.
The HOA stated that defending ongoing litigation has resulted in significant legal bills, becoming the association's largest budget expense. It also cited years of unpaid assessments from delinquent homeowners. The combination of legal costs and overdue payments is identified as the reason for the fee increase. The association maintains it is a nonprofit and all collected funds are used for community expenses. A proposed budget reportedly allocated approximately $1.1 million of its $2.07 million total to legal expenses.
The board indicated that monthly assessments could decrease once legal costs are settled and outstanding payments are caught up. However, some residents, like Paige Johnson, defend the HOA's actions, stating that those who initiated legal action lost and should now pay their dues. The divisions within the neighborhood have also been a point of concern for resident Duane Johnson.
This situation has also highlighted the extent of HOA powers in North Carolina, where the Attorney General's Office confirmed there are no state statutes limiting annual fee increases. At least one property in Magnolia Cove has reportedly faced foreclosure proceedings due to a lien, though its connection to unpaid HOA assessments is unconfirmed.
The controversy has drawn attention online, with commenters questioning the affordability of such high fees for neighborhood services. The immediate concern for Magnolia Cove residents remains whether they can continue to afford living in their homes.