North Carolina homeowners fear being forced to move after HOA monthly fee doubles to $2,500
Homeowners in the Magnolia Cove community in Sherrills Ford, Catawba County, North Carolina, which has about 80 homes, said the community HOA voted this week to raise the monthly fee from $1,250 to $2,500, and the new rate is expected to take effect on January 1, 2027. Homeowner Jill Menson said the monthly fee was only $158 about five years ago, then gradually rose to $350, then to $1,250, and was once accompanied by a $10,000 special assessment. She said they would be forced to move, with nowhere to go, because even if the house were listed for sale, it would not sell for a penny. Another anonymous homeowner said they were worried that after January next year they would have to give up the property and lose their equity.
The HOA initially proposed raising the monthly fee to $7,500 ($90,000 a year), then adjusted it to $2,500. In a statement, the association said the increase was mainly due to legal and collection costs arising from homeowners’ unpaid fees, as well as lawsuit expenses from a lawsuit filed in early 2024 by more than 20 homeowners against the HOA and some board members. The association said the related homeowners’ claims had been voluntarily withdrawn or dismissed by the court, and in the counterclaim defamation case, a jury had ruled against some homeowners; legal expenses are currently the largest single item in the budget. The association stressed that it is a nonprofit organization and does not profit from assessment fees, and that fees may be lowered after legal expenses end and arrears are settled. The North Carolina attorney general’s office said state law does not set a cap on annual HOA fee increases, but the board must comply with governing documents.
Homeowners said the HOA is controlled by developer Aaron Guess (Story Homes) because he holds a majority of the community’s properties. Some homeowners worry that if they cannot afford to pay, liens will be placed on their properties and they will face foreclosure or bankruptcy risk, and that the high fees make the homes difficult to sell. The HOA said it had tried to contact Guess but received no response.
Original sources
WSOC-TV report (Dave Faherty, October 27, 2026): https://www.wsoctv.com/news/local/homeowners-face-2500-hoa-fees-say-they-cant-afford-stay/4BA7LVZWZZHM7ATJQ3AAG4X2RM/
Realtor.com report (October 29, 2026): https://www.realtor.com/news/trends/hoa-fees-magnolia-cove-north-carolina-foreclosure/
ABAB AI Insight
This case illustrates the cost transmission mechanism of developer-controlled HOAs under the combined pressure of litigation and delinquency. Since 2022, Magnolia Cove homeowners have been complaining that the developer failed to deliver on promises such as the pool and mailboxes, and have questioned financial transparency, ultimately escalating into large-scale litigation. The HOA greatly increased the assessment fee on the grounds that the losing parties in the lawsuits must bear legal costs and that the community as a whole had unpaid fees, while current North Carolina law imposes no hard cap on increases and only requires compliance with governing documents, leaving homeowners with little effective check when the developer holds a controlling ownership stake. The high fees not only directly increase holding costs, but may also amplify losses by reducing the liquidity of the property, creating a predicament of being unable to afford the payment and unable to sell. Similar cases have precedent in some developer-led communities in the United States, and the core points of contention usually center on the control structure, rules for sharing litigation costs, and whether state-level HOA regulation should add caps on increases or mandatory transparency requirements.