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A North Carolina community is pushing back after homeowners say they were hit with a massive increase in homeowners association (HOA) fees that many say they simply can’t afford.
Residents of the Magnolia Cove subdivision in Sherrills Ford told WSOC-TV (1) that their monthly HOA dues are increasing from $350 to $1,250. On top of that, homeowners are also facing a $10,000 special assessment.
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“I spend nights crying because this is just ruining my life,” homeowner Jill Menson said. “Not what we signed up for.”
The fee increase is the latest chapter in a years-long dispute with the HOA and the neighborhood’s developer, Aaron Guess, of Story Homes (2).
In 2022, several homeowners told WCNC Charlotte (3) they purchased homes after being promised amenities including lawn maintenance, a community pool and centralized mailboxes. Years later, they say some of those amenities still haven’t materialized. At the time, residents said that each household has contributed about $1,200 toward the planned pool.
Some residents also told the station they’ve had to drive an eight mile round-trip to collect their mail because community mailboxes have yet to be installed.
Guess has also faced regulatory and legal challenges unrelated to the current HOA fee dispute.
In 2021, North Carolina’s Licensing Board for General Contractors suspended his contractor’s license (4) after finding he failed to disclose information during a license renewal. Guess’s attorney said at the time that the board had cleared him of all contested allegations and that the remaining issue stemmed from a clerical error, adding that the company intended to appeal the penalty.
Moneywise reached out to Guess for comment, but did not receive a response in time for publication.
Homeowners are questioning how HOA money is being spent
Residents said that HOA dues were just $158 a month four years ago. They also claim the neighborhood’s developer serves as HOA president and say there are now only about 20 homeowners in the 80-home community, with many properties becoming rentals.
The lack of clarity surrounding rentals and HOA dues has led to litigation.
“Because of the lack of transparency, there is litigation that’s ongoing, and that litigation could have been stopped just by answering questions,” homeowner Mike Brokaw told the station.
According to a statement given to WSOC-TV, HOA attorney H. Weldon Jones III said the higher assessments are necessary to adequately fund the association after years of delinquent assessment payments by some owners.
Homeowners also told the station they won’t be able to vote on the increases. The next HOA meeting will be held virtually, with questions to be submitted in advance.
Homeowners with significant equity may have another option — a home equity line of credit (HELOC) (5) or home equity loan. These types of loans can provide access to cash for large, unexpected expenses, often at lower interest rates than credit cards or unsecured personal loans.
Having access to your home equity can help cover expenses such as a special assessment, major home repairs or other large bills without immediately resorting to higher-interest borrowing.
If you need access to your home equity, AmeriSave offers a flexible HELOC that lets homeowners borrow as needed during a draw period, making it useful for renovations or debt consolidation. The application is available in 49 states, including Washington, DC.
It’s a good fit for borrowers who want convenience and flexibility rather than a large lump-sum loan upfront. You can draw funds only when you need them, so it’s useful for ongoing or unpredictable costs. Interest is charged only on what you use, and you repay the balance over time. It’s essentially a flexible credit line secured by your home, delivered through a mostly online application process.
While homeowners can’t control every unexpected expense, they often have more control over the bills they pay every month. Reviewing those recurring costs can uncover savings that help soften the financial blow.
Find ways to save on other costs
Unexpected homeownership costs can’t always be avoided, but there may be opportunities to lower other recurring household expenses.
If it’s been a while since you last compared home or auto insurance quotes, you could find similar coverage at a lower price. Even modest monthly savings can help strengthen your budget over time and leave more money available for unexpected expenses.
But insurance is just one piece of the puzzle. A closer look at your overall budget may show you other expenses that can be trimmed or outright eliminated.
Budgeting tools can help uncover even more savings
A detailed budget can make it easier to build an emergency fund over time by identifying money to redirect toward savings each month.
Monarch Money’s expense tracking system makes managing your finances easier. The platform seamlessly connects all your accounts in one place, giving you a clear view of where you’re overspending.
By linking your credit card accounts, you can monitor your payment progress in real-time and set specific goals to get out of credit card debt faster.
Of course, even the best of budgets can’t always prepare you for an emergency expense. Nonetheless, you can still prepare by redirecting your savings into an account that makes your money work a little harder for you while it sits.
Keep your emergency fund accessible while it grows
It’s a good idea to keep your emergency funds in a high-yield cash account where they remain readily accessible while continuing to earn interest. This is because, over time, inflation can erode the purchasing power of the money you have locked away.
Years after you’ve put away six months’ worth of expenses, you want to know that those six months are really still covered. And they might be able to help cover sudden increases in fees until you get the chance to argue your case.
A high-yield account like a Wealthfront Cash Account can be a great place to grow your uninvested cash, offering both competitive interest rates and easy access to your money when you need it.
A Wealthfront Cash Account currently offers a base APY of 3.30% through program banks, and new clients can get an extra 0.75% boost during their first three months on up to $150,000 for a total variable APY of 4.05%.
That’s ten times the national deposit savings rate, according to the FDIC’s May report.
Additionally, Wealthfront is offering new clients who enable direct deposit ($1,000/mo minimum) to their Cash Account and open and fund a new investment account an additional 0.25% APY increase with no expiration date or balance limit, meaning your APY could be as high as 4.30%.
Having accessible cash is vital for emergencies, especially if you don’t know all your options right away. However, gaining insight into how to navigate the broader financial landscape during a crisis is key to weathering life’s twists and turns.
A financial advisor can help you evaluate your options
A surprise expense worth thousands of dollars can force homeowners to rethink everything from their monthly budget to their long-term financial plans. A financial advisor can help you crunch the numbers, understand the tradeoffs and build a plan that fits your financial goals. The more runway you develop thanks to smart planning, the better you can weather sudden uncertainty.
Finding the right advisor, however, isn’t easy.
Advisor.com helps simplify the process by matching you with a vetted fiduciary financial advisor in your area based on your financial situation and long-term objectives.
The platform screens advisors for factors including their track record, client ratios and regulatory background. After answering a few questions about your finances and goals, Advisor.com’s AI-powered matching tool connects you with qualified experts who best fit your needs.
Better yet, you can schedule a free initial consultation with no obligation to hire, so you can determine whether an advisor is the right fit before making a commitment.
Once you’ve developed a plan to navigate a large expense, the next step is to identify opportunities to strengthen your finances elsewhere. One good place to start is reviewing your borrowing options before taking on high-interest debt.
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Article Sources
We rely only on vetted sources and credible third-party reporting. For details, see ourethics and guidelines.
WSOC TV (1), (4); Storyhomes (2); WCNC (3); Bank of America (5)
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
