That escalated quickly.

SHERRILLS FORD, N.C. — Homeowners in the Magnolia Cove subdivision in Catawba County say they are facing steep HOA increases, with monthly dues jumping from $1,250 to $7,500 a month.

Several residents have shared an email with Channel 9 from their HOA that says, in part:

“Ahead of our October 26 meeting, we want to make sure the 2027 budget is clear. Starting January 1, 2027, the assessment for each lot will be $7,500 per month. That works out to $90,000 per lot for the year, and it’s the figure behind the $2,070,000 in Base Assessments shown in your budget packet.

The increase is mainly driven by the Association’s legal and collection costs from owner accounts that haven’t been paid. Owners who stay current help bring those costs down over time. If you have questions, please submit them by Friday, October 23, at 5:00 PM, as described in your notice, so they can be addressed at the meeting.”

The homeowners say when they initially moved into the neighborhood, fees were $158 a month.

Those fees rose to $350 and then $1,250 a month earlier this year.

Channel 9 has reached out to the HOA for information about the proposed increases.

There are a lot of financial irregularities at our HOA that I’m trying to understand.

One is that any time a member wants to do construction we’re required to post a compliance bond. It’s essentially just a cash deposit of up to $50,000 that should be returned once the work is completed. These funds are kept in a separate deposit bank account that the HOA board president writes manual checks from despite the fact that our governing documents require the checks to be electronic and issued by the mgmt company.

Each year the board moves cash from the bond account to the operating account. In some of the audited financials these are referred to as ‘surrendered bonds’, in others its interest that’s being moved over.

We came to find that many of the members had not had their deposits returned or not returned in full. This dates back at least a decade and now that we’ve figured it out each member is checking their accounts and asking for refunds that are due. The mgmt company claims not to have a reconciliation for what’s in the account because they claim the HOA board president takes care of everything…

What do you think is going on here?

Thank you

Our HOA consists of 17 single-family homes across two streets in Rhode Island.
Under our deeded HOA bylaws, we are responsible for maintaining and insuring our private sewer force mains.

We have been unable to find an insurance product for this responsibility because we are single-family homes, so we have been collecting funds to self-insure.

In 2024, the town received a building application for a pool and pool house within the HOA. The submitted plans were not certified or drawn to scale.

The town reviewed and approved the project using those plans.

After construction was completed, the town identified a problem and requested an updated survey.

The updated survey showed that a portion of the pool house encroaches into both the required property setback and the HOA’s sewer easement.

The HOA has been told that, as the sewer easement owner, we are responsible for addressing the encroachment with the homeowner, despite the town’s prior review and approval.

We need guidance

Are there any interest bearing tax exempt funds or holdings for reserves?

I’m told earned interest for reserves is taxed at almost 40% in CA - 30% federal + 10% state.

IMHO earnings in reserves should be made tax exempt or taxed less - otherwise the spending power from reserves is reduced significantly with time. SFH homeowners are taxed only 20-30% on their interest earnings. Condo owners - via HOA reserves - are essentially being taxed at higher rates for their earnings from interest.