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GREENSBORO — Both sides stand to lose money in the battle over a dam that divides them.

In northwest Greensboro a small pond near Guilford College has abutted eight homes near New Garden Road for at least 50 years .

In the past decade, Portrait Homes developed property across the pond in the Coble Farms II subdivision.

But state regulators say the dam that is holding water for the pond needs work. The N.C. Department of Environment and Natural Resources mailed a notice of deficiency to the homeowners association and majority owner of the dam, Coble Farms II.

Fixing the dam would cost up to $150,000, but some in the subdivision are looking to drain the pond and eliminate the problem. That option also would hurt property values for the neighbors living next to the pond.

What would happen next is unclear.

“So what do you do with a dock in the middle of a drained hole?” said Gary Bouton , who lives on Woodbrook Drive, next to the water and closest to the dam. Coble Farms II can be seen from his back yard on the hills across the pond below.

He also received a letter from the state.

“There are eight property owners who are very disturbed,” Bouton said of his neighbors on Woodbrook Drive along the pond. “To drain the lake, can you imagine what that would do to our property value?”

The homes along the lake with Bouton are worth $169,000 to $250,000 apiece. By comparison, homes in Coble Farms II have sold for roughly $200,000 each.

The future of the issue is uncertain because no formal actions have been taken to fix the dam or drain the lake — both of which would require permits and plans. But if problems linger long enough the state could begin to fine the dam owners up to $500 a day.

State officials haven’t threatened to fine owners, and the majority owners of the dam are still weighing options.

“I haven’t heard,” said Bill Royal , who lives on Gretchen Lane in Coble Farms II.

The dam holds back a pond roughly 5 acres in area and about 20 feet deep .

“I think we own 85 to 90 percent of the dam,” Royal said. Bouton maintains the remainder of the dam on his property.

His neighbors and Coble Farms II share ownership of the pond itself.

But the residents of Coble Farms II say Portrait didn’t let them know they were responsible for upkeep.

“They went out of business and left us holding the bag,” Royal said of the company that closed its office in Greensboro this past year.

A spokesman from Portrait did not comment on the issue Friday .

Fixing the dam would cost about $3,000 per homeowner, according to a memo from Lambeth Management, which administers the Coble Farms II homeowners association .

Messages left with Lambeth last week were not returned.

If the pond is drained, neighbors on the other side of the pond worry their property value would drop.

From the new development, just three homes have clear sight of the pond. The dam was referred to as a plat number under the common area included in closing paperwork for homeowners, but it was not explicitly referred to as a dam or pond.

Steve Freese , president of the Coble Farms II homeowners association, would not comment.

He acknowledged, though, that the association was considering options including repairing the dam or draining the pond.

In 2003 the state notified Portrait of poor conditions at the dam. It was not considered a high risk, but needed upkeep such as cutting brush and trees from the top, clearing an emergency spillway, removing burrowing rodents and clearing clogged drainpipes for the lake.

The state sent notices again in 2004.

In 2007, Portrait installed a new spillway pipe without approval from the state.

The state sent a notice of deficiency in response and said water was seeping through the dam along the pipe.

“With a notice of deficiency, there is more than just normal routine maintenance that may be required,” said Steve McEvoy , state dam safety engineer for the N.C. Department of Environment and Natural Resources.

“We’ve asked that the owners obtain an engineer to certify the repairs,” McEvoy said, “and show the dam was repaired in accordance with the administrative code.”

Contact Gerald Witt at 373-7008 or gerald.witt@news-record.com