I ran into this error when trying to create an addon domain in cPanel. An strace showed it hung up on the path “/” before timing out and then giving the error:
Unable to update the quota file (.ftpquota): [Permission denied]
Something is apparently starting at / to get to .ftpquota. The best way to remedy this is to fix the permissions of / with the following command:
chmod 755 /
Now when you create a new addon domain, it should work fine.