Willow and Hearth

A New York appeals court has ruled that a homeowners association cannot tack on legal fees to a foreclosure debt after the homeowner has already paid off the balance she agreed to. The Appellate Division, First Department decision, issued April 14, 2026 in Shorehaven Homeowners Assn., Inc. v. Campbell, wiped out nearly $4,000 in fees the association tried to add after homeowner Sherese Campbell satisfied her debt years ahead of schedule.

Key Points

• Campbell’s unpaid common charges and assessments had reached $40,484.59 by December 2024, according to the official court record.
• After two payments, the balance fell to $21,455.11, and on March 6, 2025 she signed a settlement agreeing to 24 monthly installments of $893.
• Instead of waiting out the two-year plan, Campbell paid the full remaining balance in eight installments between April 1 and May 12, 2025.
• Shorehaven then billed her $3,928.30 in publication and legal fees for costs it said accrued after May 12.
• The court ruled those fees uncollectible and the foreclosure lien void.

The dispute turned on what the settlement agreement actually said. Campbell’s payment plan, negotiated to resolve the HOA’s foreclosure action, did not reference attorney’s fees and never incorporated the association’s bylaws, including the provision requiring members to cover collection costs, according to the court’s opinion. When Shorehaven tried to bill her anyway for fees racked up after she’d already paid the agreed-upon amount, the courts found nothing in the contract that let it do so.

The ruling leaned on a centuries-old property law concept called the equity of redemption, which the law firm Freiberger Haber explains gives a property owner the right to stop a foreclosure sale by tendering full payment of what’s owed before the sale happens. New York courts have long held that this right can’t be waived away in a mortgage or lien agreement. The Appellate Division found that Campbell’s payments constituted exactly that kind of unconditional tender, and that once Shorehaven accepted the money, it gave up any claim to push the foreclosure forward or bolt on extra charges the settlement never authorized.

According to a roundup of recent HOA legislative rulings from community-association services company Associa, the Shorehaven decision is one of several 2026 cases testing how much authority HOA boards actually have once a signed settlement is on the table, echoing findings elsewhere that boards can’t stretch bylaws to cover situations the underlying contract never addressed.

For homeowners working through their own HOA payment plans, the case underscores a simple point with real financial teeth: what the settlement document says, and doesn’t say, controls what the association can charge later. An agreement silent on attorney’s fees isn’t an invitation to add them once the ink dries.