🏷️ What Is a Partial Release in Real Estate?

A partial release is a document issued by a lender that removes a specific portion of a property from a mortgage or lien while the rest of the property remains secured by the loan. Partial releases are commonly used in subdivisions, blanket mortgages, and large parcels where individual lots may be sold separately.

How a Partial Release Works

When a property is covered by a single mortgage but divided into multiple lots or parcels, the lender may agree to release one section or lot from the lien after receiving payment. The remaining property stays under the original mortgage.

Typical steps in a partial release:

  • The borrower requests a partial release from the lender.
  • The lender evaluates the remaining property value and loan balance.
  • A payment or release fee may be required.
  • The lender signs a Partial Release of Mortgage or Partial Release of Lien.
  • The document is recorded with the county to update title records.

Once recorded, the released parcel can be sold, transferred, or built upon without being tied to the mortgage.

Why Partial Releases Matter

For Homeowners & Borrowers:

  • Allows the sale of a single lot or portion of land.
  • Useful when subdividing property.
  • Makes development projects flexible.
  • Can free a building, parcel, or structure from the loan.

For Lenders:

  • Protects remaining collateral value.
  • Ensures the loan remains adequately secured.
  • May charge release fees or require appraisal updates.

Example of a Partial Release

Here’s how a partial release typically works:

  • A landowner has a blanket mortgage covering 10 acres.
  • They want to sell 1 acre to a builder.
  • The buyer cannot close because that acre is still tied to the mortgage.
  • The homeowner pays the lender a negotiated amount (or meets loan conditions).
  • The lender issues a Partial Release of Mortgage for the 1 acre.
  • The sale proceeds and the remaining 9 acres stay under the mortgage.

This process is common in developments, farmland, and multi-lot properties.

Partial Releases for FSBO Sellers

  • Essential if you’re selling part of your land while retaining the rest.
  • Buyers often require confirmation the parcel is released before closing.
  • Failure to secure a partial release can block or delay a sale.
  • A fresh survey or legal description may be needed for the release.