Q My daughter-in-law has been approached by her neighbour who would like to purchase her garage which is in a small compound. She asked her mortgage lender whether she could have the garage removed from the deed so she could sell it privately. They refused saying that the mortgage was granted on the whole property which includes the garage. The value of her home far exceeds what she owes. Is there anything she can do?
JL

A Unfortunately, if you have a mortgage on a property, you can’t sell part of it – whether that’s a garage or outhouse or part of the garden – without the consent of your lender. That’s because a lender has a charge over the whole of the property and if you were to sell off part of it, the lender would have to agree to release that part of the title to the property (what you call the deed) from the charge which is what they have as security for the mortgage loan.

A lender is unlikely to give consent to a part sale if the value of the property minus the part being sold off is less than the mortgage loan. A lender is also unlikely to give consent if – assuming there was no longer a garage – the mortgage would represent a higher percentage of the value of the property than the percentage of the property’s value when the original mortgage was granted.

However, if, as you say, the value of your daughter-in-law’s home far exceeds the amount remaining on the mortgage, it might be worth her while getting a valuation of her property done assuming no garage and going back to her lender to see if it was willing to reconsider.

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But if the reason the lender won’t give consent is that there is a “restrictive covenant” included in the title which prohibits the separation or sale of the garage from the main part of the property, there’s nothing your daughter-in-law can do. But given that having a garage typically adds around 5% to the value of a property, selling the garage to her neighbour might not be the best thing to do anyway. If she is interested in the cash injection that selling her garage would give her, she could instead increase her mortgage – either with her current or a new lender – but hold on to the garage.

Muddled about mortgages? Concerned about conveyancing? Email your homebuying and borrowing worries to Virginia Wallis at virginia.wallis.freelance@theguardian.com



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