Penalty for sub-dividing a mortgaged property without mortgagee permisssion

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Penalty for sub-dividing a mortgaged property without mortgagee permisssion


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If the title on the property has changed (i.e. you sold a portion to someone), then there is most likely a clause in your mortgage documents that is called a “due on sale clause.” This means that the lender could require you to payoff the mortgage in full. This may require refinancing.

At least, you would be required by law to payoff the value of the portion that you sold from the proceeds of the sale. Whether that will require additional filing of paperwork or refinancing, I am not sure. Your best bet would be to call your bank and check.

Answered 11 months ago

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