Can we allow our daughter to build a permanent residence on the property that is already being used as security for our current home mortgage?

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Can we allow our daughter to build a permanent residence on the property that is already being used as security for our current home mortgage?

We own 14.41 acres; 1 acre free and clear and 13.42 acres are used as security on the new home we built 3 years ago. The County now regulates to add an additional residence, you must have a minimum of 2.5 acres. I only own 1 outright. Our plat would have to be redrawn to

Asked on April 17, 2019 under Real Estate Law, Georgia

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 2 years ago | Contributor

If you have to re-plat, you can't do this: re-plating would reduce the amount of acreage providing security on the mortgage, but you cannot reduce the lender's security without their consent or agreement, since you have no power to unilaterally (without their consent) alter the agreement (the mortgage) between you and them.
You can build a home partially on the land they have a security interest in, but bear in mind that if you default, they will get that portion (if any) of the home on the land on which they can foreclose. However, their having a security interest does not bar you from using or improving, including building on, that land, so long as you do not impair their security.


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