In real estate finance, a release clause is a provision in a blanket mortgage or other blanket encumbrance that permits the release of individual parcels from the lien. The release occurs upon payment of a specified amount toward the underlying debt.
Release clauses are commonly used in subdivision or development financing, where portions of the property are sold over time. By allowing parcels to be released incrementally, the clause facilitates sales while maintaining the lender’s security interest in the remaining property.
