I'm in a bit of a dilemma. The house we bought has a detached garage supplied by 12/3 UF with ground. The previous owner/handyman set this up as a multiwire branch circuit (MWBC) with a twist: one of the conductors is fed from the main panel in the basement to create a 20A circuit in the garage for plugs, but two other conductors in the 12/3 UF are used as switch legs for a 3-way switch, enabling the garage lights to be turned off either from the house or from the garage. This leaves the equipment grounding conductor to be used as a shared neutral for both the plugs and the lights in the garage – definitely not code compliant, probably a bad idea all around. The EGCs of the NM cables that feed the lights and plugs in the garage are tied together in a box in the garage, and not bonded to the makeshift neutral (EGC of the 12/3UF), as far as I can tell – so there is no true safety ground for the garage outlets.

I am not ready to dig up the yard and re-feed the garage, which will probably be the ultimate solution: reclaiming the 12/3 for only the lights, and adding thicker conductors in the trench for a proper subpanel in the garage. I also realize that the easiest short-term solution would most likely be to rearrange the existing wiring connections to make either a single 20A circuit on a 3-way switch for all lights and plugs in the garage, or a single always-on circuit in the garage, to which I could connect the plugs and the lights, with a switch in the garage for the lights. The first of these choices is not an option because the garage door opener needs to be always live for use with the car remote, and the second choice, though preferable, loses the significant advantage of the 3-way switch.

In general, I'm ok with using the ground of the 12/3 UF as neutral on a temporary basis because of the tough nature of UF cable, and because it hasn't caused any obvious problems yet. I'm thinking of driving a grounding electrode at the garage and connecting the equipment grounding conductors of the branches in the garage to that electrode, which wouldn't be bonded to the neutral. I know this would not be code-compliant, but I wonder if it would be an improvement. I'm also wondering if GFI protection of either/both of the branch circuits in the garage would be possible and preferable – though I know that using GFIs on MWBC creates new issues.

Again, I'm not yet ready to dig up the existing cable, and not willing to run anything overhead.

Thoughts?

Thanks!
Benjamin