a quick explanation of the foibles of the E46 handbrake and its design and how to rectify it..
amongst other things problems can start with seized handbrake actuators (expanding locks) on the rear hubs this causes them not to release properly or apply properly as a consequence you start adjusting the handbrake up to make it work better which then makes it worse to the point it dont work at all and it wears ya handbrake shoes away and buggers everything..
corroded inner hubs also can cause crap handbrakes or poorly adjusted at the hub adjusters or the handbrake end adjusters
E46 handbrake is notorious for being poor if its not kept on top of..
actuators are cheap to buy new, they are only 2 peices of hinged monkey metal its cheaper to wire brush em up and a blob of coppaslip grease on the hinge part tho (this is the bit that seizes on them)..
description of the E46 handbrake
ok then the rear set up is as follows to remove...
handbrake off in the cabin and adjusters released on handbrake under the handbrake gaitor.. (10mm long reach socket i think IIRC..)
theres 1 shoe adjuster on each wheel its a toothed wheel that you flick round with a small screwdriver thru one of the wheel bolt holes.. drivers side its at around 11 oclock and its up on the wheel to release it off.. passenger side its at around 1 oclock and its down on the wheel to release them off..
you then have to remove the 1 brake disc securing bolt and the caliper..the disc then should come off prolly have to batter it off with a rubber mallet..
exposed then is your handbrake shoes and actuator with the cable attached to it will look like this below: at the bottom is the adjuster at the top is the actuator they are in the positions mentioned above on an E46 and not in the picture.. actuator is at around 7 0r 8 oclock passenger side 4 or 5 oclock drivers side looking at it you will see this with disc off.they (the shoes) are secured with 2 spring loaded fasteners to the backplate..
if you are going to do this job once fitted you adjust shoes all the way up on the rear adjusters to lock the disc then 2 to 3 clicks back on the adjusters or so discs spins freely.. then adjust handbrake end accordingly for right amount of clicks..
the cable just unclips from the expanding lock actuators its only held in place by a spring loaded bit of metal on the actuator itself..
a cheap single led mini torch is very handy for shining thru the bolt hole when trying locate the hub adjusters
nearly all modern BMW's have this recognizable setup with the same or similar parts...
Expanding lock actuators are reasonably priced at a main dealer plus you can get a further 15% discount and free delivery via our forum vendor Harry Fairbairn BMW so ya might as well just replace them as get more problems again at a later date