Participation

What It Means

Participation defines each party’s role in a co-ownership arrangement. It specifies who holds Title, who is on the mortgage, who occupies the property, and what each party contributes financially. Participation is the first alignment area that co-buying groups must address, because every subsequent decision — from Ownership Shares to Shared Expenses to Exit Strategy — depends on how roles are defined.

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Participation is about role specification, not engagement. It does not measure how involved or committed each party is. It classifies how each person is legally and financially positioned within the arrangement.

Asset Side vs. Liability Side

Participation roles fall into two categories. Asset-side roles define who holds legal ownership of the property through title. Liability-side roles define who carries financial obligation through the mortgage or other commitments.

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A party can hold an asset-side role without a corresponding liability-side role, or vice versa. For example, a Co-owner may be on title without being on the mortgage, while a Co-signer may be on the mortgage without being on title. When a party’s asset-side position does not match their liability-side position, this creates an asset-liability mismatch — a condition that increases risk for one or more parties and should be addressed explicitly in the Co-ownership Agreement.

Participation Types

There are nine distinct participation types that can apply to individuals within a co-ownership arrangement:

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Co-owner — holds title to the property, may or may not be on the mortgage.

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Occupant Co-owner — holds title and physically resides in the property as a primary or secondary residence.

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Non-occupant Co-owner — holds title but does not reside in the property. Common in investment-oriented arrangements or when a parent co-owns with an adult child.

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Occupant (non-owner) — resides in the property but does not hold title. May pay rent or contribute to expenses without holding an ownership stake.

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Co-borrower — is jointly obligated on the mortgage. May or may not hold title.

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Co-signer — guarantees the mortgage but typically does not hold title or occupy the property.

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Personal Creditor — provides a private loan to one or more co-buyers, creating a debt obligation outside the institutional mortgage.

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Renter — occupies the property under a lease with one or more co-owners. Does not hold title or share in equity.

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Dependent — resides in the property as a dependent of a co-owner. Has no independent legal or financial role in the arrangement.

Why It Matters

Most co-ownership friction traces back to undefined or misunderstood participation. When parties assume their roles are understood without making them explicit, the result is ambiguity about who is responsible for what — financially, legally, and operationally. Mapping participation for every party before closing ensures that Capital Contributions, ownership shares, occupancy rights, and liability exposure are aligned and documented.

Key Points

• Defines each party’s legal, financial, and occupancy role in the co-ownership arrangement
• The first alignment area co-buying groups must address — all subsequent decisions depend on it
• Distinguishes between asset-side roles (title) and liability-side roles (mortgage)
• Asset-liability mismatch occurs when a party’s title position does not match their mortgage position, increasing risk
• Nine participation types: Co-owner, Occupant Co-owner, Non-occupant Co-owner, Occupant (non-owner), Co-borrower, Co-signer, Personal Creditor, Renter, and Dependent
• Undefined participation is the most common source of misalignment in co-ownership arrangements