When the home is sold, how the proceeds are split. The Passive Owner is paid their full recorded interest first (priority); this is also how a bank loan works — the loan and all costs are paid first, and the owner gets the rest. The Resident Owner receives the remainder and bears the costs of sale. This priority is a big part of why default risk is so low for the Passive Owner.
The recorded position from the register. The Resident Owner's share is the remainder (property value minus the Passive Owner).
The Passive Owner is paid their full recorded interest first (priority). The Resident Owner receives the remainder. The Resident Owner instigates and controls the sale (unless in default) and bears all costs of sale.
Click on the examples to see how the proceeds are split.