Equity Sharing 101: Sample Transaction
Equity sharing sounds like a simple form of shared ownership. Investor and occupier each contribute to the down payment, occupier lives in the home, keeps it up, and makes the monthly payments, and the parties share the home appreciation. But closer analysis reveals many complex questions. This pamphlet covers the basics: ownership and possession, financial contributions, repair and improvement, and owners’ rights at the end of the equity share.
This material has been excerpted from The Equity Sharing Manual, first published by John Wiley and Sons in November 1994 (order the book). While it remains useful and relevant, it is not as current and complete as the more recent article Questions and Answers on Equity Sharing, and we suggest reviewing that article before reading this one.
The Sample Equity Sharing Transaction
The illustrations and examples in this pamphlet are based on the equity sharing shared ownership of 3321 Elm Street by seller/investor Laura Davidson and occupiers George and Mary Smith. Laura paid $150,000 for Elm Street four years before the equity share, and owed about $115,000 on her mortgage. The Smiths were renters with accumulated savings of $15,000. The parties agreed on a price of $200,000, and a new $180,000 40-year adjustable rate mortgage. The Smiths contributed $14,500 cash, and Laura contributed $500 in cash and $10,000 in equity. When we say Laura contributed $10,000 in equity, we mean she received $10,000 less from the sale than she would have without equity sharing.
Example–Sample Transaction Assumptions
|Costs of Elm Street|
|Closing Costs (loan fees, appraisal fees, title insurance, inspections, and escrow fees)||4,000|
|Payment For Elm Street|
The parties agreed to Ownership percentages of 55% for the Smiths and 45% for Laura. At the end of a five year term, the Smiths could become sole owners of Elm Street by repaying Laura’s contributions plus 45% of the appreciation. If there was no buyout, the property would be sold owner contributions returned, and profits split 45/55.
Do equity sharing owners share all costs?
Equity sharing owners share the initial costs of buying the property, including down payment and closing costs. These costs are called “Initial Capital Contributions”. The owners also share the costs of major repairs and improvements and these are called “Additional Capital Contributions”. Initial and Additional Capital Contributions can be shared according to any formula the owners devise, and are reimbursed before any profits are allocated. Other costs, including mortgage payments, property taxes, insurance and routine maintenance, are not shared; they are paid by the occupier. Unlike Capital Contributions, these payments are not reimbursed.
Which costs are considered Initial Capital Contributions?
The list of costs considered Initial Capital Contributions by the Elm Street owners is typical:
Example–Down Payment and Closing Costs
|Loan Points (fee to the lender based on the loan amount–here 1% of $180,000)||1,800|
|Other Bank Fees (including appraisal)||250|
|Title Insurance (for the lender and the owners)||850|
|Recording and Notary Fees||50|
Frequently, owners are required to pay an amount for insurance and property tax when they first purchase the property. Do not include these costs as Initial Capital Contributions because they are not part of the purchase costs; rather, they are prepayments of the costs of owning the property.
When the equity sharing involves a seller/investor, the owners must decide if the seller closing costs will be considered part of the Initial Capital Contribution. Seller closing costs are those transaction costs that are customarily paid by sellers. They often include sales commissions and transfer taxes (also called “stamps”), but this custom varies from place to place and is always subject to the parties own negotiations. Including seller closing costs as Initial Capital Contribution means that the occupier will pay extra closing costs just because he happened to equity share with a seller as opposed to another investor. Excluding these cost means that the seller/investor will pay the costs twice: once at the start of the equity share, and again at the time of buyout or sale. Balancing these concerns, we recommend that seller closing costs not be considered part of the Initial Capital Contribution.
After you agree which costs are considered Initial Capital Contributions, you must decide how much each owner will contribute. The Elm Street owners’ allocation of Initial Capital Contributions is typical for a buyer/seller equity share. The Smith’s made a 5% down payment ($10,000) and paid the buyer closing costs ($4,000). The parties split the attorney’s fees ($500 each). Laura contributed 5% of the purchase price ($10,000) in equity meaning that she received $190,000 in sale proceeds rather than the $200,000 that she would have received if she had not equity shared.
What if the occupier has little or no down payment?
The investor’s risk increases as the occupier’s Initial Capital Contribution decreases. An occupier who makes little or no down payment has little or no equity in the early stages of the equity share. This lack of equity increases the likelihood that the occupier will break his promises to the investor because the occupier has little or nothing to lose. It also worsens the consequences to the investor when the promises are broken because the investor cannot offset any of his losses with the occupier’s equity.
Example–Occupier Down Payment and Investor Risk
Suppose the Smiths make no monthly payments and then abandon Elm Street three months after closing. Losses would include all of the expenses of ownership (mortgage, insurance, property tax and maintenance), the costs of the recovery process (attorney’s fees, arbitration fees, court costs), and any resale expenses (commissions, closing costs).
|Resale of Elm Street||$200,000|
|Loan Repayment (with extra bank fees)||<183,000>|
|Costs of Resale (6.5% of $200,000)||<13,000>|
|Three-months Ownership Expenses||<4,602>|
|Bank Late Fees||<102>|
Laura would lose $14,204–her Initial Capital Contribution of $10,500 plus the additional $3,704–and the Smiths would lose their Initial Capital Contribution of $14,500. Compare the situation if the Smiths had made no Initial Capital Contribution: Laura loses $28,704–her Initial Capital Contribution of $25,000 plus the addition $3,704–and the Smiths lose nothing.
Investors who equity share with little or no occupier Initial Capital Contribution deserve a very high percentage of the appreciation in exchange for the high risk. Take special care to investigate the creditworthiness and job stability of the occupier and require that the occupier contribute to a “Reserve Fund”.
What about investments after purchase?
Occupiers continue to invest time and money in the property throughout the equity share, but no investment should be reimbursable unless the owners specifically agree in advance to consider it an Additional Capital Contribution. An agreement to make a particular investment reimbursable may be made before or during the equity share, but must always precede the investment. This rule insures that both owners will have control over which investments are reimbursed, and that neither can make bad or inefficient investments at the expense of the other.
Example–Reimbursement Without Advance Agreement
Suppose the Elm Street agreement allowed the Smiths to make any improvements they wanted at their own expense, but provided that they would be reimbursed for the cost of these improvements at the end of the equity share. Mary Smith, who has very peculiar taste in furnishings, decides to have her friend Joan, who just got her contractor’s license, install new kitchen cabinets. They choose purple veneer with gold shark’s tooth handles. The cabinets cost $30,000, and the installation is not that bad for a first attempt.
At buyout time, Elm Street appraises for $225,000. The appraiser is not sure what the kitchen looked like before, so she does not know whether the new cabinets increased the property value. Off the record, she comments that no kitchen cabinets could add $30,000 or more to a property value, and that these poorly installed and ugly cabinets probably lowered the value. This bad investment, over which Laura had no say, will cost her $13,500 (45% of $30,000) plus any loss in property value.
This example shows the unfairness of making one owner pay for decisions she did not make. Avoid this unfairness by requiring both owners to consent before any expense becomes reimbursable. If you agree on specific Additional Capital Contributions before purchase, included them in the equity sharing contract. Otherwise, create a short written contract confirming that an investment will be considered an Additional Capital Contribution. Establish a firm rule that no investment is reimbursed absent a written contract.
Do owners receive interest on money invested after purchase?
Interest on Additional Capital Contributions is not justified where the contribution is made according to ownership share. In that case, the “interest” can be the owners’ shares in the property value increase resulting from the contribution. Interest is justified where the contribution is not made by ownership share. In that case, the owners’ shares in the property value increase will not be proportional to their contributions and paying interest can partially equalize the disparity. Also note that interest on money invested at the time of purchase (as opposed to afterward) is fatal to equity sharing because it turns the arrangement into a loan for tax purposes and deprives the owners of the tax benefits of equity sharing.
Example–Interest on Additional Capital Contributions
Suppose the Elm Street owners install a new bath at a cost of $10,000. Assume the bath adds $15,000 to property value, meaning the owners made a profit of $5,000 or 50% on their investment. Laura and the Smiths share in this profit 45/55. If they split the cost of the bath 45/55, they would each make a 50% profit on their investment. But what if the Smiths paid the entire $10,000 cost of the bath? If they received only 55% of the profit (.55 x 5,000 = 2,750), their return would have dropped from 50% to 27.5% (2,750/10,000). At the same time, Laura would make an extra $4,500 even though she invested nothing in the bath. One theoretical way to deal with this unfairness would be to give the entire $5,000 profit to the Smiths. But in practice, it is not possible to determine that the a bathroom added a particular amount to property value. Providing the Smiths with interest on their $10,000 investment is the only practical way to compensate them.
Is the occupier reimbursed for monthly payments?
The occupier is not usually reimbursed for monthly payments and takes the risk that these payments will vary from month to month or increase over the equity sharing term. Avoiding these risks is one of the main incentives for an investor to participate in equity sharing rather than purchase rental property.
An occupier should be reimbursed when his monthly payment, even after consideration of tax benefits, is substantially higher than rent for similar property. This would be true if the owners borrow a very large portion of the purchase price (90% or more), or if the equity share property is located in an area where home prices are relatively high and rents are relatively low. In these situations, the reimbursed portion of the monthly payment is called a “Monthly Capital Contribution”. Most equity sharing owners agree on a fixed Monthly Capital Contribution amount based on the anticipated monthly payments. The agreed amount is binding regardless of what the actual payments turn out to be. This approach provides the occupier some relief from anticipated high monthly payments, but places the risk of increases on their shoulders. Here is how the Elm Street Owners calculated the Smith’s Monthly Capital Contribution.
Guide–Calculating Monthly Capital Contribution
Step 1: Calculate total monthly payments.
|Mortgage Interest at 6.25%*||$938|
|Mortgage Principal Reduction*||84|
|Homeowners Association Dues||100|
|Total Monthly Payment||$1,354|
* The breakdown on the mortgage payment between principal and interest will change over time. This example uses the breakdown of the first payment.
Step 2: Calculate after-tax monthly cost.
|Tax-Deductible Property Tax||202|
|Portion Lost (due to rent payment to investor)*||<220>|
|Net Occupier Deduction||$920|
|Anticipate Tax Savings ($920 x .33**)||306|
|After-tax Cost ($1,354 – 306)||$1,048|
** This calculation assumes a 33% tax bracket.
Step 3: Calculate extra monthly payment over equity share term.
|After-tax Monthly Cost||$1,048|
|Market Rental Value||<1,000>|
|“Extra” Monthly Payment||$48|
|Total Over 5 Year Term (60 x 48)||$2,880|
Step 4: Discount to present value.
The total extra monthly payment is discounted to present value because the payments will not be invested all at once. “Discounting” the payment answers this question: How much money would have to be invested today in order to provide enough monthly income to make all of the payments? You need an accountant, computer or fancy calculator to figure this out. Here, using a discount rate of 8%, the answer is $594. This becomes the Monthly Capital Contribution.
Some owners calculate Monthly Capital Contribution based on actual rather than projected monthly payments. They subtract the rental value form the occupier’s actual after-tax monthly cost. The difference, discounted in some way to reflect the date of contribution, becomes occupier’s Monthly Capital Contribution. This approach is complicated from an accounting standpoint, and shifts some of the risk of rising and unpredictable monthly costs to the investor. Most investors will not accept this risk.
Ownership Of The Equity Share Property
How is title to the equity share property held?
The deed to equity share property must define the relationship of every owner to every other owner. Often, there are several types of relationships involved in a single equity share. This occurs whenever some or all of the owners are married couples.
Example–Title To Equity Share Property
“George C. Smith and Mary A. Smith, husband and wife, as joint tenants as to an undivided 55% interest, and Laura M. Davidson, an unmarried woman, as to an undivided 45% interest, all as tenants in common.”
The language defines two relationships: the relationship of the Smiths to Laura, and the relationship of George and Mary Smith to each other.
The last five words, “all as tenants in common”, establish the relationship of the Smiths to Laura. That relationship is a tenancy in common. Holding title in this manner accomplishes two goals. First, it protects each owner’s interest from seizure by the creditors of the other owner. Second, it establishes that if Laura dies, her interest will not automatically pass to the Smith’s. Instead, Laura’s interest will pass as provided in her will or, if there is no will, as provided by law. The same will happen if both of the Smiths die simultaneously. Tenancy in common is the most common way for unrelated people to hold title to equity share property.
The words “as joint tenants” in the middle of the paragraph establish the relationship of George and Mary to each other. That relationship is a joint tenancy. This means that if George or Mary dies, the other will automatically own the entire Smith 55%. Joint tenancy is the most common way for related people to hold title to equity share property. It is popular because it transfers ownership of the property automatically upon death without wills or court involvement. The transfer generally costs nothing and involves no delays or waiting periods. Nevertheless, married co-owners should ask a real estate lawyer or escrow agent for the best method of ownership available in their state.
Unmarried domestic partners who purchase as one couple within an equity share present special problems because they do not have the benefit of domestic relations laws to govern their relationship and separation. For this reason, they should have their own co-ownership contract which describes the rights and duties of each individual within the couple and what will happen to their jointly held interest if they separate.
Is the equity share a partnership?
Equity sharing owners can form a partnership, but it is not a good idea. Under certain circumstances in many states, one partner can bind another to an agreement, and one partner’s creditors can reach the assets of another. To avoid these consequences, the equity sharing contract should explicitly state that partnership is not intended.
Occupancy Of The Equity Share Property
How does the occupier protect his right to occupy?
The equity sharing agreement gives the occupier an exclusive right to occupy. Exclusivity prevents the investor from claiming a right to live in the property with or instead of the occupier.
Under what circumstances can the right to occupy be lost?
The right to occupy is conditional. If the occupier does not fulfill his obligations, including making monthly payments and maintaining the property, his right to occupy is lost.
Can the occupying owner move out?
The occupier’s promise to use the property as a home is often an important factor in convincing the investor to equity share. The investor presumes that an owner-occupier will take better care of the property than a tenant. If the occupier could move out at will, the investor could never be sure that his initial expectation would be fulfilled. For this reason, most equity sharing contracts require that the occupier use the property as his principal residence throughout the equity share term. But in case a job transfer or illness forces the occupier to relocate and poor market conditions precluded selling, the occupier should be allowed to rent the property with the investor’s consent.
What if the owners intend to rent out the property?
In some equity sharing transactions, the owners plan to rent some or all of the property. This can be true when the property is two or more apartments, has an “in-law” space, or is a vacation home that will be rented for some of the year. It can also be true when the occupier expects to move out before the end of the equity sharing term. Under these circumstances, the parties have two options. Under one option, the occupier keeps the rent, pays the bills, and independently experiences any profit or loss. With this option, the investor takes no risk but reaps no reward. Under the other option, both owners share income and expenses during any rental.
Repair And Improvement
Are both owners responsible for repairs and improvements?
Most of the responsibilities for maintenance, repair and improvement of the equity share property fall on the occupier. The occupier must know when work is required and get it done. The investor’s only responsibility is to approve of and contribute funds to certain work. Our equity sharing contract divides work into five categories and defines which types of work require investor approval and/or contribution.
Example–Categories of Repairs and Improvements
- Category 1: Routine Maintenance
“Routine Maintenance” is work that is needed to maintain the property in a condition that is equivalent to its condition at the start of the equity share, and costs less than $500. Some common examples of Routine Maintenance include landscaping and minor plumbing and electrical repairs. The occupier must pay for this work, costs are not reimbursed, and investor approval is not required.
- Category 2: Occupier Damage Repair
“Occupier Damage Repair” is work that is needed because of something the occupier did or did not do. Deterioration caused by normal wear and tear is not considered Occupier Damage unless it was worsened by the occupier’s failure to perform Routine Maintenance. Some common examples of Occupier Damage include pet destruction of flooring and kitchen fires. The occupier must pay for this work regardless of amount, costs are not reimbursed, and investor approval is not required.
- Category 3: Necessary Repair
“Necessary Repair” is work that is needed to maintain the property in a condition that is equivalent to its condition at the start of the equity share, is not related to Occupier Damage, and costs more than $500. Some common examples of Necessary Repair include roof replacement and painting. Each owner pays his share of the cost, both are reimbursed. The investor must approve the price of the work, but not the necessity of the repair.
- Category 4: Major Damage
“Major Damage” is Necessary Repair that costs more than $5,000 such as catastrophic loss from floods or earthquakes. If the Major Damage is not covered by insurance, or if the insurance will cover less than 75% of the repair cost, either owner can force a sale of the property. This provision protects each owners from being forced by the other to pay for repairs he cannot afford. It is important to make sure that the limit you choose reflects the value and condition of the property.
- Category 5: Discretionary Improvement
“Discretionary Improvement” is any work that does not fit into the other categories. Some common examples of Discretionary Improvement would include room additions and renovations. The investor must approve a any Discretionary Improvement if the costs will be reimbursed. The investor must also approve any Discretionary Improvement that costs over $1,000 regardless of whether the costs will be reimbursed. This requirement allows the investor to have control over major changes in the property.
Chart–Summary of Repair and Improvement Categories
|Type||Definition||Cost Sharing||Shared Decision|
|Routine Maintenance||Required upkeep costing less than $500||No||No|
|Occupier Damage||Caused by occupier & not normal wear||No||Yes if over $500|
|Necessary Repair||Required upkeep costing more than $500||Yes||Yes|
|Major Damage||Required upkeep costing more than $5,000||Yes, but one owner can force sale of the property unless insurance covers more than 75% of the cost|
|Discretionary Improvements||Not required upkeep||Only if owners agree||Yes if over $1,000 or if cost will be reimbursed|
How does the occupier know when work is necessary?
The occupier conducts regular inspections to determine when work is necessary.
What does the occupier do if work is necessary?
After discovering a repair problem, the occupier must get at least one bid for the job from a “Qualified Workman”. A “Qualified Workman is someone who holds all licenses legally required for the job and has at least two (2) years experience completing similar work. If the first bid is over $500, the occupier must get at least two more bids. Requiring multiple bids insures an accurate cost estimate. Accuracy is particularly important in equity sharing because cost will often determine whether the investor must contribute funds. The only time no bids are necessary is when the occupier intends to do the work himself and does not expect reimbursement.
What if the work is an emergency?
In an emergency, the occupier must get the required bids more quickly, and the bids must provide for quicker completion of the work. Emergencies include malfunctions of the heating, plumbing, electrical, roofing or foundation systems, or any other dangerous condition.
What if the investor thinks all the bids are too high?
It is possible that the occupier might not seek the lowest bid because he knows that only a high bid would trigger cost sharing. For this reason, the investor is given a short time to try to get a lower bid before the owners select a bid.
What happens once a bid is selected?
The occupier signs a written contract with the Qualified Workman, each owner contributes his share if necessary, and the work begins immediately. The occupier supervises the work.
Who is responsible if the work goes poorly?
The occupier must aggressively enforce the owners’ rights if the workman does not perform, and pursue completion of the work by the original workman or by another Qualified Workman. A written contract with the workman is required because it is very difficult for the occupier to fulfill these responsibilities without one. Any expenses (other than the occupier’s time) connected with replacing or suing a bad workman are allocated in the same way as the original cost of the work.
What if the occupier wants to do work himself?
It is common for homeowners to perform repairs and improvements on their own home, and this is no less true for equity sharing occupiers. Unfortunately, occupier work is the single greatest source of equity sharing disputes.
List–Occupier Work Dispute Areas
- Quality of workmanship
- Scope of work
- Rate of compensation for occupier labor
- Amount of labor and materials used
- Payment schedule or point in time when occupier gets credit for work
- Responsibility for costs overruns
Example–Common Occupier Work Dispute
Suppose Mary Smith, who intends to get her contracting license and go into business with her friend Joan (of the purple cabinets), decides to renovate the Elm Street bathroom. They set a budget of $10,000. Everyone agrees that each owner will pay his share of the cost of materials, estimated at $4,000, and Mary’s labor at $15 per hour for an estimated 400 hours. They are all friends and do not bother with a written contract.
Everything goes well at first. The Smith’s pay for all the materials, figuring they will bill Laura for her share when the work is finished. Then, disaster strikes: plumbing explodes damaging framing and fixtures. New materials need to be purchased but the Smiths are out of money. Mary has already worked over 1,000 hours and spent $15,000 on materials. The bathroom job has already cost $30,000 and needs to be re-done at an additional cost of at least $20,000. The Smith’s feel they have worked hard and lived with the mess for months, and expect Laura to at least pay her share of the costs. Laura is willing to pay her share of the originally agreed $10,000, but not until a qualified contractor is hired or the bathroom is finished by the Smiths. The parties have a major dispute to resolve.
The equity sharing agreement should prevent this type of dispute by imposing rules for occupier work.
List–Rules For Occupier Work
- Rule 1: Investor Approval
Require Investor approval for any big or technical jobs. Major work will affect the investor’s equity, and he has a right to know about it even if no contribution or reimbursement is expected.
- Rule 2: Bids For Comparison
If occupier expects reimbursement, require him to get contractor bids for the work to help establish value. This process protects both owners by insuring that the value they assign to the work is neither too low nor too high.
- Rule 3: Written Contract
Have both owners sign a detailed written contract for the work. This insures there will be no misunderstanding or argument about what was agreed.
- Rule 4: Avoid Hourly Compensation
Most occupiers are inexperienced. They work more slowly than professionals and are unable to estimate the number of hours required to complete the work. In addition, the investor will have no control over the hours spent and would be writing a blank check if he agreed to pay for an unlimited number of hours. Reduce the potential for dispute by using a fixed fee rather than hourly compensation for labor.
- Rule 5: Limit Materials Costs
Inexperienced workers frequently waste materials during the learning process. Reduce the potential for dispute by placing a ceiling on materials costs.
- Rule 6: Be Very Specific
Provide a fixed fee, fixed completion date, and fixed compensation schedule in your written contract.
Example–Occupier Work Contract
- Mary will demolish the existing bathroom, remove debris, re-frame with new wood, install tile on the walls and floor (tile sample attached), install new fixtures (photos or model numbers attached), and paint (color sample attached).
- Mary will be paid $10,000 for the job in four installments: 25% on signing this agreement, 25% when the job is 25% finished, 25% when the job is 75% finished, and 25% on completion. Each owner will pay his ownership share of these amounts.
- Mary will finish the job by December 1, 1995.
- Mary will be responsible for providing all labor and materials.
- If there is any dispute about this agreement, the owners will follow the dispute resolution procedures in their equity sharing contract.
What if the occupier wants to improve the property?
Improvements are a highly controversial issue in equity sharing and are generally discussed at length by the parties before they agree to equity share. Generally, the occupier wants to use his home like any other homeowner. This means freedom to perform any improvement and to demand either cost sharing or reimbursement from the investor. The investor is afraid of “improvements” that actually lower property value, like the purple cabinets, and of writing a blank check which allows the occupier to spend the investor’s money or the investor’s equity without the investor’s consent.
The equity sharing contract must balance the occupier’s desires and the investor’s concerns. If the occupier expects the investor to contribute to the cost of the work, or if the occupier expects to be reimbursed for the cost of the work at the end of the equity share, the improvement will directly affect the investor’s return. Consequently, the investor’s approval should be required and the investor should be free to withhold that approval. The approval should be in the form of a detailed writing describing the scope of work, costs, and each owners contribution to cost and/or right to reimbursement.
If the occupier expects neither investor contribution nor reimbursement, the investor takes much less risk. Small improvements without reimbursement have little or no effect on the investor, and the occupier should be allowed to make these at will. Large improvements can lower the property value if they are poorly designed or constructed and the investor should be able to disapprove them if he has a reasonable basis. The agreement must provide a ceiling to determine when an improvement is “small”. Our agreement sets this ceiling at $1,000 (see Example 3.6.1.A.).
Occupiers often request blanket permission to make improvements at their own expense and be reimbursed only if the property value rises. This arrangement does not work. There is no way to determine whether and how an increase in property value is related to an improvement. An increase in property value could be partially or totally due to market appreciation; the value may even have increased more without the improvement. You cannot assume an improvement was worthwhile just because the property value increased. Even if you could make this assumption, you could not establish a fair amount for occupier reimbursement. The only information you will have is the cost of the work, and cost may not be related to value. Poor design decisions and/or workmanship can mean the occupier spent too much causing cost to be higher than value; conversely, careful spending and luck can cause value to be higher than cost. Fair reimbursement would be the value of the improvement, the amount by which the improvement raised the property value, but no appraiser can tell you an improvement’s value. The moral: stay away from blanket permission for occupier improvements.
What if the occupier has specific improvements in mind before purchase?
State which improvements will be made, when they will be made, how they will be funded, and whether costs will be reimbursed in your equity sharing agreement.
About the Author
Andy Sirkin has helped structure equity sharing transactions since 1985. In addition to advising homeowners, homebuyers, and private investors on shared equity financing, and preparing documentation for more than 500 equity share arrangements, he has counseled and prepared webpage copy, contracts and agreements for six equity sharing startups, and worked with businesses, local governments, churches, and educational institutions to structure equity sharing programs. He has also advised government prosecutors in two prosecutions involving fraudulent and illegal equity sharing businesses. He is the author of The Equity Sharing Manual, first published by John Wiley and Sons in November 1994 (order the book).