Constructive Trust Cause of Action

A constructive trust is an equitable property claim. It usually arises in practical terms when the deed owner is other than yourself, however you are paying all the carrying costs, mortgage, maintenance etc.

In some cases where a family member or very close person ‘helps’ buy real property and later reneges on a promise to deed it back to you, legal help is needed. Constructive trust is a legal concept used in equity to address situations where one party holds legal ownership of property or assets, but it would be unfair or inequitable for them to retain beneficial ownership. In such cases, a court may impress a constructive trust to recognize the equitable rights of another party who is entitled to the beneficial ownership of the property.

The constructive trust is “constructive” because it is not necessarily created by an explicit agreement or intention of the parties involved, but rather it is imposed by the court to prevent unjust enrichment or to rectify a wrongful act.

Here are 4 common scenarios where constructive trusts may arise:

1. Unjust Enrichment: In cases where someone benefits unfairly at the expense of another, a constructive trust may be imposed to restore the rightful owner’s interest in the property.
2. Breach of Fiduciary Duty: If a person in a position of trust or fiduciary duty, such as a trustee, director, or agent, wrongfully acquires or retains property that belongs to the beneficiary, a constructive trust may be imposed to hold that property for the true owner.
3. Fraud or Misrepresentation: If one person acquires property through fraud or misrepresentation, the court may impose a constructive trust to ensure the property is held for the benefit of the defrauded party.
4. Oral Agreements: In situations where there is no written agreement but an understanding or promise to hold property for someone else exists, a constructive trust may be used to enforce that agreement and protect the intended beneficiary’s interest.

Overall, constructive trusts serve as an equitable remedy to prevent unjust enrichment, and it is an exception to the statute of frauds requiring a written agreement. We can help with situations like these and feel free to reach out to us.

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