When Can I Bring an Action for a Constructive Trust?
When we talk about a person’s real estate, we are in many cases talking about that person’s life savings. When we give other people our trust and control over property we generally expect those people to act in good faith. But sometimes people will take advantage of our good faith and unjustly enrich themselves when they should be looking out for our best interest. If a person finds that someone they have entrusted with their property has defrauded them they may seek to have the situation corrected by starting a law suit for a constructive trust.
What is a Constructive Trust?
A constructive trust is a legal remedy that a court can impose when one person is being unjustly enriched through the use of property that rightly belongs to someone else. In these cases, a constructive trust may be created to ensure that the terms of a verbal agreement are upheld and enforced. Through the creation of constructive trusts people may be ordered to transfer property back to the rightful owners or they may be prevented from unjustly enriching themselves through the inappropriate use of another's property.
For example: Sam wants to buy a home but he has poor credit and cannot qualify for a mortgage so Sam asks his friend Dave to purchase the home in his name. Sam will use his money for the down payment and make all the mortgage payments but the house will be in Dave’s name. Dave buys the house using Sam’s money and Sam lives in the house and makes all the mortgage payments and takes care of the home for many years. Then one day Dave tries to sell the house and keep the profits for himself.
In this case Sam has a claim for a constructive trust. Even though they never had a written agreement the court can impose a constructive trust to ensure that Dave is not unjustly enriched by selling the house and keeping all the money that rightly belongs to Sam.
A Finding of Unjust Enrichment?
Unjust enrichment occurs when one person benefits at the expense of another under circumstances that the law deems unfair. For instance, if the sale of the home where to have gone through in the previous example Dave may be viewed to have unfairly benefited from it. Consequently, Sam may be entitled to restitution, including the proceeds from the home's sale. To prove unjust enrichment occurred you have to show that the person wrongly benefited at your expense thus the wrong doer should be forced to compensate you the injured party.
Should you find yourself in a position where you feel someone else has wrongly profited from your property please feel free to call Kevin O’Sullivan at (718) 713-3499 for a free consultation. You can also contact Mr. O’Sullivan by email at Kosullivan@ozatlaw.com.