Holding Someone to Their Promise Bringing 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 our 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 lawsuit for a constructive trust.

What is a Constructive Trust?

A constructive trust is a legal doctrine 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 give his money to Dave so Dave can use it for the down payment and after the closing Sam will make all the mortgage payments but the house will be in Dave’s name. Dave agrees to this plan and 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.

As seen from the above example 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.

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) 587-9922 for a free consultation. You can also contact Mr. O’Sullivan by email at Kevin@lawfirmKOS.com.

This article is meant to be utilized as a general guideline. Nothing in this blog is intended to create an attorney-client relationship or to provide legal advice on which you should rely without talking to your own retained attorney first.

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