Understanding your rights in real property may be crucial when making legal decisions concerning that property, as illustrated in an August 15, 2018 Massachusetts real estate case. The dispute centered around property that had been the plaintiff’s home since 1987. The plaintiff had initially owned the property, but he lost it to foreclosure in 1994. The plaintiff continued residing in the house, however, after convincing a friend to purchase the house from the foreclosing bank and rent it to him. The plaintiff hoped to buy the house back after his credit had improved.
In 2003, the house was sold to the defendant, another friend of the plaintiff. The defendant promised to sell the property back to the plaintiff several times. Each time, however, the plaintiff failed to close on the property through no fault of the defendant. The last purchase and sale agreement was executed by the parties in 2015, and the defendant agreed to four extensions of the closing through the following year. When the plaintiff did not close, the defendant initiated eviction proceedings. In response, the plaintiff filed an action to impose a constructive or resulting trust over the property, claiming that he had been the property’s rightful owner all along.
A constructive trust is created by the court to prevent unjust enrichment resulting from fraud, a violation of a fiduciary duty, mistake, or other circumstances in which the title owner’s retention of legal title to property would result in unjust enrichment. A constructive trust is not a true trust. However, once a court determines that a constructive trust exists, the court can order the unjustly enriched party to transfer the property to the beneficiary of the constructive trust.
The plaintiff asserted two reasons that a constructive trust had arisen in his favor. First, the plaintiff alleged that the defendant breached a duty to the plaintiff in connection with the defendant’s acquisition of the property. The Land Court rejected this argument, concluding that there was no evidence that the defendant owed a fiduciary duty or any other duty to the person from whom he had purchased the property or to the plaintiff. The court also found no evidence that the defendant had taken advantage of the plaintiff through a special relationship of trust and confidence. Second, the plaintiff alleged fraud on the part of the defendant. The claim was likewise rejected for lack of evidence.
A resulting trust in real estate arises where one party furnishes the consideration to purchase property, not intending a gift or advancement, yet another person takes title to the property. The court held that, although the plaintiff had made payments to the defendant, they were merely general contributions toward the purchase price. While such contributions might give rise to a claim for damages, it is not sufficient to trigger a resulting trust. Accordingly, the court ruled in favor of the defendant.
The Massachusetts real estate lawyers at Pulgini & Norton can assist individuals in any legal matter concerning residential property. If you are seeking guidance regarding mortgages or re-financing, approval for a structural change to your home, tax liens, or any other real estate transaction, a skilled attorney can advise you. Call Pulgini & Norton at (781) 843-2200 or contact us online to schedule a free consultation.
More Blog Posts:
Massachusetts Homeowner Argues Deed Restrictions on Her Property Are Against Public Policy, Massachusetts Real Estate Lawyer Blog, published May 8, 2018
Massachusetts Homeowner Wins Land Action Against Town, Acquires Use of Private Roadway, Massachusetts Real Estate Lawyer Blog, published September 18, 2017