Constructive and Resulting Trusts in Real Estate Litigation: Your Rights When You’re Not on Title

Property disputes often arise when someone contributes financially to a home but is not listed on the legal title. 

This situation is common among unmarried partners, family members, business associates, and investors. When a dispute occurs, the law provides two powerful remedies – constructive trusts and resulting trusts – to protect individuals who paid for, maintained, or improved a property they do not legally own.

Ownership is not determined solely by whose name appears on the title. Canadian courts recognize that people often share financial responsibilities without updating legal documents. 

Constructive and resulting trusts exist to prevent unfair outcomes and ensure that contributions are recognized.

A resulting trust arises by operation of law when property is transferred or purchased, but it is presumed that the person providing the purchase money or transfer did not intend to give the beneficial interest to the recipient.

Key points:

• Intent-based: It presumes the transferor did not intend a gift.
  
• Automatic: The trust arises automatically; no wrongdoing is required.
  

Typical scenarios: Person A buys property but puts it in Person B’s name; if it wasn’t meant as a gift, Person B holds it on a resulting trust for Person A.

A constructive trust is imposed by a court to prevent unjust enrichment or fraud, regardless of the transferor’s intention. 

Key points:

• Remedial: It is a tool to correct wrongdoing or prevent unjust enrichment.
  
• Wrongdoing not required in all cases: It can arise even if the recipient didn’t act badly (e.g., in some cases of joint family property or contribution to improvement).
  
• Typical scenarios:
  
  • Fraud, breach of fiduciary duty, or misappropriation of funds.
    
  • Common in family law: a spouse contributes to the purchase or improvement of property in the other spouse’s name.
    
• The court imposes it to make things fair.

If you funded the purchase, you may be entitled to a beneficial interest through a resulting trust or constructive trust.

Long-term contributions can support a trust claim.

In Ontario, common-law partners do not automatically share property. Trust claims are often the only way to recover contributions.

Courts frequently impose constructive trusts to correct unfair outcomes after separation.

Parents, siblings, and relatives often claim resulting or constructive trusts when contributions were made informally.

Strong evidence is critical. Courts look for clear, verifiable proof of contributions and intentions.

• Bank statements, e-transfers, cheques
• Mortgage payment history
• Invoices or receipts for renovations
• Records of household expenses you paid
• Text messages, emails, or agreements discussing contributions
• Proof of labour or improvements
• Testimony about the relationship or financial arrangements

The more organized and documented your evidence, the stronger your claim becomes.

If successful, you may obtain:

• A percentage ownership interest in the property
• Compensation for financial contributions
• A lien or charge against the property
• An order for sale and division of proceeds

Courts tailor remedies to the facts of each case.

If you contributed financially or through labour to a property that is not in your name, it is important to seek legal guidance promptly. These cases are complex, fact-driven, and often emotionally charged. Early legal advice ensures evidence is preserved and your rights are protected.

Contact Pinto Shekib LLP at 416.901.9984 or info@pintoshekib.ca to discuss your trust claim.