What is a Resulting Trust?

Resulting trusts are a fiction of the law that arises where property is transferred or acquired by one under facts and circumstances which indicate that the beneficial interest is not intended to be enjoyed by the holder of legal title.

A case some readers may have read about in recent newspaper headlines involved a legal theory based on a resulting trust remedy. In City of Boston v. Roxbury Action Program, Inc., 68 Mass. 1101, 865 N.E2d 1140 (2007) the city of Boston became aware that a landowner, which was obligated to convey land to the city due to an inability to obtain a government commitment for housing development on property. The City went to Court claiming that the landowner was holding the property for the City under a resulting trust, since it wasn’t, in the city’s view, the parties’ intention for the landowner to hold the beneficial interest in the property. Unfortunately for the city, the court held that this awareness (of six years) repudiated any resulting trust more than six years before city brought action seeking conveyance of the property such that the statute of limitations barred resulting trust claim; any claim for resulting trust arising through city’s act in providing purchase monies for the property was inseparable from the rest of the dealings between the parties, including landowner’s obligation to re-convey the property on the date specified by agreement, and pursuant to the city’s contract with landowner, the city was to be updated monthly on landowner’s activities related to the development of the property. Read the rest of this entry