A common intention constructive trust is a specific type of constructive trust that arises when two or more people have jointly contributed to the purchase of a property, but the legal title is held in the name of only one of them. In such a case, the court may impose a trust on the property to reflect the parties' shared intention that each person would have a beneficial interest in the property.
The common intention constructive trust is based on the idea that in such situations, it is likely that the parties intended to share ownership of the property, and that the legal title holder holds the property on behalf of both parties. The trust is said to arise by operation of law, as a remedy to prevent unjust enrichment.
In order to establish a common intention constructive trust, the following elements must generally be present:
- Common intention: The parties must have intended to share ownership of the property, even if the legal title was held in the name of only one of them.
- Evidence of common intention: The parties' common intention must be proven, either by direct evidence such as an agreement or understanding between the parties, or by inference from their conduct and dealings.
- Detrimental reliance: the parties must have relied on the common intention to make a joint contribution to the purchase of the property, either by contributing money towards the purchase or by providing services or other contributions.
For example, if one of the joint owners pays the deposit to buy the property, both joint owners share the mortgage payments, and there is evidence that they had a common understanding that they would have an equal beneficial interest in the property, the court might be likely to conclude that there was a constructive trust under which they would have an equal beneficial interest, despite their unequal contributions.
You can learn more about this topic and relevant case law with our Equity and Trusts notes.