How Does a Resulting Trust Work in Florida Real Estate?

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There is a reason that real estate contracts are in writing. Oral contracts are generally unenforceable when it comes to buying or selling real property in Florida. And even where oral agreements affecting property title may be valid, they are often quite messy to deal with.

For example, Florida courts recognize that in certain circumstances, a person may hold a property in a “resulting trust.” As the Florida Supreme Court explained in its 1985 decision in Towerhouse Condominium, Inc. v. Merton Millman ad Lillian Aronoff, a resulting trust exists when:

  1. Property is acquired in the name of one person or an entity; and

  2. The actual consideration (payment) for the property is made by someone else.

When both conditions are met, the Supreme Court said there is a “presumption” that the person or entity holding legal title does so “for those who provided the consideration.” This same rule applies if someone else furnished only part of the consideration–the payor would acquire a “proportional interest” via a resulting trust. Furthermore, it is possible for a court to infer the creation of a resulting trust from an oral agreement or promise.

“Oral Agreement” Among Brothers Leads To Extended Family Litigation

A state appeals court here in Florida recently addressed such a case. The parties to this case are a group of siblings. The plaintiff said he made an “oral agreement” many years ago with one of his brothers. The brother purportedly agreed to take out a loan and purchase a piece of real property “in trust” for the plaintiff.

After the brother took title to the property, the plaintiff lived there. The plaintiff said he made all of the mortgage and property tax payments. He also paid for multiple improvements and repairs to the property.

The brother died in 2004. According to the plaintiff, one of his sisters “fraudulently induced” their brother to sign a quitclaim deed just before his death naming her as a joint tenant “with right of survivorship.” This meant that following the brother's death, the sister became sole owner of the property. Notwithstanding this new deed, the plaintiff continued to reside on the property, although he allowed his sister and her husband to reside there as well in exchange for paying rent.

This arrangement continued until approximately 2008, when the sister stopped paying rent. The plaintiff attempted to evict his sister. She responded by “ousting” him from the property. The plaintiff then sued to establish or “quiet” title in the property. He continued to maintain there was a resulting trust created under the original oral agreement with his late brother. Although a trial court dismissed the plaintiff's claims at the summary judgment stage, the Florida Third District Court of Appeal reversed and returned the case for trial.

The Third District Court of Appeal noted the plaintiff presented credible evidence establishing the existence of a resulting trust, including the check he used to make the initial deposit on the property, as well as forms filled out by the brother's family indicating he never owned any real estate. Although the other family members presented contradictory evidence on these issues, the appeals court said that was for a jury to resolve.

Get Help From A Florida Real Estate Title Lawyer

Even when dealing with family members–perhaps especially when dealing with them–it is critical to have a written contract detailing any arrangements with respect to real estate. A qualified real estate attorney can assist you with this and any other issue related to contracts and property title. If you are ready to speak to an attorney about your real estate needs to ensure your property is protected and properly titled, call our office in St. Petersburg, Florida, at 727-537-6818, to schedule an appointment with one of our experienced real estate attorneys today!