Am I entitled to real estate if I am not the legal owner, but I contributed money towards it?

A resulting trust in New South Wales arises when one person makes a voluntary payment to another or pays wholly or in part for the purchase of property which is vested either in the other person alone or in their joint names.

As such, if a person pays for or contributes to the payment for property but does not own the property, or a share of that property, the law presumes that the parties intend to own the property in shares proportionate to their contributions.

There is a rebuttable presumption that the person did not intend to make a gift, and so the money or property is held on trust for the person who provided the money. It is a rebuttable presumption because the legal owner can rebut that presumption by providing evidence that the parties intended there to be a gift.

It is important to be aware of resulting trusts and how they work, as sometimes family members or friends will intend to buy a property together, but with only one of the parties on title. Other circumstances where a resulting trust might arise, is if a family member or friend contributes time, labour and money into renovations of a property but does not have legal title.

A court can examine the evidence and conclude that a resulting trust has been established based on the circumstances. However, a court order does not create the resulting trust itself, as the trust is considered to exist from the time the relevant circumstances arose. Instead, the court issues an order to enforce the trust that already existed.

For instance, if a daughter contributes $50,000.00 for the purchase of her mum’s property for $200,000.00 in 1989 but does not seek court orders until 2024 when the property is now worth $2,000,000.00, the resulting trust will have been established in 1989 and in 2024 the daughter would own 25% of the property under a resulting trust even though she is not a legal owner. It would be presumed that the legal owner (her mum) owns 25% of the property for the benefit of her daughter.

In Bosanac v Commissioner of Taxation [2022] HCA 34 (‘Bosanac’), the Commissioner of Taxation had secured a judgment against Vlado Bosanac to $9,344,111.89. As Bosanac did not have enough money to for the Commission to recover the debt owed to it, the Commissioner sought a declaration that his wife Bernadette held half of her interest in a residential property registered solely in her name in trust for Bosanac. In this case, the court found no basis to infer a resulting trust in favour of Bosanac, as the evidence indicated an intention for Bernadette to be the sole owner.

So even though Bosanac had contributed monies to the purchase of the property, it was seen to be a gift as demonstrated by the actions of the parties. For instance, Bernadette and Bosanac had kept their assets separate, and they had previously used separately owned properties as security for joint loans. As such, for Bosanac to provide money to Bernadette to purchase a home was seen as a gift because where it was not intended to be a gift, Bosanac had registered himself as an owner.

If you have questions about your property please do not hesitate to contact Solari and Stock’s experienced team of Lawyers on 02 8525 2700, or click here to request an appointment with one of our Commercial Team which includes Michael Solari and Valentina Abouzeid.

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