Escrow & Title
What is 'constructive trust' and when might a Hawaii court impose one in real estate?
AA. A trust automatically created by recording a deed in trust
BB. An equitable remedy imposed by a court when one party has been unjustly enriched at another's expense; requires the wrongfully obtained property to be held in trust for the true owner✓ Correct
CC. A trust created when two or more parties hold title to real estate together
DD. A trustee's duty to construct improvements according to beneficiary instructions
Explanation
A constructive trust is a court-imposed remedy for unjust enrichment. If one party obtains property through fraud, breach of fiduciary duty, or other wrongful conduct, a court may impose a constructive trust—declaring the wrongdoer holds the property as trustee for the true owner. In Hawaii, constructive trusts have arisen in cases of fraudulent deed transfers, agent misconduct, and family disputes.
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