Escrow & Title
In South Dakota, a 'constructive trust' may be imposed by a court when:
AA buyer purchases property using a trust document
BOne party unjustly acquires property that should belong to another, allowing the court to declare the holder a trustee for the rightful owner✓ Correct
CA property is placed in a revocable living trust
DA seller holds funds in trust for the buyer's benefit
Explanation
A constructive trust is an equitable remedy imposed by courts to prevent unjust enrichment when one party has obtained property that in good conscience belongs to another. It is not a true trust based on parties' intentions, but a legal fiction used by courts to impose fairness.
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Key Terms to Know
Deed
A written legal instrument used to transfer ownership of real property from one party (grantor) to another (grantee).
Deed of TrustA security instrument used in many states instead of a mortgage, involving three parties: borrower (trustor), lender (beneficiary), and a neutral trustee.
Chain of TitleThe sequential record of all transfers of ownership for a piece of property from the original patent holder to the present owner.
Transfer TaxA tax imposed by state or local governments when real property ownership is transferred, typically based on the sale price.
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