Disclaimer: This article is for informational purposes only and does not constitute legal advice. Consult a qualified attorney to address your specific situation.
Detailed Answer
Under South Dakota law, simply making mortgage payments on real property does not automatically grant you an ownership interest in that property. Legal title to real estate passes only by deed or other recorded conveyance, not by paying a loan secured against it.
Legal Title vs. Equitable Interest
- Legal title resides with the person whose name appears on the recorded deed.
- Equitable interest arises when one party contributes to the purchase price or mortgage under certain circumstances, such as a resulting trust or constructive trust.
Constructive Trust Under SDCL § 43-42-1
South Dakota recognizes constructive trusts when someone holds title under circumstances that make it unfair for them to keep the property. SDCL § 43-42-1 provides:
“One who by fraud, duress, undue influence, or breach of a fiduciary duty, or other wrongful act, or who in breach of trust … holds legal title to property which he or she ought not in equity or good conscience keep, is a trustee of the property for the person or persons who are equitably entitled to the beneficial interest.”
Link: SDCL § 43-42-1.
Resulting Trust
A resulting trust may arise when you advance part of the purchase price or mortgage payments under an agreement that you will gain an interest. You must prove both intent and financial contribution.
Recording and Enforcement
Even if a court imposes a constructive or resulting trust, you should record a lis pendens or other notice of claim to protect your interest. If a dispute arises, you may file a quiet title or partition action in circuit court to clarify or enforce your equitable rights.
Helpful Hints
- Always get a written agreement if you expect to gain an ownership interest for your mortgage contributions.
- Record any agreement or notice of claim in the county where the property lies to protect your interest.
- Keep detailed records of all payments you make toward the mortgage and property expenses.
- Consult a South Dakota attorney early to review your contract and advise on recording strategies.
- Act quickly: South Dakota’s statutes of limitation may bar your claim if you wait too long.