Do I Have to Pay Rent for Occupying a Home I Inherited as a Trustee?
Full Question:
Answer:
Courts have held that trustees breached their fiduciary responsibility of loyalty by allowing immediate family members to occupy trust property at no rent or for rent far below fair market value. A trustee has an obligation to obtain see to it that those occupying real estate owned by the trust pay fair market value for its rent.
It will be a matter of subjective determination for the court to determine whether there was a breach of fiduciary duty, based on all the facts and circumstances involved. The standards of care are measured against the subjective interpretation of how a "reasonable" person would act in similar circumstances.
The elements of a cause of action for breach of fiduciary duty are:
(1) Plaintiff and Defendant share a relationship whereby:
(a) Plaintiff reposes trust and confidence in Defendant, and
(b) Defendant undertakes such trust and assumes a duty to advise, counsel and/or
protect Plaintiff;
(2) Defendant breaches its duties to Plaintiff; and
(3) Plaintiff suffers damages.
The elements of a claim for breach of fiduciary duty are not fixed as the claim may arise from virtually any case where one party accepts the trust and assumes the duty to protect a weaker party.
Affirmative defenses to a claim for breach of fiduciary duty can include, but are not limited to:
(1) The passing of the statute of limitations for filing the claim.
(2) Lack of fiduciary relationship (for example, when the parties did not enter a fiduciary relationship, but rather conducted business in an arm’s length transaction there is no duty to protect the other party or disclose facts which the other party could have discovered by its own diligence.)
(3) Lack of standing
(4) Approval (for example, if the alleged actions followed full disclosure to and the consent of the Plaintiff)
(5) Business judgment rule (ex. that the corporate fiduciary's actions were motivated by a bona fide interest in the well being of the corporation where shareholders are the ones owed the fiduciary duty)
We are prohibited from giving legal advice, as this service provides information of a general legal nature. We suggest you consult a local attorney who can review all the facts and documents involved.