Constructive Trusts, Resulting Trusts and the Protection of Foreign Investments in Kenya
For a foreign man who falls in love with a Kenyan woman, building a life together can sometimes involve more than emotional commitment. It can also involve substantial financial investment.
A home may be constructed, an apartment purchased, land acquired, a business established or substantial savings transferred to a Kenyan partner. In many cases, these arrangements are based on trust, with little thought given to the legal consequences of placing the property or funds in one person’s name.
The problem often begins when the relationship ends. The foreign partner may discover that the property he financed is registered exclusively in his Kenyan partner’s name. The savings he transferred may be held in an account to which he has no legal access. The former partner may then argue that the property and money belong to her because she is the registered proprietor or account holder.
This raises the difficult legal question: If I paid for the property but it is registered in my partner’s name, do I have any legal claim to it?
The answer is not simply yes, or no. Payment alone does not automatically confer ownership. The court will look at the nature and purpose of the payment, the parties’ intention, the circumstances in which the property was acquired and, critically, the evidence available to establish the alleged interest.
Legal Title Is Not Always the End of the Story
Registration ordinarily confers legal title upon the registered proprietor. However, legal title does not necessarily exhaust all questions of beneficial ownership. Kenyan law recognizes equitable interests that may arise in appropriate circumstances through doctrines such as constructive trusts and resulting trusts. A person may therefore hold the registered title while another person claims an equitable or beneficial interest in the property. This is where the doctrines of constructive trust and resulting trust may become relevant.
A constructive trust is an equitable remedy which may arise where having regard to the circumstances, it would be unconscionable for the legal owner to deny another person’s beneficial interest. In a claim founded upon common intention, the claimant must establish, through evidence, that there was a shared intention regarding the beneficial ownership of the property and that the claimant acted to his detriment in reliance upon that intention.
The Court of Appeal’s decision in Awange & another v Oyolla & another [2026] KECA 377 is instructive in this regard. The Court emphasized the importance of establishing common intention and detrimental reliance in a constructive trust claim. Although intention may, in appropriate circumstances, be inferred from the conduct of the parties, such an inference must be approached cautiously. https://kenyalaw.org/akn/ke/judgment/keca/2026/377/eng@2026-02-27
The important point is therefore this: The question is not simply who paid for the property. The question is what the payment was intended to achieve.
Constructive Trust or Resulting Trust?
It is equally important not to assume that every dispute involving property registered in a partner’s name is automatically a constructive trust case.
The distinction between a constructive trust and a resulting trust can be significant.
Constructive Trust: When Can It Arise?
A constructive trust is an equitable doctrine which may, in appropriate circumstances, prevent a registered proprietor from denying another person’s beneficial interest.
In the context of relationships, the argument may be that both parties had a common intention that the property would ultimately be owned or beneficially enjoyed by both, and that the claimant acted to his detriment in reliance upon that understanding.
For example, imagine a foreign partner tells his Kenyan partner: “I will provide the purchase price for the apartment. We will own it together, although for the time being it will be registered in your name.” He then transfers KShs. 15 million, pays the legal fees, finances completion and continues paying for construction.
If the evidence supports the existence of that common intention, the circumstances may give rise to an equitable claim.
But compare that with a different situation. A foreign partner transfers Kshs. 15 million to his girlfriend without any agreement concerning ownership. He regularly sends her money for rent, school fees, living expenses and personal use. She later purchases property in her own name.
The mere fact that the money originated from him does not automatically make him a beneficial owner of the property. That is the lesson that Awange v Oyolla brings into sharp focus. The Court stressed that a constructive trust cannot simply be inferred from an emotional relationship or unclear financial contributions. There must be evidence connecting the claimant, the registered proprietor and the alleged common intention.
And What About a Resulting Trust?
A resulting trust is conceptually different. It may arise where one person provides the purchase money for property, which is placed in another person’s name, in circumstances suggesting that the contributor was not intending to make a gift and that the registered owner was not intended to take the beneficial interest absolutely.
This can become relevant where, for example, a foreign investor provides the entire purchase price for an apartment, but the apartment is registered in his Kenyan partner’s name.
The court would still have to examine the circumstances surrounding the transaction.
Was the money intended as a gift? Was it a loan? Was it an investment? Was the property supposed to belong to both parties? Was the registration in her name merely for convenience? Was there an agreement, whether written or evidenced through conduct, concerning beneficial ownership?
These questions matter because a trust is not created simply because one person happened to provide money. “But I Paid for Everything.” This is often where these disputes begin.
The foreign partner may have bank statements showing that he paid the deposit, completion monies, construction costs, furniture, renovations and even the property’s ongoing expenses.
But a bank statement proves one thing very clearly: Money moved from one person to another. It does not, by itself, prove the legal character of that payment.
The recipient may argue: “He was supporting me.” Or: “Those were gifts during our relationship.” Or: “He gave me the money voluntarily.”
The claimant may say: “That money was specifically for our property.” The court therefore must determine the purpose and legal character of the payments. This is why evidence can become decisive.
The WhatsApp Message Could Matter
In these disputes, seemingly ordinary communications can become significant evidence.
A WhatsApp message stating, “I have sent the money for our apartment,” may assist in establishing the purpose of a transfer. An email discussing the proposed ownership structure may be equally important. So may bank statements, sale agreements, receipts, construction contracts, invoices, property searches, correspondence with advocates and communications with estate agents.
The claimant therefore needs to establish more than “I sent her money.” He may need to demonstrate: “I sent this money for this particular purpose, and this was the understanding between us regarding the resulting investment.” That distinction can determine whether a claim succeeds or fails.
What If the Property Was Deliberately Put in Her Name?
This is where the circumstances become particularly important.
A foreign investor may deliberately register property in his Kenyan partner’s name for convenience, family reasons, financing considerations or because he does not fully understand the Kenyan legal framework governing land ownership.
That decision does not necessarily mean that the foreign investor has no possible remedy.
However, neither does it automatically give him an equitable interest.
The court will examine the intention behind the arrangement and the circumstances surrounding the acquisition. An investor should therefore not assume that he can simply point to his bank statements and obtain the property.
Equally, the registered proprietor should not assume that registration necessarily extinguishes every possible equitable claim.
What If They Were Married?
Where the parties are legally married, the Matrimonial Property Act, 2013 may become relevant to determining rights in property acquired during the marriage. The nature of the property, the parties’ respective contributions and the circumstances of its acquisition will be relevant to determining their rights.
However, the mere fact that a foreign man and a Kenyan woman were in a relationship does not automatically create matrimonial-property rights. Dating, cohabitation and marriage have different legal consequences. Where there is no legally recognized marriage, the dispute may instead have to be determined through trust law, contract, equity and proprietary principles.
Foreign Investors Must Also Understand Article 65 of the Constitution of Kenya 2010
Article 65 of the Constitution of Kenya regulates landholding by non-citizens. A person who is not a Kenyan citizen may hold land only based on leasehold tenure, and such a lease may not exceed ninety-nine years. The constitutional framework should therefore be considered when structuring any property investment involving a foreign national.
Where appropriate, an investment may be structured through a suitable corporate or other lawful vehicle. However, incorporation of a Kenyan company does not, by itself, remove the constitutional restrictions applicable to non-citizens. The ownership of the company, the nature of the land interest and the applicable land laws must therefore be carefully considered before adopting a corporate structure.
How Can a Foreign Investor Protect Himself?
The most effective protection is obtained before the relationship becomes a property dispute.
Where substantial sums are involved, the investor should obtain independent legal advice and ensure that the transaction properly reflects the parties’ intended interests.
This may involve:
Properly documenting the investment. The parties should clearly identify whether the money constitutes a gift, loan, investment or contribution towards an identified property.
Conducting due diligence. Before purchasing property, the investor should establish the registered proprietor, tenure, encumbrances, restrictions, cautions, charges and other matters affecting the title.
Structuring the investment lawfully. Where appropriate, the investment may be structured through a suitable corporate or other legal vehicle, taking into account the applicable constitutional and statutory restrictions.
Preserving documentary evidence. Bank statements, agreements, invoices, receipts, construction documents, correspondence and electronic communications should be retained.
Obtaining independent legal advice. The investor should not rely solely on the advice of a partner, friend, estate agent or informal intermediary when committing substantial sums to Kenyan property.
Already Invested and the Relationship Has Ended?
For an investor who has already financed property registered in his former partner’s name, the appropriate response is not necessarily to commence litigation immediately.
The first step should be a legal and evidential assessment. This is where we come in, MMS Advocates can review the transaction and assess whether the available facts and evidence may support a claim based on trust, contract, restitution or another appropriate remedy. This may involve examining how the property was acquired, who provided the purchase consideration, the purpose of the payments, the parties’ communications and agreements, the registered ownership, any existing encumbrances and the circumstances surrounding the alleged beneficial interest.
Where appropriate, the parties may explore alternative dispute resolution, including negotiation and settlement, before resorting to litigation.
Where settlement is not possible, MMS Advocates can advise on the appropriate proceedings and remedies available under Kenyan law.
Where there is a risk that the property may be sold, transferred, charged or otherwise dealt with before the dispute is resolved, urgent legal advice may also be necessary regarding appropriate interlocutory relief or preservation measures.
The Better Strategy Is to Protect the Investment Before the Dispute
Before substantial funds are committed, investors should consider obtaining independent legal advice on property due diligence, conveyancing, investment structuring, corporate vehicles, shareholder or investment agreements, construction arrangements, financing and succession planning. MMS Advocates advises clients on these matters, including the structuring and protection of property and commercial investments in Kenya. The objective is not to undermine the relationship. It is to ensure that a significant financial investment is not left dependent upon an informal understanding that may later be remembered differently by the two parties.
When Love Ends, Evidence Becomes Important
A relationship may begin with trust. But when millions of shillings and valuable property are involved, trust should be complemented by proper legal documentation.
A foreign investor who has financed property registered in a Kenyan partner’s name is not necessarily without legal recourse. Depending on the facts, equitable doctrines such as constructive trust or resulting trust may provide a basis for asserting a beneficial interest.
But the success of such a claim will ultimately depend upon the evidence and the circumstances in which the property was acquired.
The most important question is therefore not simply: “Whose name is on the title?” It is: “What was the true nature and intention of the transaction that put the property in that person’s name?” For foreign investors in Kenya, the lesson is simple: Trust the relationship. Document the investment. Protect the asset.
MMS Advocates can assist foreign investors in Kenya both in structuring investments before they are made and in assessing and pursuing appropriate legal remedies where an existing investment has become the subject of a dispute.
