BL4u

This article was written 3 years ago (according to the author) by William Jarvis.

I would disagree on the section about usufructs when it says "let's wait and see".

Sebastian.

Isaan lawyer and or Properties: Why do you say according to the author. You know this is correct and it was posted on the <URL Automatically Removed> forum in 2005. I believe you responded to it in 2006 when you were a very newbie here in Thailand. Why dig it up again. It only says you can't own anything as a foreigner, or do you want to drag on about your usufruct crap? You probably find similar posts on Thaivisa!

"A flu is a cancer."

I think you're trying, unsuccessfully, is argue that a "usufruct" agreement is not a "lease". Although there are legal instruments with differences (for example: a lease has a definite period - a usufruct does not, and a lease produces a taxable income - a usufruct does not), a usufruct can, essentially, be considered a "lifetime lease".

Wanna be smart fool

To anwer the OP's question or to make it clear:

Buying property as investment into you own name is not possible in Thailand.

Ok a condo but these things wont last for more than 30 years... A house, ok also true, but owning a house relates to owning land and as you can't own the land it's built on this house ownership is limited to your rights to the land (lease, superficies, usufruct).

People invest in real estate because in the long run it's a good investment - historically. In Thailand can't invest in real estate because you can't own the land.

If I would invest myself into a property in Thailand I would set up a company, ok it's a risk but I like risks, and after the temasek investigations and they canceled the fba amendments I take this risks, but not with my last money.

A lifetime lease does not exist. Maybe you mean a usufruct - this usufruct thing will end with death - 1 day or many years, I don't like this.

A lease in Thailand is merely prepaid rent but secure for 30 years. Options (renewal to purchase or what they think of: eg perpetual) are a greater risk from an investors point of view than owning through a company. But then again, if the OP is happy with a usufruct and wants to buy the property in his ###'s name, yes it's safe if he sees it as prepaid rent and is happy is gf gets the property

A lifetime lease is called a Usufruct.

A flu is a cancer. Don't compare one with the orther.

Did you just discover SMILEYS??? Your gf as the director and you shareholder. Good one. You don't have a 49% interest, only on paper *####. You should at least be director and preference shareholder. It's a joke; 'my solicitor'. The director controls the comp in Thailand.

Mortgage in Thailand, it’s such a crap. Besides condos you can't own anything as a foreigner and will never get a mortage for. At the best you can get a mortgage for a condo.

About the difficulties getting a mortage… Go to your own country and try to get a mortgage and then come back to Thailand to find it's even more difficult over here! If you are not a resident and b- do not have a steady income (long term employment) what are you chances? Zero. Banks over here do not work different from the banks back home.

I heard that the Bank of Scotland offers overseas mortgage options… Really? Yes, but then only if you have as a minimum requirement a property back home as collateral!!! Mortgage option for foreigners

I have deleted all off-topic posts made after another moderator's plea to posters in this thread to remain on topic.

The OP asked what the legal documents are to prove foreign house ownership.

This topic is not about usufruct, superficies, lease, or other things. Is it really so difficult to stay on topic?

--

Maestro

Maestro, this post is about superfices because this is the only right you can register at the competent authority to own a building upon someone else's land. Opposite to what some say a tabian baan is handy but NOT a proof of ownership - eg 1st year law students would understand this.

Ownership of a building is limited to the rights you have towards the land, so if someone on this forum says a usufruct can be for life + 30 years my response to this it is relevant to proof of ownership. Why remove my post/ response? Readers make decisions on the term of ownership they think the have...

.............................. .................

Maybe you would like to remark on another clause common within Usufructs namely, the clause giving the Usufructory the express right to grant a 30 year lease to another that is fully protective of the new leaseholder rights even if the Usufructory died the next day, or the Usufruct subsequently was terminated.

Dave

I know Isaanlawyers or Isaanproperties is promoting this as a sales argument... but is it legally correct? I've asked this a few times in previous posts, how can in practice a usufructuary regsiter a 30 year lease against the land as only the land owner is allowed to do this and any lease exceding 3 years must be registered to be enforceable....? And who will be the lessor in such a registered lease? The usufructuary or the land owner? I'm still waiting for an answer from Isaan lawyers....

Hi BL4u ,

Not just Isaan Lawyers

but Siam Legal

http://www.siam-legal.com/realestate/thail...rty-outlook.php

AND

SUNBELT Legal Advisors

http://www.sunbeltlegaladvisors.com/Thailand-Usufruct.php

both suggest the same thing.

Hope this helps

Dave

Regards

I know they say this on their websites.... If they were posting it on this forum I would ask them too. Still, waiting for an answer.

.............................. .................

Maybe you would like to remark on another clause common within Usufructs namely, the clause giving the Usufructory the express right to grant a 30 year lease to another that is fully protective of the new leaseholder rights even if the Usufructory died the next day, or the Usufruct subsequently was terminated.

Dave

I know Isaanlawyers or Isaanproperties is promoting this as a sales argument... but is it legally correct? I've asked this a few times in previous posts, how can in practice a usufructuary regsiter a 30 year lease against the land as only the land owner is allowed to do this and any lease exceding 3 years must be registered to be enforceable....? And who will be the lessor in such a registered lease? The usufructuary or the land owner? I'm still waiting for an answer from Isaan lawyers....

I think you will find that anyoption to renew contained in a 30 year lease will not be noted on the land title deed (Chanod).

It's not a case of someone 'forgetting' - it would never be recorded, as it is a "personal" matter between leasor and leasee.

So there would never be any problem in selling the land, either during, or after the 30 years has expired, regardless of what effectively is a 'side deal' on an option to renew. It just isn't enforceable.

Mobi: as the usufurctuary you can't lease the property to another individual for a term up to 30 years because simply you can't register this at the land office and this is a requirement under Thai law for the lease to be enforceable - despite what sponsors on this forum say.

The reason why developers push the 30+30 or more specific prefer to push the 30+30+30 for land and house is because they know the purchasers rights will only last 30 years. Developers are more street-smart than the average lawyer representing the buyer!!

A developer who sold a property under a lease just has to wait 30 years before he can sell it again to you or someone else!

Set up a company (with the drawbacks) if you want to buy and own something!!! Take a lease or take a usufruct if you want to have possession and use over a property for 30 years! Beyond that, lease and usufurct will only benefit the owner of the property.

Thanks for your concern, but I talked to lawyers already and they said; it is possible but.... and than came up with a way too high price. I work now with a company and they want to do it by the book and will cost much less but takes a lot of time. But thank you for your thoughts!

This is how it usually goes: You will probably meet someone with connections at the land office, but to get it upgraded you must pay a percentage of what the land would be worth if it was upgraded. You pay because you think you are going to make money with this upgrade and this (briberies) is how things go in Thailand. Then you have to be patient because it can't be upgraded directly (there are many excuses to keep you waiting). After a long wait you start realizing that it will never be upgraded. If you become too loud they will send the police after you because you tried to bribe a land official or worse. It is a scam and whatever you pay after this you will loose too, but maybe you are lucky...

Frankman: Don't be naive. Go to the first bar and drink a Singha. Really, a lot of experienced land trading foreigners lost a lot of money with Tor Bor Ha land.

The chance they will change the Civil and Commercial Code Title IV 'Hire of Immovable Property' is less than zero - This will be far to complicated. If they change something there will be a separate regulation and this is how it more or less would look like:

An alien bringing in money not less than x000 million into the Kingdom as specified in the Ministerial Regulation for investment in immovable property for residential purposes not exceeding 0,5 Rai shall be allowed to hire of such immivable property for a duration exceeding thirthy years but not exceeding fifty years.

PROVIDED THAT THE FOLLOWING RULES MUST BE SATISFIED

1. The immovable property shall be a in residential housing Project under The Land Development Act B.E. 2543 (A.D. 2000);

2. The alien shall maintaining the investment not less that five years;

3. The housing project shall be located in Bangkok Metropolis, Pattaya City , or Tessaban (Municipality), or in the area specified as residential zone according to the law on Town and Country Planning and shall not be located in a military safety zone according to the law on Military Safety Zone;

4. The alien shall utilize such propertry for a residential purpose of his/herself and the family in a way that is not contrary to the local custom or good living of the local community;

5. A person granted permission shall utilize such land for residential purpose within two years as from the date of the lease registration;

6. The contract of hire shall be made in writing and registered by the competent official;

7. The letter and the hirer may make an agreement to renew the contract but it shall not exceed fifty years from the day the agreement is made;

8. The letter shall have possession in such immovable property;

9. The right and duties of hire are devolvable upon the heir and the hirer can sublet or transfer his right of hire to a third person unless otherwise provided by the contract of hire;

ETC.

Any longer leashold terms shall be under conditions that benefit the official Thai real estate business!!! Never a change of the Civil and Commercial Code.

Good explanation?

"A usufruct for free does really not make sense."

Same as a gift. If you give a 300$ to your best friend, does it make sense? Is it illegal?

Gifts are also in the Thai commercial and civil Code of Thailand...same as usufructs.

If you write a text with so many questions, it looks like you want people to be afraid.

You don't really give an explanation...

There are plenty of considerations that can make an obligation for free and it doesn't need to be in the contract. It is true that the land department can refuse to register it... It is also true that prostitution is illegal in Thailand, etc...

At our Korat office, we did around 50 usufruct in the last 2 years. IT HAS NEVER BEEN REFUSED. Once delayed in Kalasin by a week and twice we had to put some amount but taxes paid by client where LOWER than a lease, much lower. One case was involving a company (the land department said company = profit and they wanted some tea money and the other case was involving a gay couple). If a land department refused to register a usufruct agreement, we will FULLY REIMBURSED the client.

It's written : "I would be careful" who is "I"... a website?

A sentence like "Is this usufruct not actually a lease" reflects the intention of the writer.

Is this CAR not actually a BUS? Could this apple be a pear? Think about it...

A lease is a lease and a usufruct is a usufruct. If you pay a rent, and in return you get possession of a property for a period of time, it sounds like a lease. If you pay an amount of money to get a usufruct, it's a usufruct with compensation. It's not a lease.

This article is alarming and tries to make people afraid: Maybe, possibly, could...

It tries to make leases look better than usufructs. But nothing is further from the truth.

Leases are better is some occasions. Usufructs will be more suitable for some clients.

If you don't look at the needs of the clients, and you have 2 contracts in front of you, ONE USUFRUCT AND ONE LEASE, unless the people writing them are incompetent, a usufruct agreement will give more latiture and rights to the usufructuary than a lease agreement to the lessee. That's the Law and the origin of the usufructs.

Good explanation?

I am sure that people will be more confused after reading this text. It should be the opposite.

This article or your recent 'everything you want to know about usufruct' does NOT give any answers. What is of essential knowledge to foreigners to know = can my right last longer with a usufruct? Right or wrong?

The real aspect worth discussing imo is; you say in your post...so the usufructuary can grant a thirty years lease to a third party. By this way, you could pass on your rights to your children or other relatives even after death if the lease was done before the demise'.

This says: '… any lease exceeding 3 years must be registered at the local Land Office and this is not a right the person who holds the property in usufruct has. Only the real owner is allowed to register legal acts like a registered lease over the property…'

Is it for life + 30 years or is this just ####? I think it is ####

I might look at it perhaps a bit simply and ask everyone here have they ever actually known anyone to have land/property confiscated due to it being held under a shell company?

No but i do know someone that has had their company dissolved for not paying taxes due to company inactivity for several years. If memory serves me right they told me they did not pay for over 5 years but the said the company could be dissolved after 3 years of non payment.

I know a company that is dissolved 7 years ago and the land is still registered in that company's name. It seems that the land office (in this case Samui) just don't know what to do with the land owned by 7 shareholders who can't be traced.

The advice would be:

1 if you own land through a nominee company don't worry, take a lease from your company,

2 when it would be time to worry then dissolve your company, your shareholders are fake anyway and can't be traced if you've done it right.

3 the lease will protect you, and after 30 years with no one actually owning the land but fake shareholders, your lease is automatically renewed according to the Civil and Commercial Code. Sure with a real land owner this offers little guarantee but in this case with a fake co-ownership by untraceable shareholders you remain lawfully on the land..

Afraid of using nominees? With a Thai government carefully circumventing this subject? Take the best, untraceable fake shareholders you can find in any hill tribe in the north

Naam: BL4U has answered you. There are several dispositions like 96 of the Land Code...

BL4U: I understand what you mean, but completely disagree. If someone doesn't need to sell a property and is perfectly happy with his wife/girlfriend, there is NO NEED to setup a company. Even if you know the responsabilities and risks, there are fees and work associate with it. A usufruct is a strong contract, it is registered and perfectly legal. Fees are low and it even protects you if your girlfriend/wife predeceased you. Now, everyone has a different situation. In Isaan, most foreigners here have a Thai girlfriend/wife and are here for a long time. Usufructs exist for many years in several jurisdictions... I believe many people have a lot to lose and prefer using other ways that are more lucrative for their business...that's just my opinion.

OK Isaan Lawyers and/or Properties: Imo you give misleading info. The info you give on this forum is roughly incorrect and more for your own sales than independent legal information. I do not trust info coming from someone who sells properties and gives legal information, besides, in the past you used at leased 4 different names on this forum. You even responded under different names in 1 thread.

As for your info: If a foreigner is buying land in a Thai girlfriends name then this conflicts with the law. For the Thai girlfriend with sections 96 and 113 Land Code Act (as she acquired land as the owner in place of the foreigner) and by supplying false info to the land office official she commits an offence under 137 and 267 Penal Code. This is not allowed.

For the foreigner this has a conflict with section 86 and 111 Land Code Act.

Why would it be illegal to use a company to buy land on your behalf and legal to use a Thai natural person. Nominees? Since the Temasek investigations we know that there are no nominees in Thailand. Your knowledge is to limited to place everything in perspective imo. How long have you been around?

You say about usufructs it can be for free… Is it then a gift from the girl to you? Can she not revoke a gift under certain circumstances? Then you say you can own the building in your own name. What does that mean? It is a sales argument for usufructs and your services. Owning a building upon someone else's land is not smart because when your rights of possession/ use of the land ends you must remove the building – or the building remains unlawfully upon the land. You say with a usufruct you have the rights as the owner? What does that mean? Nothing and it is not true! It is ####. You say, you can rent out the property under a usufruct? Sure, like sub-lease, short term you can rent it out, for up to max 3 years. Not a reason to enter into a lifetime usufruct.

Most importantly with a usufruct for life the usufruct ends with your death – it is not transferable. I do not want to be worth more death than alive in Thailand!

Why do you call company ownership illegal when the head of the Land Office in Phuket calls it legal, as long as you comply with the latest guidelines. It is a complicated problem from a legal point of view.

What are your motives for these articles and posts? To lure newbies on this forum? Or do you hope we all run to you to dissolve our company and change it in for a usufruct from a girlfriend?

In addition:

If I had to choose between buying land in a Thai girlfriend's name with a usufruct for free from that girlfriend (as suggested by Isaan Lawyers/ Properties) I would choose the company route knowing the risks and responsibilities.

Not invest too much of your money in Thailand.

Thai law allows that foreigners hold a minority share and minority voting rights in companies which buy/own land and thai law permits that foreigners build and OWN homes IN THEIR NAMES on this land. that's the present legal situation AND accepted legal procedure since many years. anything else (or future interpretation of the prevailing law) is nothing but speculation.

The present procedure is that all partly foreign owned companies are required to demonstrate the source of their capital before being allowed to buy land. This to prevent the use of nominees or shell companies by foreigners.

Foreigners using shell companies for land purchase or to circumvent the FBA is based on selective law enforcment and it is an ignored illegal practice - not an accepted legal procedure.

Thaieagle: To stay on a property, after the death of the Thai owner, let's imagine your wife or girlfriend, I believe the best 'protection' is a USUFRUCT agreement. With this, you can stay on a property for the rest of your life...

I already wrote an article called "Everything you always wanted to know about usufruct agreements in Thailand" on this forum.

Make a search, I believe it was in 2 months ago, in February 2008. If you can find it, go on our website and you will have a copy.

We often combine usufruct and will(s). Or a lease agreement and will(s)

A few tips:

1 - Use one font size and the standard style in your posts

2 – Remove at the top the 'By followed by the names and titles'. The post merely contains general info and a brief summary of the translation of the Civil and Commercial Code. It is not a legal opinion or legal article.

3 – Place the post it in the family section - or specify your post about wills to real estate.

4 – Remove the Isaan-Properties part at the bottom. You lose all credibility as there is a major conflict of interest. Lawyer’s conflict of interest is at the root of almost all the problems in the real estate industry in Thailand. It breaks the first rule of property investing: use an independent solicitor.

Mobi , about the lawyer in Pataya: what happened to Greg and Sunbelt Asia??

Get-rich-quick: suck as much money from as many suckers as fast as possible.

I am starting to believe that Jazzbo is working for another law firm and is just trying to scare people. Maybe he is making more money with leases...

I don't think Jazbo works for a law firm because these people are never negative/ skeptical about anything. Give him an answer…

You think a usufruct is a stronger right because it is a real right. Right? The supreme court gave leases aspects of a real right, and in some situations a lease is better, in some I would even advice a company, and in some you could advice a usufruct.

It just depends on the circumstances.

I would never advice a foreigner, without asking them to sign a disclaimer, to buy property in a Thai gf name, with or without a lease or usufruct!! Not in Thailand, not in my home country. It always must go with a strong warning!

I also felt sad reading all those misguided information on this forum which has been written by those self-appointed lawyers who use their instincts and a long yarn of their talks as a basis of advices. They seem to be addicted to their beliefs and thought to the extent of calling others names of all sorts if the advices are at variance with theirs. They also accused those good advices as given for self-interest either accusing them as an estate agent or even calling them stupid.

This is you Irene! The obvious misinformation you as a self appointed Thai legal expert give in this thread only:

'You can put in a usufruct the conditions that it is not only limiting to a person's lifetime of inhabitation but also 50 years rights passing on to his beneficiaries whichever comes later'

This is beyond usufruct and is the same argument why 30+30 leases is guaranteed.

'In term of the benefits in inhabitation on a property, the grantee can sell that right of inhabitation for whatever number of years he wishes without being subject to leasing conditions'

What you can transfer will always be limited by the term of the usufruct and a cannot exceed 30 years, unless it is for life then it is for life (this could be short). You cannot extend the usufruct beyond the 30 year term or your life. What you are probably trying to say is that you can rent out the property under usufruct to a third party. In this case the lease can continue after your death. However, any lease of the property under usufruct for more than 3 to max 30 years must be registered to be enforceable and this is not a right you have as the usufructuary. You have to make a separate deal with the land owner and this is something you can't rely on.

Your remarks about Singaporean law or Scottisch law compared with Thai law: what is possible under Singaporean law or Scottish law does not mean it is possible under Thai law.

Do not be so self-confident about your knowledge, its made up by you, from other law systems, what you read on this forum or what you heard in your bar.

It looks like many people don't understand the concept of usufruct. A usufruct gives you more rights than a lease, with exception of the continuation of the agreement after your death. However, a usufruct can add a lease after, but you might have to pay more taxes. And this lease can continue after the death of the usufructuary.

Why does a usufruct have more rights than a lease? Simply because you act as the owner for the first 2 parts of the property, according to Civil law, the usus and fructus. It is very similar to a lease, but under a lease, there are much more conditions. With a usufruct, you can completely manage the property, receive the benefits from it, and the real owner (nu-proprietaire) doesn't have anything to say. This is why a usufruct worths sometimes more money in civil law countries than the nu-propriete (owner of the 'abusus' the third part of the property in civil law)

I will post a complete text about usufructs tomorrow. How does it work, myths, benefits, etc.

I read a lot of misinformation on Internet about Thai law. People just have to say "it never has been tested" or "You don't know what you are talking about" or "you say that to sell properties or contracts" and that's the end of the conversation!

Well, believe who you want but double check all information before making a decision.

If you have a usufruct for life the usufructs ends with your death. As I pointed out this can be 1 year or 40 years. Therefore a usufruct for life as an investment protection it is a stupid alternative. Nothing extends this period as suggested by Irene.

You can as a usufructuary rent out the property to a third person without permission of the owner - however, this means for short term rentals. You are not allowed to register a 3+ to 30 year lease on the title deed. To register a lease in addition to the usufruct you have to make a new deal with the owner (he has to sign) and a deal with a third person who will be the lessee….

What if the owner after a while is not willing to cooperate? You can't force him. It is based on trust he will cooperate. What if you get problems with the lessee? You in fact rented it out to him. Do you receive income or assessed income from the lease, tax liabilities? Building land tax?

I would not like to invest money in property and get involved with this structure. You take away the benefits of a usufruct and create a complicated situation.

If you like to discuss this further start a new topic.

What they did was to put in the conditions that not only limiting to a person's lifetime of inhabitation but also 50 years rights passing on to his beneficiaries whichever comes later. Thus the grantee can name his beneficiaries. In addition, I have also seen a usufruct agreement granting the right to the grantee a purchase of Baht 100,000 of the property should the law change allowing a non-Thai to buy a condominium unit. When there was a change, this non-Thai bought the unit for Baht 100,000.

Was that a stupid alternative?

This post is nonsense Irene, comparable to the 30+30+30 lease.

This '50 years right passing on to his beneficiaries whichever comes later' you mention is made up, maybe by you to sell property. This is something you can absolutely not find in Thai law. I think you do not understand the concept of usufruct.

mickba,

I made an enquiry and was immensely surprised when the officials were even helpful to bring out a standard usufruct agreement for the public to use).

In summary, you can get an unchallengeable situation under the lease for a maximum period of thirty years. But why go for leasing, when usufruct offers you a chance of a lifetime "ownership" with least cost.

Not personal Irene but blablabla usufruct. A usufruct is only suitable for people who do not care if the property goes to their Thai girlfriend, friend or spouse after their death.

For what you pay for the property/ usufruct: if you live for another 40 years you would have had a low rent. It is like gambling, if you live long you have a profit, is your life is short it is definitively a gift to the Thai national.

As an investment protection it is a stupid alternative.

Hi guys,

Just got my Usufucts for three of our properties the other day. All legally registered on the Chanots as well...

My question is....how do I go about building the house in my name now? Presently, the properties have no improvements on them yet. I want to build my house on one of them, but would like to have the house in my name. Can I do this, before I start building? What is the process?

My plans are almost ready and I am just about ready to take them to the landoffice to apply for a building permit. Is that all I need to show proof that the house is mine, after it's finished, or do I have to jump through some other hoops?

Cheers

Mon and Kurt

Are you married to Mon. Is Mon the owner of the land? If you are married do you have you registered a prenup before marriage?

Generally the owner of the land becomes the owner of the things fixed to, or forming a body with the land. You can own the house as a foreigner, but when the usufruct ends your right to own the house ends. This right to own the house (if you lease land or have a usufruct) basically is limited to your rights to use the land.

The best advice is if you pay for the house and want to own the house is to register a separate superficies in addition to the usufruct. This could be problematic to explain to the land office, but this is according to Thai law and there is legally no reason not to allow you a superficies granting you the right to own the buildings on the land in addition to the usufruct.

What is the reason you want to have separate ownership over the house?

Under the Thai laws, property of a married couple is regarded as joint ownership. So, to protect both husband and wife, diversion of assets does require an acknowledgement of the other. However, in practice, in the case of buying, sometimes the Land Department can make do without that consent because they view this as an increment of wealth and beneficial to the spouse. But for selling, it is definitely a must that a consent of the other party should be there.

If you are single, then you will not be required to present that consent letter and allowed to own the property.

If have registered a prenup or ante-nuptial agreement before marriage and the money comes from your personal assets you of course do not need a letter of consent from your Thai spouse. They could ask for it of course, but then you have to prove that all money used for the purchase comes from personal property according to section 1471 and 1472 of the Civil and Commercial Code.