Usufruct Or Superficies

[Sunbelt Asia]

Sunbelt, i don't agree with your latter statement BUT ARGUE IN YOUR FAVOUR!

I know, that is why I said Thank you.

quite confusing. to the best of my knowledge my 6 months old house was never recorded/registered in the land office. for whatever strange reasons i received the "blue book" shortly after buying the land through my company BEFORE construction started. my builder thought i was joking till i showed him the document. nobody ever told me that the building has to be recorded too.

anyway, i will contact you personally as soon as possible to obtain legal advice. the only question remains whether your services are rendered in BKK only or in "remote" areas like Pattaya too. i recall that your offices are located in BKK. do i need an appointment? can you advice me by PM or e-mail what documents i have to prepare for that appointment?

The reason you’ve got the land transferred into your company’s name and then having the house registration booklet (blue book) without having to record the house with the Land Office is because they (Land Office and District Office) are different government sectors. You can record the house into the land when you sell both items (house and land) at the same time in the future.

If you have sold the two items separately, the Buyer of the Land will get the Title Deed Certificate and the official purchase agreement (issued by the Land Office). The Buyer of the House will only get the official purchase agreement (issued by the Land Office). As you would be aware that the Land Office will not register the transfer of the house (only) ownership in the first initial contact. But instead, they will take record your petition and it is your duty to advertise the selling of the house for a period of 30 days. After the 30 days period you can then register the transfer of the house ownership.

The transfer fees and expenses involved is very much the same as the transferring of the land except for the measurement used to calculate are square meters and not square Wah

We do provide service outside Bangkok and as for Pattaya we have a branch office with licensed Thai lawyers.

We look forward to working with you.

www.sunbeltasiagroup.com

02-642-0213

[THAIJAMES]

Usufruct Or Superficies are they the same thing or different agreements?

if they are different can someone please explain the difference?

Thanks in advance.

[Arkady]

Usufruct Or Superficies are they the same thing or different agreements?

if they are different can someone please explain the difference?

Thanks in advance.

Usufruct is the right to use and earn income from the land. Superficies refers to a structure on the land which can be owned separately by foreigners in certain circumstance, as described in this thread. These terms along with the word servitude which you will see in this or other threads, meaning the granting of a usufruct, are taken from Roman law. Interestingly, usufruct and servitude were in fact generally used in Roman laws relating to ownership and use of slaves but were also used to refer to land.

[THAIJAMES]

Thanks rkady for clearing that up. I suppose this means that these are done at the same time in the same agreement?

Usufruct Or Superficies are they the same thing or different agreements?

if they are different can someone please explain the difference?

Thanks in advance.

Usufruct is the right to use and earn income from the land. Superficies refers to a structure on the land which can be owned separately by foreigners in certain circumstance, as described in this thread. These terms along with the word servitude which you will see in this or other threads, meaning the granting of a usufruct, are taken from Roman law. Interestingly, usufruct and servitude were in fact generally used in Roman laws relating to ownership and use of slaves but were also used to refer to land.

[lannarebirth]

Here's a pretty good explanation:

http://www.iamkohchang.com/Real_Estate/leases.htm

[Arkady]

Here's a pretty good explanation:

http://www.iamkohchang.com/Real_Estate/leases.htm

This explanation is quite well written although the website admits that it was collated from various other websites. One point raised is bothersome for people wanting to switch from company ownership to usufruct. If your company sells your land and house to your Thai wife and you do a lifetime usufruct, you pay only B100 tax (presumably because it is a deal between spouses) but you cannot then use the house for business. This is likely to be a problem, since the company still needs a registered address where the Revenue and Labour Depts and other officials can find it. Does this mean that you have to rent an office somewhere and change the registered address? Could this be avoided by paying the full tax as if you were not married which might be less than a couple of years of renting an office that you don't want? Usufructories normally have the right to sublet. So is there a way for your company to rent at least a room or two from you at a nominal rent? Even if you want to close down the company after transferring the land, this will take a couple of years during which time you will still need a registered company address.

On another webboard I have just seen a posting from some one who said his lawyer, who is a law professor in Bangkok, has assured him that the Lands Dept has stopped registering usufructs nationwide. I have heard from one legal advisors that some Land Offices have refused a lifetime ususfruct and have only allowed 30 years. Any comments?

[LoveDaBlues]

Here's a pretty good explanation:

http://www.iamkohchang.com/Real_Estate/leases.htm

This explanation is quite well written although the website admits that it was collated from various other websites. One point raised is bothersome for people wanting to switch from company ownership to usufruct. If your company sells your land and house to your Thai wife and you do a lifetime usufruct, you pay only B100 tax (presumably because it is a deal between spouses) but you cannot then use the house for business. This is likely to be a problem, since the company still needs a registered address where the Revenue and Labour Depts and other officials can find it. Does this mean that you have to rent an office somewhere and change the registered address? Could this be avoided by paying the full tax as if you were not married which might be less than a couple of years of renting an office that you don't want? Usufructories normally have the right to sublet. So is there a way for your company to rent at least a room or two from you at a nominal rent? Even if you want to close down the company after transferring the land, this will take a couple of years during which time you will still need a registered company address.

On another webboard I have just seen a posting from some one who said his lawyer, who is a law professor in Bangkok, has assured him that the Lands Dept has stopped registering usufructs nationwide. I have heard from one legal advisors that some Land Offices have refused a lifetime ususfruct and have only allowed 30 years. Any comments?

The lawyer I am in contact with and I believe to be fair/honest (but we never really know do we?) has advised me the best route for me to go is the lifetime superficie over the usufruct or 30 year lease. This lawyer did not mention anything about the land office stopping the registration of the usufruct; rather showed me the weakness of the usufruct. I will probably meet this week with the attorney and hope to have the superficie registered within a week or two at the most.

[scotsman]

I can tell you that the land office in pattaya would not give me a usufruct for life It would have taken more time & money for my solicitors to fight for this right so I only got 30 years ,its very difficult to get a usufruct for life in pattaya.

[Mobi]

I can tell you that the land office in pattaya would not give me a usufruct for life It would have taken more time & money for my solicitors to fight for this right so I only got 30 years ,its very difficult to get a usufruct for life in pattaya.

Yes, that's quite correct. In fact when I was doing all this last year, I'd already given up on getting a lifetime one, but couldn't complete that day as it was too late.

When I came back the following week, Sunbelt had worked some magic, and upon payment of a not inconsiderable consideration, I got my lifetime usufruct.

I suspect it will become increasingly difficult to go this route.

Edited February 26, 2007 by Mobi D'Ark

[Arkady]

The lawyer I am in contact with and I believe to be fair/honest (but we never really know do we?) has advised me the best route for me to go is the lifetime superficie over the usufruct or 30 year lease. This lawyer did not mention anything about the land office stopping the registration of the usufruct; rather showed me the weakness of the usufruct. I will probably meet this week with the attorney and hope to have the superficie registered within a week or two at the most.

What is the weakness of the usufruct compared to superficies? Superficies would seem to be potentially awkward if you don't also have a lease or a usufruct on the land.

[Sunbelt Asia]

Here's a pretty good explanation:

http://www.iamkohchang.com/Real_Estate/leases.htm

Boy it sure looks like the post I wrote back in August 2006...

http://www.thaivisa.com/forum/index.php?s=...st&p=858898

It appears the company registration has slowed down in Bangkok. We still are busy ourselves but find that it takes only one day to reserve companies names by the Internet these days. The norm before was 2-3 days.

The new guidelines for land purchased with Thai companies was release on July 21st. I posted that in a earlier post. Still it does not help if you run into the wrong officer who is carrying the Thai Flag and a lapal pin wirh the words... Farang. Get out!

" So what? What about the letter " might be the response you hear and they simply do not want to see a foreigner anywhere on the company and will reject it before even looking at the money breakdown. Many others if you follow the guidelines are fine. In that case of a officer who doesn't agree with the guidelines, it is a matter of coming back another day to a officer who follows the rules.

The big key is Thais must have more money invested than the foreigners and you have to show where that money came from. The Thai law says a foreigner holding 49% of the shares, the money capital % is higher on the Thai side ( including any loan to the company) along with more Thais than farang shareholders having shares( not nominees, they must have voting rights and possible dividends) this then is not a "alien company" and can own land. The other stipulation is it must be a real trading company and file tax returns. Do that, you should be home free unless you run into a right wing officer who screeches when she sees a farang name.

More and more people are going with the right of habitation, superficies and usufruct. It often has been misunderstood this is only for 30 years but every land dept official has stated it can be for life of the foreign right holder, as long as it is not a company involved. In regards to the usufruct, it does not expire upon the death of the usufructuary, if it has been leased to a third person( then only in this case a 30 year lease applies with the third party lease.

One additional comment, it should be no problem except several hours at the Land dept if their is a man and wife around to get the right of habitation, superficies and usufruct registered for less than 100 Baht. If it is a farang getting the right of habitation, superficies and usufruct registered with no relation to the land owner, their should be a benefit. This is similar to key money in the contract. You get taxed at 1.5% not 1.25% as a standard 30 year lease.

Example of a Married Man to a Thai and Right of Habitation:

A husband married to a Thai Lady is granted a right of habitation on the land and house. No tax is collected for the right except 100 Baht or less. He can have that right till he dies. The agreement is for his life and is registered on the title deed. He also gets issue a "yellow Book" which is a House Registration Certificate (Thor.Ror.13), which is given to foreigners. His wife should have a will leaving the land and house to him.( if the house is not in his name) The right of habitation is used when the house and land purchase was combined. The husband cannot operate a business at this location. By the way, the husband has no rights to the ownership of the land unless she dies, as he signed a declaration that it was a gift and he is not expecting anything back, it is her money now to buy the land.

Example of a Single Male and Usufruct:

A farang is not married. He talks to a seller of a plot of land. He gets a usufruct instead of buying the land and pays 5 million Baht for that right to use and enjoy the property as well as management of the property. The government fees are 75,000 Baht. The agreement is for his life and is registered on the title deed. He also gets issue a "yellow Book" which is a House Registration Certificate (Thor.Ror.13), which is given to foreigners. With the usufruct, he can sell or transfer the right. If the house burns down, the usufruct ends until it is restored. This is why insurance is important to be paid to the benefit of the owner. A inventory should be taken and registered with the usufruct. If he has transfer the usufruct to a third party, it does not end on his death but when the 30 year term expires for the third party.

Example of a Farang Couple and Superficies:

A farang couple want to retire in Thailand. They find a plot of land and want to build a house and register a superficies for both of their natural lives. They are given the right to own, upon or under the land, buildings, structures or plantations. The right was granted for 2 million Baht and the tax due was 30,000 Baht. This right can be transferred and transmissible by way of inheritance. If the farang husband dies, the wife can still live on the property and can even leave in her will. A 30 year term than applies to the person who inherits the right. Both husband and wife are registered on the title deed. They also get issue a "yellow Book" which is a House Registration Certificate (Thor.Ror.13), which is given to foreigners. This agreement is common when it is a plot of land and the house has to be built.

Example of a Single Farang Lady and a Thirty Year Lease:

She would like to stay in Thailand and finds some beach front property. She obtains a 30 year lease plus a option of 30 years. The real rights are only the 30 years to have the use or benefit of the property and no guarantee she will ever get the additional 30 years. The land lease ends when she dies. The government has a charged tax of 1.25% on the 30 years lease. (rent must be charged)

He does mention our firm here...

The usufruct would be registered with a 1.5% tax of the value of the benefit - if you are not married to a Thai wife or a tax of 100 Baht if you are. Associated costs from SunbeltAsia law firm in Bangkok are , as of Sept 2006, 9,500 Baht for the drafting of the agreement, 8,500 Baht for registration of the usufruct, House Registration Certificate (yellow book Thor Ror 13) plus professional registration fees of 8,800 Baht.

www.sunbeltasiagroup.com

[Sunbelt Asia]

This explanation is quite well written although the website admits that it was collated from various other websites.

More like www.thaivisa.com

One point raised is bothersome for people wanting to switch from company ownership to usufruct. If your company sells your land and house to your Thai wife and you do a lifetime usufruct, you pay only B100 tax (presumably because it is a deal between spouses) but you cannot then use the house for business.

The person holding the usufruct does a lease with the company.

This is likely to be a problem, since the company still needs a registered address where the Revenue and Labour Depts and other officials can find it. Does this mean that you have to rent an office somewhere and change the registered address?

no

Could this be avoided by paying the full tax as if you were not married which might be less than a couple of years of renting an office that you don't want?

It is not that complicated.

Usufructories normally have the right to sublet. So is there a way for your company to rent at least a room or two from you at a nominal rent?

Yes

Even if you want to close down the company after transferring the land, this will take a couple of years during which time you will still need a registered company address.

correct

On another webboard I have just seen a posting from some one who said his lawyer, who is a law professor in Bangkok, has assured him that the Lands Dept has stopped registering usufructs nationwide.

Not correct We did one yesterday.

I have heard from one legal advisors that some Land Offices have refused a lifetime ususfruct and have only allowed 30 years. Any comments?

It has happen with some Land Offices but we always have fought for the client and won in the end. We have not been having a problem in Pattaya lately with lifetime usufructs.

www.sunbeltasiagroup.com

[Arkady]

Thanks for the good reply Sunbelt. The Koh Chang web page really does look like your August post. I suppose that is the sincerest form of flattery.