Residential Lease / Userfruct. What you need to know.

The first thing to understand is that title to the structure of the house and title to the land are normally the same thing. This is because when you own chanote-titled land in Thailand you own everything on it. This is the same in many countries. There is very little freehold/leasehold of houses and land in Thailand, although it can be done.

If a piece of land has an existing house or structure on it then it is going to be difficult to split the title for the structure away from the title of the land. If, however, you build a house or structure from new then there is much more chance of separating the title.

However, even if you build a new house you still need the land owner's permission to put your newly built property on their land, so you end up in the position of needing a lease or a usufruct.

A residential lease can be for a maximum of 30 years. After this period you have no rights to an extension unless the land owner agrees. A lessor can give a lessee a contract of any length or duration, however a residential contract longer than 30 years will not be valid if anyone tries to enforce it in Court. This is because a contract, even if entered into willingly by both parties, cannot supercede statute law.

What happens after 30 years? If your lease is for 30 years then you either leave the property under the terms of the lease, or you try to renegotiate a further lease. A new lease will of course involve payment of further sums of money. Another way of viewing a lease is paying all of your rent in advance in one go.

If you have a contract for a 30+30 year lease then if the owner of the land is content you can just keep living on the land. However if the land owner wants you to vacate then things could get a little messy as ultimately the law will be on the land owners side. Consider that the original owner may sell the land to another party before the 30 years has expired, or more commonly, the original lessor dies and their beneficiaries now own the land. The beneficiaries may wish to sell the land at full market value, which would mean they would not agree to another lease, or that they would not honour the original 30+30 year contract. In Thai law, they are certainly not bound to honour the +30 part of the contract.

Another option is to have a usufruct for the duration of your life over the land and everything on the land including any buildings. With a usufruct for life you have the right to occupy, improve and use the land in a non-destructive way until you die. Understand though that with a usufruct you do not own the land. The land will have to belong to someone else, and when you die the encumbrance will be removed and the owner can take possession of the land and anything on it.

A third way is to own the land through a limited company. This option has downsides and upsides. It can work well, or if you involve the wrong people you can lose everything. Buyer beware with this one.

Thanks to @blackcabfor this explanation, which I am sure will be of use and help to many.