USUFRUCT, tricks and traps?

[steevjee]

Hi and thanks in advance for your input.

Considering buying a Villa and utilising Usufruct so that it can be in my name and also in the hope that I can pass it on to my daughter after my demise.

Is this do-able? Is there traps I should be aware of?

[BritManToo]

Don't do it!

[ukrules]

  On 3/9/2024 at 10:55 AM, BritManToo said:

Don't do it!

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Why not?

[NoDisplayName]

  On 3/9/2024 at 10:36 AM, steevjee said:

Hi and thanks in advance for your input.

Considering buying a Villa and utilising Usufruct so that it can be in my name and also in the hope that I can pass it on to my daughter after my demise.

Is this do-able? Is there traps I should be aware of?

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Whose name will the villa be in upon purchase?

How old is your daughter?

[retarius]

  On 3/9/2024 at 10:36 AM, steevjee said:

Hi and thanks in advance for your input.

Considering buying a Villa and utilising Usufruct so that it can be in my name and also in the hope that I can pass it on to my daughter after my demise.

Is this do-able? Is there traps I should be aware of?

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Not enough info.

[UWEB]

  On 3/9/2024 at 10:36 AM, steevjee said:

Hi and thanks in advance for your input.

Considering buying a Villa and utilising Usufruct so that it can be in my name and also in the hope that I can pass it on to my daughter after my demise.

Is this do-able? Is there traps I should be aware of?

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USUFRUCT LAWS IN THAILAND

The right of usufruct transfers possession, use and enjoyment of an immovable property from the owner to the usufructuary. Usufruct can only be registered over properly titled immovable property and is established by agreement with the owner and registration at the local land office. The contract or memorandum for usufruct is the legal document that states and confirms the formal agreement between the owner and the usufructuary (the person granted the right of usufruct).

A few facts about usufruct in Thailand

• The usufructuary does not obtain the title to the property, nor can he sell or consume the property;
• The usufructuary must take as much care of the property as a person of ordinary prudence would take of his own property;
• The usufructuary is NOT allowed to transfer the right of usufruct, but he is allowed transfer the exercise of his right under the usufruct to another person contrary to the right of habitation (the person granted a right of habitation cannot transfer the exercise of his rights);
• The usufruct does not prevent sale of the property by the owner, but sale of the property does not terminate the usufruct nor the rights of the usufructuary. Usufruct is not a contract right but a real (property) right and as a real right usufruct is a burden on the property itself (any new owner automatically takes the property subject to/ including the right right of usufruct);
• The usufruct is not transferable by inheritance (i.e. the usufruct is automatically terminated upon the usufructuary's death (but not the owner's death));
• The usufruct is governed by the sections 1417 to 1428 Civil and Commercial Code (see law translation below)

Thailand Usufruct Real Estate Laws Usufruct in Thailand.Fetching info...

[KhunLA]

Think OP needs to research what a usufruct is for and it's limitations.

 

HINT: the usufruct dies when you do

[ExpatOilWorker]

You plan to buy the villa in your daughter's name and secure user right, by having a usufruct in ur own name.

Should be doable, with only two minor issues. 

1. Max 30 years, so if you are young and have a fallout with your daughter, you will be sent packing after 30 years.

2. A bit morbid, but say your daughter get mixed up with the wrong people and get a bf that are on drugs. You have now broken the #1 rule in the farang survival book: Never be worth more dead than alive.

[theblether]

Things to be aware of: 

 

1. A high profile farang in Chiang Mai put the house in his daughters name and when she reached maturity she moved the bitch ex-wife into the house ( her mother ) and kicked out her dad. He'd built his dream home and wasn't even allowed in the garden. 

 

2. The Usufruct is effectively worthless if your wife dies and you lose the will to live in the remote village alone. This is overlooked by too many expats. 

3. The Usufruct is worthless if her family, after her demise, set out to intimidate you out of the house. A famous example years ago was the wife's family showing up the day after the funeral and ordering the guy out. He stood his ground ( miracle in itself ) and managed to sell the house at a fire-sale price just to p*ss the family off. Living there long term in the midst of animosity was never going to work. 

 

Too many people regard the Usufruct as a solution without considering the emotional reality of being isolated after your partners death, or family issues coming the fore.  

[jojothai]

  On 3/9/2024 at 12:08 PM, KhunLA said:

Think OP needs to research what a usufruct is for and it's limitations.

 

HINT: the usufruct dies when you do

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Yes, and research how to get it done if he chooses to do it.

It needs to be done at the land office and is added to the Chanote. 
It is only the use of the property with no other rights, see the post from UWEB.
 

There is a standard form at the land office which should be negligible cost, but you will have to pay to get it done.
I had to pay 10,000 Baht on a villa valued at 5 million baht.
Cost was high compared to what i had heard from others, but it was a matter of just getting it done quickly while the wife agreed.

 

[Woof999]

  On 3/9/2024 at 1:42 PM, jojothai said:

It is only the use of the property with no other rights, see the post from UWEB.

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It's a little bit more than that as in you have full entitlement to use the property and reap the reward. ie you could create a long term lease to a third party (not a transfer of the usufruct itself).

 

  On 3/9/2024 at 1:42 PM, jojothai said:

I had to pay 10,000 Baht on a villa valued at 5 million baht.

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My understanding is that a usufruct has a fixed fee and no remuneration is needed between the person obtaining the usufruct and the chanote holder. I paid 75 baht last week for a 30 year usufruct on 14+ rai of land.

 

[Woof999]

  On 3/9/2024 at 10:55 AM, BritManToo said:

Don't do it!

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Depends on circumstances. Many people say there is too much risk and you can lose everything. In the first 9 years of my living here, I spent almost 6M baht on rent. Rent is always money lost, even though it offers advantages (otherwise I wouldn't have rented for 9 years).

[jojothai]

  On 3/9/2024 at 2:02 PM, Woof999 said:

My understanding is that a usufruct has a fixed fee and no remuneration is needed between the person obtaining the usufruct and the chanote holder. I paid 75 baht last week for a 30 year usufruct on 14+ rai of land.

 

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As I said it should be a small cost.
However land offices make their own fees to process things. TIT.

[KhunLA]

  On 3/9/2024 at 1:42 PM, jojothai said:

Yes, and research how to get it done if he chooses to do it.

It needs to be done at the land office and is added to the Chanote. 
It is only the use of the property with no other rights, see the post from UWEB.
 

There is a standard form at the land office which should be negligible cost, but you will have to pay to get it done.
I had to pay 10,000 Baht on a villa valued at 5 million baht.
Cost was high compared to what i had heard from others, but it was a matter of just getting it done quickly while the wife agreed.

 

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Every one I did cost <100 baht at the land office, and was for 'use & modify', as 2 types available.  Did 6 @ Udon Thani and 2 at Prachuap Khiri Khan.

[Woof999]

  On 3/9/2024 at 2:10 PM, jojothai said:

However land offices make their own fees to process things. TIT.

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Now that is a fact! 😉

[MangoKorat]

  On 3/9/2024 at 12:18 PM, ExpatOilWorker said:

1. Max 30 years, so if you are young and have a fallout with your daughter, you will be sent packing after 30 years.

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Incorrect.  A Usufruct is not a lease and unless specified only ends on death of the usufructuary.

[MangoKorat]

Some nonsense being talked here as usual.

 

OP, firstly a Usufruct is accepted in Thai law provided it is set out and worded correctly in accordance with the Land Code. It also must be registered on the title at the land office. To make sure that the clauses are accepted in Thai law, use a good Thai lawyer.

 

You cannot transfer the Usufruct upon death or otherwise but you can take out a Usufruct jointly with your daughter when she comes of age - provided the Usufructor agrees.  That usufruct would end upon the death of whoever dies last.

 

There are people here advising you on the basis that you are building a house on family land in 'the village' when you clearly state that you want to buy a villa.  Providing the land is nowhere near and not in any way connected to your wife's family or friends - you shouldn't have any problems in the event of a relationship breakdown.

[MangoKorat]

  On 3/9/2024 at 10:36 AM, steevjee said:

Considering buying a Villa and utilising Usufruct so that it can be in my name

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The land will not be in your name but your name (normally in Thai) will be in the entry on the rear of the Chanotte.

 

The house itself (bricks and mortar) can be in your name and a specific deed to that effect can be issued to you.

 

The difference between having a Usufruct on the land only or one on the land and buildings thereon is that if you wish to end the Usufruct, you can remove the house if its in your name. Although its doubtfull, the owner can insist you remove any buildings built on the land after the date of the agreement.

 

If you wish to end a Usufruct that covers land and buildings the owner can insist that the buildings are in a condition similar to what it was when you took out the Usufruct unless the agreement specifically states otherwise. In other words, there is an obligation for you to maintain the property.

 

If you (your wife) buy land that already contains a house, I'm not sure that they can be separated again - check with a lawyer.  Although the chanotte will only refer to the land, Land Offices are now starting to include buildings in their valuation so they may have those details on file.

 

It all seems very messy to me, I'd just take out a Usufruct on the lot, I wouldn't try to own the house but some do.

 

The Usufruct agreement is not required to and does not contain any price you may have paid in consideration.  Therefore there is no tax payable on the agreement.

 

However, let's presume that what you are talking about is your wife buying the house/land and then granting you a Usufruct - the transaction between the then owner and your wife will be subject to the usual transfer taxes.  Who pays them is usually agreed on sale and you should clarify that before your wife buys it.

[Celsius]

Good day and thank you for your inquiry.

 

Whether or not you should get a usufruct depends on your individual circumstances and goals. Usufruct is a legal right to use and enjoy the benefits of someone else's property, without owning it. It can have various advantages and disadvantages depending on the specific situation. It is important to consider factors such as your relationship with the property owner, the duration of the usufruct, any associated costs or responsibilities, and how it aligns with your overall financial and estate planning goals. Before making a decision, it may be helpful to consult with a legal professional who can provide guidance based on your specific needs and circumstances.

 

Source: Chat GPT

[Peterw42]

  On 3/9/2024 at 3:13 PM, MangoKorat said:

The house itself (bricks and mortar) can be in your name and a specific deed to that effect can be issued to you.

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I think you will find that is not correct, there are no title deeds for structures. Yes you can own the structure but the documents to show ownership are the receipts from building the house. If a house and land already exists, the structure cannot be separated from the land.

Its really a moot point, unless the house is portable and can be moved, it serves no purpose to own a structure. 

[Henryford]

If the Thai owner really wants you out you think a piece of paper will help? They could make your life hell till you left.

[ExpatOilWorker]

  On 3/9/2024 at 2:39 PM, MangoKorat said:

Incorrect.  A Usufruct is not a lease and unless specified only ends on death of the usufructuary.

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You are correct, thanks.

The 30 years does in a funny way make it possible to assign the user right beyond the grave.

 

"An interesting feature of usufruct is that the usufructuary can enter into a 30-year lease with a third party. So if the usufructuary signed a 30-year lease contract before his death, the lessee (tenant) will maintain the rights of the lease until its expiration."

https://www.siam-legal.com/realestate/Usufructs.php

[taninthai]

  On 3/9/2024 at 11:27 PM, Peterw42 said:

 

I think you will find that is not correct, there are no title deeds for structures. Yes you can own the structure but the documents to show ownership are the receipts from building the house. If a house and land already exists, the structure cannot be separated from the land.

Its really a moot point, unless the house is portable and can be moved, it serves no purpose to own a structure. 

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Correct……I have usufruct think house not even built when got my usufruct …..one day immigration asking for rental contract,,,,,I told them my house I not pay rent ,,,,they ask for proof🤣🤣🤣🤣🤣🤣this is when I discovered it goes by original building permit receipts etc etc………..now I just tell them ex wife’s house I stay for free🤣🤣🤣

[jaideedave]

  On 3/9/2024 at 1:42 PM, jojothai said:

Yes, and research how to get it done if he chooses to do it.

It needs to be done at the land office and is added to the Chanote. 
It is only the use of the property with no other rights, see the post from UWEB.
 

There is a standard form at the land office which should be negligible cost, but you will have to pay to get it done.
I had to pay 10,000 Baht on a villa valued at 5 million baht.
Cost was high compared to what i had heard from others, but it was a matter of just getting it done quickly while the wife agreed.
"J" my situation is similar to yours.I put the house in my stepdaughters name and I took out out a 30 year lease done through a lawyer at the land office.My name is on the chanote as a lessee. We tried without a lawyer but the corruption was way too heavy. It cost me 30k for the lawyer but it was done efficiently and accurate. For that I have peace of mind. 
 

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[VinnieK]

Rule #1

Don't make your life more complicated that it normally is.

The less complicated (and minimalistic) the better.

Don't buy sh!t.

Cash is king.

Don't trust anyone incl. family members

esp. the ones not blood-related

 

[TroubleandGrumpy]

Go see a lawyer - most of what I have just read is wrong or misleading - depending on your own situation.  Laws in Thailand are not one size fits all - get legal advice.

IMO the option of you and your daughter both buying the property jointly, and you holding a Usufruct to exclusive occupation could be achievable. 

Talk to a lawyer. DM for a name.

[topt]

  On 3/10/2024 at 5:24 AM, TroubleandGrumpy said:

most of what I have just read is wrong or misleading -

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Disagree.

 

However please explain how this works as a foreigner -

  On 3/10/2024 at 5:24 AM, TroubleandGrumpy said:

you and your daughter both buying the property jointly

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[TroubleandGrumpy]

  On 3/10/2024 at 6:45 AM, topt said:

Disagree.

However please explain how this works as a foreigner -

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No thanks - far too complicated and things vary person to person. Go see a lawyer. 

Property can be purchased in joint names - you understand that I assume. 

Right of occupation can be either a joint agreement, or usufruct giving sole occupation if wanted.

Usufruct is not about passing on the ownership of property - it is about occupation of a property owned by someone else.

OP should see a lawyer to ascertain his exact options - he has got to see one anyway before buying (unless a total idiot). 

[Mike Lister]

  On 3/10/2024 at 7:21 AM, TroubleandGrumpy said:

No thanks - far too complicated and things vary person to person. Go see a lawyer. 

Property can be purchased in joint names - you understand that I assume. 

Right of occupation can be either a joint agreement, or usufruct giving sole occupation if wanted.

Usufruct is not about passing on the ownership of property - it is about occupation of a property owned by someone else.

OP should see a lawyer to ascertain his exact options - he has got to see one anyway before buying (unless a total idiot). 

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It is not possibly for a foreigner to circumvent Thai property ownership laws by buying in joint names.

 

An usufruct is not joint, an usufruct is granted to an individual. An usufruct gives the grantee the sole right to determine who has the right to live in the property, including the right of the grantor to live there.

 

A superficies is very similar to the above but does not expire upon death and can be transferred and inherited.

 

 

 

[TroubleandGrumpy]

  On 3/10/2024 at 7:39 AM, Mike Lister said:

It is not possibly for a foreigner to circumvent Thai property ownership laws by buying in joint names.

 

An usufruct is not joint, an usufruct is granted to an individual. An usufruct gives the grantee the sole right to determine who has the right to live in the property, including the right of the grantor to live there.

 

A superficies is very similar to the above but does not expire upon death and can be transferred and inherited.

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You are wrong if you are saying foreigners (two people) cannot buy a condo/property in joint names??

 

Your other advice on usufruct is contradictory to legal advice I have received from lawyers here. But as I said to the OP and repliers - it all depends on individual circumstances (including the proeprty) - property laws in Thailand are not one size fits all.