Usufruct Advice

[cloudhopper]

My Thai spouse and I recently conferred with an atty at Sunbelt in Chiang Mai re drafting a usufruct agreement. It was his opinion that a usufruct was NOT the best way to protect my rights to the house should my spouse predecease me. He said that a usufruct was a very old law, more suited to agricultural, mining and forestry use and its suitability with respect to a house was far from clear. He recommended a lease instead, stating this was a much more clearcut and well-tested way to protect a residential property. He also thought that since the house was already built, and the permit to build with the orbortor was in my spouses name, that this would also be a problem (in the event) for a usufruct. This appears to contradict previous posts, some apparently made by Sunbelt itself, on this forum. It also appears to me that either contract could be deemed invalid in court because we are married anyway. The costs appear to be about the same either route. I'm going to go with his advice, but it seems that in my case at least there is little in the way of iron clad absolute protection available under Thai law, which also according to my atty, is sufficiently ambiguous so as to allow several interpretations anyway...

[Irene]

I used to have that view of leasing being better than usufruct route. I now change my mind after having read the below of one thread a few weeks ago:

Thailand Forum _ Real Estate, housing, house and land ownership _ Registered An Usufruct

Posted by: crewcut 2007-11-04 09:47:58

Last week I went to the land office and enquired about the possability of having a usufruct contract made between me and my wife with regards to a property we have recdently built. At first the gentleman we spoke with was unsure of how to help us, my wife then mentioned the Thai name for this process; sit-ti-gep-gin.

We made the relevant photo copies (pasport, ID, marriage, tabien ban and letter of permission to build a house on the land). The contract used was a standard document which allows me to stay in the house rent free until I die. It turns out that I was the first foriegner to ask for this to be done at their office and because of this they had to check the manuals of how to put this together and the paper work needed.

Now whether this standard contract is as full proof as one a lawyer may have drafted I don't know, but after researching this matter and thinking of my own requirements I decided following this process was the best option for me.

My wife and I have been married for 10 years and I have no reason to belive that she would ever be unfair with me if we were to split. All I wanted was something legal and official done with her approval so she would understand/think that I have rights on the property also. Knowing her, if we did split she would never question this document let alone hire a lawyer to do it for her.

You may ask why did you bother going through this process if you trust her and have no reason to doubt her future fairness?

Well the whole process at the land office took just over an hour to sort and cost me 75 baht.

I had quotes from several lawyers ranging from around 10,000 for a contract drawn up and telephone support to 70,000 for a lawyer to come with me and do the process for me. Like I said before I'm sure these contracts may have had more clauses etc, but in my situation the do-it yourself-option was the best solution.

I would encourage others who are thinking about getting an usufruct to inquire about this same process and save a few baht. If you do want other clauses added have them prepared ahead of time and expect the process to take a bit longer.

CC.

I do not know whether you will get a helpful official in Chiengmai or not but with your wife's help in speaking Thai you are likely to get that help. Definitely, it is better to pursue whatever you can now rather than holding a belief.

[old wanderer]

irene:

I could not agree more with your assessment.

Some ask why would you do such a thing if you trust your wife? It was the story posted a few years ago that got both my wife of 11 years and myself talking about this.

To repeat the old story in short: A farang married a Thai with a 7 yo daughter. He treated her daughter as his own. When the daughter was 22 YO and going to the university, her mother made a trip to the local ATM on her motorbike. She withdrew some money and got on her motorbike to return home. A PU truck struck her from behind and 2 Thai men grabbed her money and the 2 baht of gold she was wearing. She died in the hospital.

6 months later his "daughter" who title of his house had passed on the passing of her mother, announced he would have to move as she was selling the house, and taking the money to travel a bit with her Thai boyfriend. There was absolutely nothing he could do.

If he had a USUFRUCT there would have been no problem as the daughter could have sold the house, but he would have had an absolute right to continue to live there, or lease it out to somebody else, until he was dead.

It is not the separation or divorce that I am worried about, rather my extended Thai family, and the values they hold that are not in common with my value system. That is where the threat comes from.

[cloudhopper]

irene:

I could not agree more with your assessment.

Some ask why would you do such a thing if you trust your wife? It was the story posted a few years ago that got both my wife of 11 years and myself talking about this.

To repeat the old story in short: A farang married a Thai with a 7 yo daughter. He treated her daughter as his own. When the daughter was 22 YO and going to the university, her mother made a trip to the local ATM on her motorbike. She withdrew some money and got on her motorbike to return home. A PU truck struck her from behind and 2 Thai men grabbed her money and the 2 baht of gold she was wearing. She died in the hospital.

6 months later his "daughter" who title of his house had passed on the passing of her mother, announced he would have to move as she was selling the house, and taking the money to travel a bit with her Thai boyfriend. There was absolutely nothing he could do.

If he had a USUFRUCT there would have been no problem as the daughter could have sold the house, but he would have had an absolute right to continue to live there, or lease it out to somebody else, until he was dead.

It is not the separation or divorce that I am worried about, rather my extended Thai family, and the values they hold that are not in common with my value system. That is where the threat comes from.

Agreed. But the issue here is whether a lease or a usufruct gives the best protection in the event of a similar scenario. You claim "if he had a usufruct there would have been no problem" - but has this ever been tested in court or is it merely your personal opinion? My atty's professional opinion is that a lease gives better legal protection than a usufruct, in the event.

[chownah]

A lease can only last for 30 years max. Anything beyond 30 years is not legally recognized in any way....even if the lease calls for a renewal after 30 years the owner can just ignore this and end the agreement. So if 30 years is enough then go ahead and do a lease.

Why not do both? The usufruct only costs 75 baht....might as well!!!!

Chownah

[torrenova]

irene:

I could not agree more with your assessment.

Some ask why would you do such a thing if you trust your wife? It was the story posted a few years ago that got both my wife of 11 years and myself talking about this.

To repeat the old story in short: A farang married a Thai with a 7 yo daughter. He treated her daughter as his own. When the daughter was 22 YO and going to the university, her mother made a trip to the local ATM on her motorbike. She withdrew some money and got on her motorbike to return home. A PU truck struck her from behind and 2 Thai men grabbed her money and the 2 baht of gold she was wearing. She died in the hospital.

6 months later his "daughter" who title of his house had passed on the passing of her mother, announced he would have to move as she was selling the house, and taking the money to travel a bit with her Thai boyfriend. There was absolutely nothing he could do.

If he had a USUFRUCT there would have been no problem as the daughter could have sold the house, but he would have had an absolute right to continue to live there, or lease it out to somebody else, until he was dead.

It is not the separation or divorce that I am worried about, rather my extended Thai family, and the values they hold that are not in common with my value system. That is where the threat comes from.

And here is the real problem. If you need any legal document to protect yourself then you are admitting that the vultures will be at your door and wanting all that you own when your wife dies. Therefore, give them nothing in the first place. Don't put a house in your wife's name and then have to worry about what will happen if ....

Whether you have the right or not, the family vultures will make your life hel_l and may threaten you with violence or worse if you do not just bugger off. Wave every usufruct at them you want and they won't care. If your outlaws are like this then you can kiss your arse goodbye.

[BL4u]

My Thai spouse and I recently conferred with an atty at Sunbelt in Chiang Mai re drafting a usufruct agreement. It was his opinion that a usufruct was NOT the best way to protect my rights to the house should my spouse predecease me. He said that a usufruct was a very old law, more suited to agricultural, mining and forestry use and its suitability with respect to a house was far from clear. He recommended a lease instead, stating this was a much more clearcut and well-tested way to protect a residential property. He also thought that since the house was already built, and the permit to build with the orbortor was in my spouses name, that this would also be a problem (in the event) for a usufruct. This appears to contradict previous posts, some apparently made by Sunbelt itself, on this forum. It also appears to me that either contract could be deemed invalid in court because we are married anyway. The costs appear to be about the same either route. I'm going to go with his advice, but it seems that in my case at least there is little in the way of iron clad absolute protection available under Thai law, which also according to my atty, is sufficiently ambiguous so as to allow several interpretations anyway...

I had a discussion with a Thai lawyer who in first instance said the same as the CM lawyer, but after he checked the law he agreed it is 100% secure and legal to use it for the purpose you want to use it for.

If your objective is just protecting yourself should your wife pass away a usufruct could be the best choice. Note that having a lease with your wife also implies paying rent, which could be assessed by the Revenue Department and you will have to pay Building and Land Tax over the actual rental or assessed rental value, whichever is higher.

Let your wife confirm this usufruct in her will and/ or there is nothing against her leaving the property to you in her will. Unless the law changes, then after her death you will have to transfer the land within a year to a Thai national of your choice, who then will take the property subject to the usufruct.

A usufruct has nothing to do with being old law, or not having being tested in Court. It is 100% legal, aslo for foreigners.

Below a translation of a simple Thai usufruct contract I found on the Internet.

Made at: ______

Dated: ______

This contract is made between:

Mr./Mrs./Miss ______ residing at No ___, Soi ______, ____ Road, Tambon ______, District of ______, Province ____, hereinafter called the 'Covenantor'

and

Mr./Mrs./Miss ______, residing at No ___, Soi ______, ____ Road, Tambon ______, District of ______, Province ____, hereinafter called 'Covenantee'.

Whereas the Covenantor is the lawful owner of _________________, hereinafter called the 'Property';

Parties to this contract agree to the following terms and conditions:

1. The Covenantor agrees to grant the Covenantee the usufruct of the Property, with possession, use and enjoyment of the said Property, as well as the right of management of the Property.

2. Such usufruct rights shall remain enforce for a period of ___ years (or throughout the life of ___)

3. In case of death of the Covenantee prior to expiration of the rights of usufruct granted herein, this contract shall be deemed extinguished, and shall not be transferable by way of inheritance.

4. In using the usufruct, the Covenantee shall take as much care of the Property as a person of ordinary prudence would take of his own property.

5. The Covenantee shall not transfer the usufruct to any other persons or unrelated outsiders, except with the Covenantor’s prior written consent.

6. The Covenantee shall not use the Property for any unlawful purposes.

7. The Covenantee shall keep the substance of the Property unaltered; and shall undertake ordinary maintenance and petty repairs.

8. The Covenantee shall bear all expenses for the management of the Property; pay taxes and duties; and be responsible for all interest payments on debts charged upon it.

9. The Covenantee shall insure the Property against loss for the benefit of the Covenantor throughout the period of this contract; the insurance premium of which shall be borne by the Covenantee.

10. In case of breach of contract by one party, the other party has the right to terminate the contract.

This contract is made in duplicate. The parties to the contract having read and understood the entire substance of the contract hereby sign their names in the presence of witnesses.

Signed __________ Covenantor

Signed __________ Covenantee

Signed __________ Witness

Signed __________ Witness

[Bomonster]

all well and good , but i asked a question 2 weeks ago "Has anybody had one done in Pattaya in the last 3 months" and there were no replys. the land office told me they had stopped doing them.......

My Thai spouse and I recently conferred with an atty at Sunbelt in Chiang Mai re drafting a usufruct agreement. It was his opinion that a usufruct was NOT the best way to protect my rights to the house should my spouse predecease me. He said that a usufruct was a very old law, more suited to agricultural, mining and forestry use and its suitability with respect to a house was far from clear. He recommended a lease instead, stating this was a much more clearcut and well-tested way to protect a residential property. He also thought that since the house was already built, and the permit to build with the orbortor was in my spouses name, that this would also be a problem (in the event) for a usufruct. This appears to contradict previous posts, some apparently made by Sunbelt itself, on this forum. It also appears to me that either contract could be deemed invalid in court because we are married anyway. The costs appear to be about the same either route. I'm going to go with his advice, but it seems that in my case at least there is little in the way of iron clad absolute protection available under Thai law, which also according to my atty, is sufficiently ambiguous so as to allow several interpretations anyway...

I had a discussion with a Thai lawyer who in first instance said the same as the CM lawyer, but after he checked the law he agreed it is 100% secure and legal to use it for the purpose you want to use it for.

If your objective is just protecting yourself should your wife pass away a usufruct could be the best choice. Note that having a lease with your wife also implies paying rent, which could be assessed by the Revenue Department and you will have to pay Building and Land Tax over the actual rental or assessed rental value, whichever is higher.

Let your wife confirm this usufruct in her will and/ or there is nothing against her leaving the property to you in her will. Unless the law changes, then after her death you will have to transfer the land within a year to a Thai national of your choice, who then will take the property subject to the usufruct.

A usufruct has nothing to do with being old law, or not having being tested in Court. It is 100% legal, aslo for foreigners.

Below a translation of a simple Thai usufruct contract I found on the Internet.

Made at: ______

Dated: ______

This contract is made between:

Mr./Mrs./Miss ______ residing at No ___, Soi ______, ____ Road, Tambon ______, District of ______, Province ____, hereinafter called the 'Covenantor'

and

Mr./Mrs./Miss ______, residing at No ___, Soi ______, ____ Road, Tambon ______, District of ______, Province ____, hereinafter called 'Covenantee'.

Whereas the Covenantor is the lawful owner of _________________, hereinafter called the 'Property';

Parties to this contract agree to the following terms and conditions:

1. The Covenantor agrees to grant the Covenantee the usufruct of the Property, with possession, use and enjoyment of the said Property, as well as the right of management of the Property.

2. Such usufruct rights shall remain enforce for a period of ___ years (or throughout the life of ___)

3. In case of death of the Covenantee prior to expiration of the rights of usufruct granted herein, this contract shall be deemed extinguished, and shall not be transferable by way of inheritance.

4. In using the usufruct, the Covenantee shall take as much care of the Property as a person of ordinary prudence would take of his own property.

5. The Covenantee shall not transfer the usufruct to any other persons or unrelated outsiders, except with the Covenantor's prior written consent.

6. The Covenantee shall not use the Property for any unlawful purposes.

7. The Covenantee shall keep the substance of the Property unaltered; and shall undertake ordinary maintenance and petty repairs.

8. The Covenantee shall bear all expenses for the management of the Property; pay taxes and duties; and be responsible for all interest payments on debts charged upon it.

9. The Covenantee shall insure the Property against loss for the benefit of the Covenantor throughout the period of this contract; the insurance premium of which shall be borne by the Covenantee.

10. In case of breach of contract by one party, the other party has the right to terminate the contract.

This contract is made in duplicate. The parties to the contract having read and understood the entire substance of the contract hereby sign their names in the presence of witnesses.

Signed __________ Covenantor

Signed __________ Covenantee

Signed __________ Witness

Signed __________ Witness

[ade100]

So if I understand correctly a usufruct is a right to occupation of the property. So Foreign spouse could pay for the property, Thai spouse would be the legal owner, but Foreign spouse gets to live there as long as he/she chooses.

If it is sold, Thai spouse gets to pocket the money. However I suppose the foreign spouse would have some bargaining power so an agreement could be arranged - maybe both parties would agree to a 50/50 split.

Have I got this right?

[LoveDaBlues]

So if I understand correctly a usufruct is a right to occupation of the property. So Foreign spouse could pay for the property, Thai spouse would be the legal owner, but Foreign spouse gets to live there as long as he/she chooses.

If it is sold, Thai spouse gets to pocket the money. However I suppose the foreign spouse would have some bargaining power so an agreement could be arranged - maybe both parties would agree to a 50/50 split.

Have I got this right?

No you don't have it right IMHO. Read #1 again (with possession). The owner can't sell the property. However, I would have made this clearer by having a clause that clearly states the owner cannot sell until the usufruct has expired AND a 3rd party would hold the Chanote for the life of the usufruct. Of course register the usufruct at the Land Office for even more protection.

Basically, if the foreign spouse can convince the Thai spouse to sign..... the foreigner can live on the property for the rest of his life.....even with another lady if things go pear-shaped.

This is my opinion of course and I'm sure others will disagree.....TiT.

[apetley]

I have seen the copy of a translation of a simple Thai usufruct contract above and wonder if anyone has a link to the original or a Thai copy?

I would like to show it to my local Land Office for their view.

Thanks, Andy.

[BigA]

irene:

I could not agree more with your assessment.

Some ask why would you do such a thing if you trust your wife? It was the story posted a few years ago that got both my wife of 11 years and myself talking about this.

To repeat the old story in short: A farang married a Thai with a 7 yo daughter. He treated her daughter as his own. When the daughter was 22 YO and going to the university, her mother made a trip to the local ATM on her motorbike. She withdrew some money and got on her motorbike to return home. A PU truck struck her from behind and 2 Thai men grabbed her money and the 2 baht of gold she was wearing. She died in the hospital.

6 months later his "daughter" who title of his house had passed on the passing of her mother, announced he would have to move as she was selling the house, and taking the money to travel a bit with her Thai boyfriend. There was absolutely nothing he could do.

If he had a USUFRUCT there would have been no problem as the daughter could have sold the house, but he would have had an absolute right to continue to live there, or lease it out to somebody else, until he was dead.

It is not the separation or divorce that I am worried about, rather my extended Thai family, and the values they hold that are not in common with my value system. That is where the threat comes from.

Agreed. But the issue here is whether a lease or a usufruct gives the best protection in the event of a similar scenario. You claim "if he had a usufruct there would have been no problem" - but has this ever been tested in court or is it merely your personal opinion? My atty's professional opinion is that a lease gives better legal protection than a usufruct, in the event.

I would go with a Ltd company if possible in your situation, and draw up a Thai Will to cover disposition of your assets upon your demise.

Edited December 13, 2007 by BigA

[MrSquigle]

then she can duck down to the local amphur and make up a new one and you will be none the wiser.

[ProThaiExpat]

"Lease" and "usufruct" are just labels describing contracts that are interpreted by their contents and not by their "labels"

Drawing a contract to protect a property right can be "labeled" in almost anyway but if a "lease" does not contain appropriate language, characterizing as a "lease", it could be almost anything else recognized by contract law.

My "lease" has a clause drawn by a Thai lawyer that gives me what in the west is termed a "life estate", right of exclusive possession for the remainder of my natural life. Is the a "usufruct" provision. Only law school professors are interested in such things.

Suffice to say, if the falang is the legal owner of the house, which he can be 100%, because it is personal property not real property, then he is protected as best he can be since he should care not what is done with the underlying property, since his house is a "burden on the property" as long as it is standing.

A lease of the land under his house for his "life" through a "usufruct" or a 30 year lease only strengthens his position, if additional strength is felt necessary.

Thai law is modeled after the law in the West and so you can rely on a Judge interpreting a lease according to its terms and so make sure you have a good translation of the Thai terms that will be interpreted by the Judge.

My Thai mate was furious at me for hiring a lawyer and using him at the land office at the time. I thought it was because he wanted the house and land unobstructed by a lease in my name, when in fact he was angry at spending 40K for a lease which he knew could be obtained in a standard form at the land office.

The lawyer, who I paid, to go to the land office with me, ended up having to ask the land office officials how to do it anyway. Most embarrassing for all.

After monitoring this area of T.V. postings and based on my own experience, going to the land office with a un-biased Thai speaking interpreter and following the land office staffs directions on documents needed to protect your rights as a tenant on the property is more than adequate as others have posted.

If you do get a lawyer, use a Thaivisa sponsor or a lawyer that many others have used for the same purpose since picking a lawyer from an Embassy list, as I did, ended up as I described.

There has never been a report on Thaivisa that I have seen of a falang who has been dispossessed by a court, when a lease issue has been adjudicated, despite all the hearsay horror stories afloat.

[MrSquigle]

Also be a little wary of advice from the CM sb office.

My friend up there dealt with them on 2 occasions, one a company and one a visa issue.

He still does not have the company after more than a year and the wrong advice was given re the visa for his situation. He got the visa he wanted, but through someone else.

[ThaiLawOnline]

You don't even have to go to the land department. You can do even it with a power of attorney! B ut it's interesting to go at the land department and see how they work...

What is important is understanding what you sign and having a good protection, lease, usufruct, superficies, right of cohabitation or any other that fits you.

[ProThaiExpat]

What has been posted by Issanlawyers so far is excellent advice and very balanced. Thank you for professional advice offered for free.

[dotcom]

My Thai spouse and I recently conferred with an atty at Sunbelt in Chiang Mai re drafting a usufruct agreement. It was his opinion that a usufruct was NOT the best way to protect my rights to the house should my spouse predecease me. He said that a usufruct was a very old law, more suited to agricultural, mining and forestry use and its suitability with respect to a house was far from clear. He recommended a lease instead, stating this was a much more clearcut and well-tested way to protect a residential property. He also thought that since the house was already built, and the permit to build with the orbortor was in my spouses name, that this would also be a problem (in the event) for a usufruct. This appears to contradict previous posts, some apparently made by Sunbelt itself, on this forum. It also appears to me that either contract could be deemed invalid in court because we are married anyway. The costs appear to be about the same either route. I'm going to go with his advice, but it seems that in my case at least there is little in the way of iron clad absolute protection available under Thai law, which also according to my atty, is sufficiently ambiguous so as to allow several interpretations anyway...

Something here I really don't understand. (And I am in the same situation). If my wife precedes me in death to whom would the "lease" payments go?

I have resigned myself to the fact that I am just a tenant & that I will get nothing on the disposal of that particular asset. Bearing in mind my wife & her sister bought the property before I met her. I have paid the renovations & upkeep for 28 years. C'est La Vie.

[ProThaiExpat]

A simple will in your favor from your wife would transfer the property to you for purposes of sale within a "reasonable time", perhaps a year, as you know falang cannot own property in Thailand but are given a reasonable time to dispose of property received by will.

The sale by you of the property could provide for a new document in which you are given a life estate in the property with the residual going to the new owner. Cash differential would depend on the value of the property. The consideration for the life estate would be the value of the property. Voila, no rental payments.