Usufruct In Thailand

[surayu]

Hello everyones! i got a few questions that i would be very gratefull if someone can answer them, i am about to register a usufruct on a piece of land the relative of my wife are willing to give to me(free), i included a scan of the land title as i have no idea if this is a chanote or whatever else....

1) How can i make sure is registered for "life" and not just 30 years?

2) Do i have to keep this little piece of document or a new one(the yellow book?) will be produced by the Land Office just in my name? and will the relative been holding any sort of documents at all? (maybe this one)

3) If i build anything on it will i be able to rent/sell it as i wish, without any required necessary action by the owner of the land (my wifes relatives) ?

any suggestions, good or bad are appreciated, thanks in advance!

[terrier123]

Hello everyones! i got a few questions that i would be very gratefull if someone can answer them, i am about to register a usufruct on a piece of land the relative of my wife are willing to give to me(free), i included a scan of the land title as i have no idea if this is a chanote or whatever else....

1) How can i make sure is registered for "life" and not just 30 years?

2) Do i have to keep this little piece of document or a new one(the yellow book?) will be produced by the Land Office just in my name? and will the relative been holding any sort of documents at all? (maybe this one)

3) If i build anything on it will i be able to rent/sell it as i wish, without any required necessary action by the owner of the land (my wifes relatives) ?

any suggestions, good or bad are appreciated, thanks in advance!

I'll start the ball rolling just to see how far it goes.

" A foreigner CANNOT own land in Thailand".

End of story

[barryofthailand]

Hello everyones! i got a few questions that i would be very gratefull if someone can answer them, i am about to register a usufruct on a piece of land the relative of my wife are willing to give to me(free), i included a scan of the land title as i have no idea if this is a chanote or whatever else....

1) How can i make sure is registered for "life" and not just 30 years?

2) Do i have to keep this little piece of document or a new one(the yellow book?) will be produced by the Land Office just in my name? and will the relative been holding any sort of documents at all? (maybe this one)

3) If i build anything on it will i be able to rent/sell it as i wish, without any required necessary action by the owner of the land (my wifes relatives) ?

any suggestions, good or bad are appreciated, thanks in advance!

I'll start the ball rolling just to see how far it goes.

" A foreigner CANNOT own land in Thailand".

End of story

Technically your correct, but a foreigner can loan the money to his Thai wife to purchase property, register the loan with the land office, and have his name put on the land title deed, known as the Chanut. How do I know this, Because I did it.

Barry

[thaiwanderer]

I'll start the ball rolling just to see how far it goes.

" A foreigner CANNOT own land in Thailand".

End of story

What relevance does that have to usufruct - which even in my limited knowledge is not and nor is it intended to be land ownership?

For the OP, making sure its for (your) life rather than 30 years? Speak with the land office, have your wife / her family ensure it, engage a lawyer - not sure exactly what you mean by that?

The land title deed will need to be updated - it will show who owns the land and will record your usufruct but afaik there won't be a separate deed just for your usufruct (you may want to be on the yellow book also). The current one will be out of date and I imagine the land owner will still be entitled to the original though you can obtain an official copy (they remain the land owner).

Renting / selling to another - the presumption is that you can (though its subject to the usufruct and the rights you have under that) but you will likely want to detail this right and other matters in the usufruct itself (will your estate have to pay for the removal of the building once you die and lots of other matters). However you will remain liable to the land owner for the actions on the land of whoever you rent or sell the building to.

Despite legislative indicators to the contrary IIRC in reality a farang cannot register such a lease without the land owners consent and the lease will essentially also die with your death. If this is central to your plans (or anyway) hopefully others will be along with fuller / more certain advice, do a search as usufructs have been discussed here before and typically i would counsel engaging a professional in any event.

Given the usufruct is being given for free I am a little perplexed as to why you would want the ability to lease to another without the involvement of the landowner. Registering for free involves iirc a very nominal fee but given this and your involvement the land office may have suspiscions as to whether its actually for free and smell some legitimate taxes (especially if you are also seeking to ensure the landowner's future co-operation is not necessary).

Edited June 22, 2009 by thaiwanderer

[scotsman]

Yes I did that as well with my G/f at that time but we setup a mortgage with me being the lender at the land office and it was on the land title deed, I had it removed and setup a 30 year usufruct at the same land department before we were married. I could not get a lifetime without a lot of problems and extra tea money so I settled for 30 years as i will probably be dead by then ha ha. When you build a house on the property that can be in your name as Farangs can own the building and you will get a yellow book. If you wanted to rent your house then that's no problem you can with a usufruct. Now sell the house that would be very difficult without the land as well. Your wife or whoever owns the land would have to sell the land with the house or you would find very few buyers.

Regards

Scotsman

[surayu]

1).... not sure exactly what you mean by that?

2)....there won't be a separate deed just for your usufruct (you may want to be on the yellow book also). The current one will be out of date and I imagine the land owner will still be entitled to the original though you can obtain an official copy (they remain the land owner).

3)....Renting / selling to another .... you will remain liable to the land owner for the actions on the land of whoever you rent or sell the building to.

4)....Despite legislative indicators to the contrary IIRC in reality a farang cannot register such a lease without the land owners consent

5) ...Given the usufruct is being given for free I am a little perplexed as to why you would want the ability to lease to another without the involvement of the landowner.

Hello again TW and thanks to you and all others for the precious informations, here are my explanation with some more doubt arising from what you mentioned earlier

1) It seems that a usufruct can be registered for different lenght of times and i just want to be sure this is for "life"

2) That make me a bit worry, i mean, if i will just get an "official copy" of the registered usufruct on the land deed and the land owner will retain the original documents, there is any chance that in the future the land owner can made changes or even cancel this agreement on his own and without my knowledge or comsent?

3) We can't just agree on a clause where the land owner aknowledge that any (possible)new person taking over all or part of the property will be liable for his own actions?

4) Similar to the above, a clause on which we both agree on his "automatic" comsent will not be acceptable?

5) I just see this as a "preventive" measure, just in case once the land change the way it looks like due to cospicuous investments or my personal situation changes anyhow, the land owner doesn't change his mind, i am quite confident that everything will be ok between us, however i feel the need of some sort of better "insurance", that's all.

Thanks

Reason for edit: "spelling"

Edited June 22, 2009 by surayu

[thaiwanderer]

As I said I have limited knowledge of usufructs but will give it a go:-

1) It seems that a usufruct can be registered for different lenght of times and i just want to be sure this is for "life"

- As i understand it can be registered for any length of time up to a maximum of 30 years or the life of the usufructuary (sic) ie. you (which may be longer than the 30 years). You would need to make your own arrangements as to 'certainty' as I said.

2) That make me a bit worry, i mean, if i will just get an "official copy" of the registered usufruct on the land deed and the land owner will retain the original documents, there is any chance that in the future the land owner can made changes or even cancel this agreement on his own and without my knowledge or comsent?

- Well thats always possible but the physical holding of the chanote isn't really the crucial part. The usufruct is registered at the land office not just on one bit of paper.

3) We can't just agree on a clause where the land owner aknowledge that any (possible)new person taking over all or part of the property will be liable for his own actions?

- You can of course agree any terms you want but whether they will protect and whether they would be acceptable to the land office? Appears to be going far beyond what a usufruct is and hence official xenophobic attitudes come (more) into play. Such an indemnity clause would appear to defeat the whole purpose of your continuing involvement and a prudent land owner (even in the family) would likely not agree - just as you want to 'be sure just in case' so well might they. TBH for a 'buyer' contracting with you for use of the remainder of the usufruct for your life is not the most attractive proposition by any stretch of the imagination. More likely want to have you break your usufruct and then buy/lease/ usufruct (sic) with the land owner direct.

4) Similar to the above, a clause on which we both agree on his "automatic" comsent will not be acceptable?

- Depends on the attitude of the land office official on that particular day (registering the usufruct) and on the subsequent day (registering the 'lease' on the usufruct right). The rights you have as a usufructuary are different from that as a freeholder and leaseholder. Again this may be seen as an unacceptable morphing of a usufruct beyond recognition.

5) I just see this as a "preventive" measure, just in case once the land change the way it looks like due to cospicuous investments or my personal situation changes anyhow, the land owner doesn't change his mind, i am quite confident that everything will be ok between us, however i feel the need of some sort of better "insurance", that's all.

-Understandable. All else being equal essentially the only attractive element of correctly structured and registered usufruct over a lease is the right of use for your life. However a lease has advantges missing from a usufruct also. Is regsitration of more than 30 years crucial?

[surayu]

Ok, i am going soon to have my first approach with the guys in charge of the Land Office, just to see what's theyr general attitudes towards our intentions and see what it came out of it, i will keep you informed

[Maizefarmer]

Hello everyones! i got a few questions that i would be very gratefull if someone can answer them, i am about to register a usufruct on a piece of land the relative of my wife are willing to give to me(free), i included a scan of the land title as i have no idea if this is a chanote or whatever else....

1) How can i make sure is registered for "life" and not just 30 years?

2) Do i have to keep this little piece of document or a new one(the yellow book?) will be produced by the Land Office just in my name? and will the relative been holding any sort of documents at all? (maybe this one)

3) If i build anything on it will i be able to rent/sell it as i wish, without any required necessary action by the owner of the land (my wifes relatives) ?

any suggestions, good or bad are appreciated, thanks in advance!

..... hers my 2cents on this unusual situation.

What you have is a Chanote - that is effectively full title as we undertsand it in the West.

The very first thing you want to verify is if there is any outstanding mortgage to a bank or lender - in which case they almost always have preferential titleship (so keep that in mind with respect to anything you are planning on doing with the land).... and the only way to clear that up is to check down at the land office (and then check again when you've built the house!)

To answer your questions :

1) For life, and not just 30yrs - well, firstly I don't know one way or the other if there is a reciprocal definition for "usufruct" in Thailand, and whether or not it is understood or accepted as we understand and accept it to mean in the USA or Europe. I have never heard of it (and thats having lived/worked and "owned" land in Thailand since the 1980's). To the best of my knowledge, the closest thing to a usufruct would be a 30year long lease - which can be registered in an ex-pats name with the option to renew (for a further max 30yrs) and option to cede to next of kin. Yes, both extension and next of kin can be included/added to a long lease, and most importantly: are recognised in Thai property law - but ensure that these options are written into the long lease right from the start.

Also important to remember: agree with the landowner/renter that 0 rent is applicable (if that is to be the case), and that that is how it will stay, or on a max amount that the rent can increase by on each review (and if the figure is to be 0, then have 0 included in the long lease agreement).

Also - make sure you understand liability/obligation for any land/property taxes that may be due, what planning permissions the property may be eligable for and if you are leasing the land to build a house on - get planning permission signed off before you take on responsibility of the land -else you wont be the first ex-pat tied into a long lease only to find he then couldn't build on the land, or that it was zoned industrial land and that planning permission for a stone crushing plant to be built next door, had just been granted!! ...... and on and on it goes - there are so many potential issues that need to be thought through and carefully considered (other than the generosity and good faith expressed by your partners parents) when it comes to land.

2) What docs and who gets them? In the case of a long lease, its all well documented down at the local land office - its a legal doc, and no - just like selling land that doesn't belong to one, no-one in their right mind is going to buy the land (if an attempt to sell it behind your back was made) without wanting to meet and speak to you first - at which point you'd quickly know what was up, and be able to pull out your long lease and show the prospective buyer (who would then no doubt want to have words with the seller about what to do with the "sitting tenent", or offer to buy you out if they wanted the land bad enough - and that too has happened in the past)

So, you'd get your little book, and you'd have a copy of the long lease - both legal docs in every sense of the word - and as secure as any legel/binding agreement can be in Thailand.

3) If you build can you rent/sell - without permission from the land owner? In respect of a long lease almost certainly not, as most long leases are commercial agreements which will forbid sub-letting. In your case, as its "family" so to speak (with no apparent commercial incentive), things could be different - so I don't know, and it wouldn't suprize me if they don't know either down at the local land reg office!

4) As for selling - you mean the house build on it, don't you - well, no one is going to want to buy the house without having legal title to the land (the house will have zero value otherwise) - so I would guess that is going to be no as well.

Any suggestions - good or bad?

Yes, not withstanding the good relationship that currently exists between all parties (and long may it last), I have to be honest with you - the long term stats are overwhelmingly against you. I am sorry, but that is the hard reality of cross-cultural ex-pat/Thai relationships - and when it comes to real estate (followed closely by vehcile ownership and offspring ownership - in no particular order!) - no greater disputes, involving coffee mug throwing, furniture smashing, car hiding ect ect ... take place than those which revolve around who's gettting the land/house/contents/car/kids .. and what not..... and, and this is the crucial crucial part: if the ex-pat hasn;t dotted all the I's and crossed all the T's in strict 100% accordance with the law (and not what agreed on with a nod, or some or other clause both parties just decided to add without establishing whether or not the "addition" was permittable), it is almost always the ex-pat who leaves with less than his fair share.

I'm sorry if I sound pessimistic (you did ask) - but I have seen it happen time and time again.

What you are asking about (i.e. usufruct) is not a term I have heard used in Thai property law, and I can't think of an equivilant, but if there is, you can be sure that it was not written up with ex-pats and foreigners in mind. I would stick to a well established/tried, trusted and proven way of getting and retaining access to the land: the long lease as described in para 1.

As a side note: ex-pats can legally register a charge over land as secuirty for a debt or monies owed - been there done that, and it was upheld in court when I ultimately had to go to court to get the money back (the land was sold and the buyer had to pay the funds to a 3rd party appointed by the court, who gave me my slice and the balance to the debtor).

All the best and tread carefully.

[scotsman]

I wrote the following text in the last 24 hours after reading a thread about lease agreements.

Sorry about the grammar if it isn't perfect English and if I forgot to mention few things.

===========================================================================

Everything you wanted to know about

usufructs in Thailand.

By Sebastian H. Brousseau, LLB, B.Sc.

Attorney-at-Law (Quebec, Canada)

Managing director of Isaan Lawyers.

==========================

Isaan Lawyers has recently registered usufruct agreements in more than 15 provinces of Thailand. The following text is aimed to give you objective and accurate information about this right included in the Civil and Commercial Code of Thailand (hereafter CCCT). Don't hesitate to communicate with us by email should you have any questions or inquiries.

==========================

As you probably know, foreigners are forbidden to own land in Thailand by the Land Code. There are few rare exceptions to this rule (investment of 40 million baht, BOI approval, etc.). This is why many foreigners are looking into ways to secure a real estate investment or at least, give them the right to enjoy a property even if they are not the "full" owner. A usufruct agreement can give you this right: to possess and enjoy a property without being the full owner. And it is perfectly legal.

HISTORY

A usufruct is a real right (real means in civil law = attached to a thing) that originates from Roman law. In Roman law, the wife wasn't entering legally in the family of her husband. At the death of her husband, the wife had no rights of inheritance in the estate. To bypass this injustice, Roman law created the right of "usufruct". This usufruct was giving the widow the possibility to enjoy the asset of her husband after his death even if she wasn't an heir. The asset was normally devolved to the children at that time.

By essence, the right of usufruct is temporary and has roots in family relationships.

WHAT IS A USUFRUCT AGREEMENT

Usufruct contracts are governed by sections 1417 to 1428 of the CCCT. A usufruct is a right granted by the owner(s) of the land/house in favor of a usufructuary whereby this person has the right to possess, use and enjoy the benefits of an immovable property (section 1417 CCCT). The usufructuary has the right to manage the property (sect 1414 CCCT). It can be on a piece of land, on a house or on both of them.

The holder of a usufruct, known as "usufructury", has the right to use, possess and enjoy the property, as well as the right to receive profits from the fruits of the property. The usufructuary could be a person or an entity (ex: a company).

In civil law, property is divided in three parts. They are called in latin "usus" (use), "fructus" (fruits) and "abusus" (abuse). The word usufruct is normally unknown in Commonwealth countries. It combines the two first parts of the property in civil law, the usus (use, or possession) and fructus (fruits, or as we will see, more or less the "profits"). In French, it is called "usufruit" and in Thai "See-tee-kep-kin". It is interesting and useful to know that Thai Civil Law was largely inspired by French Civil law. (see "the work of codification in Siam" by Rene Guyon, 1919.)

The owner who gives the usufruct is called in French "nu-propriétaire" or by literal translation in English "naked-owner". It means that the owner has nothing else than the ownership: He can't use his possession, even if he is the owner. Beside possession and enjoyment of the property, the usufructurary has also the legal right to use and derive benefits from the property that belongs to another person, as long as the property is not damaged. "Fruits" should be understood as its natural (fruits, livestock, etc) and/or its legal definition (rent, etc.).

If you would like to use this right for industrial purposes, be aware that some taxes might be required.

Let's see some examples of usufruct agreements.

EXAMPLES

Imagine that you have a usufruct on a piece of land, an orchard. The apples (natural fruits) will be your asset and do not belong to the 'real" owner of the land. But in our days, fruits are more or less the legal fruits, like a rent from a lease. Section 148 of CCCT defines what can be the legal fruits in Thailand: "legal fruits denote a thing or interest obtained periodically by the owner from another person for the use of the thing; It is calculated and may be acquired day by day or according to a period of time fixed."

Now imagine that you have a Thai girlfriend. She buys the land and gives you a usufruct on this land for free. It means that you can enjoy this property, even ask her to leave the property, can sublease and get the money from the rents, and this, until the end of your life. It is NOT restricted to 30 years maximum. On top of that, if you decide to build on this land, it is possible for you be the full owner of the buildings and constructions. It is really a strong right.

THE END OF A USUFRUCT CONTRACT

In Thailand, a usufruct can be created for a limited time (5 years, 10 years, etc.) or the LIFE of the usufructuary. (sect. 1418 CCCT). If no time has been fixed, it is presumed that the usufruct is for the life of the usufructuary. In any case, the usufruct ends at the death of the usufructuary.

THE USUFRUCTUARY CAN LEASE THE LAND/HOUSE

A usufructuary has the right to enjoy, use and possess the land. He is acting like the real owner but can not sell or destroy the property as he is NOT the full owner. However, he can transfer his rights on the land/house to a third party. Even if the usufruct will end at the death of the usufructuary the usufructuary can lease out the land to a third party and this second agreement will NOT end when the usufructuary will die as per the Supreme Court ruling 2297/1998: "the lessor does not have to be the owner of the property".

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. Do not forget that all leases over 3 years must be registered at the land department and taxes have to be paid.

REGISTRATION

By a decision of the Supreme Court of Thailand, all usufruct agreements must be registered to be valid (Supreme Court decision 6872/2539). Once you register a usufruct at the land department where the title deed is located, your name will be registered (written in Thai) on the title deed. After this registration, the land/house can only be sold provided the buyer respects this usufruct. This is why it will be difficult for the owner to sell the land/house after a usufruct is register: nobody wants to buy a property where they can't live. Be aware land departments in Thailand have different rules and requirements. Some will ask to see your visa, some will ask for the father and mother's name of the usufructuary, etc.

You can also get a yellow book which is a House Registration Certificate (Thor. Ror 13) with a usufruct but many other documents will be required.

MYTHS AND FACTS ABOUT USUFRUCT AGREEMENTS

1) Usufruct can be done for maximum 1 rai

False. We registered usufruct agreements for more than 100 rai with one contract and multiple title deeds. Hovewer, the usufruct must be registered on EACH title deed separately.

2) Usufruct have never been tested by the Court

False, there are Court decisions IN THAILAND about usufructs (examples: Supreme Court of Thailand 2783/2516, 6872/2539, 2297/2541, 2380/2542, etc.). The land department has also published a small guideline about usufruct agreements.

Usufructs originate from Roman Law and they have been known in civil law countries for centuries. It has nothing to do with some old agricultural laws or customs. Remember that leases where mostly used in the 18^th and 19^th centuries by farmers as they were not rich enough to fully buy land.

3) Usufructs are NOT as safe as lease agreements:

False. There is no legal, historical or factual grounds for this affirmation. If a lease is safe in Thailand (section 537 and following), a usufruct is safe. Both of them are in the CCCT, just as a gift agreement (section 453 and following) or a loan contract (section 640 and following).

Unless the Thai law changes, foreigners are fully allowed to make usufruct agreements, just as they are allowed to purchase condominiums or to make a lease agreement. Some law firms prefer to register lease agreements as leases agreements are normally more expensive. If you can understand civil law, there is even some legal basis to say that a usufruct is stronger than a lease agreement.

4) You must pay taxes to register a usufruct agreement

True. If the usufruct agreement is done for an amount of money, taxes of about 1.5 % on the value of the contract will have to be paid. Some land departments don't like to register usufruct agreements for free as they see that their government is not making as much money as a lease agreement. On a lease agreement, you will also have to pay taxes on the value of the rents for the total agreement. Rents must be based on the assessed value of the property. Most of the time, it is cheaper to register a usufruct agreement than a lease agreement. If you register a usufruct agreement involving a company, the land department might ask for some value on the contract. They won't like to see it done for free. It is the discretion of the land officers to accept an agreement even if by law, it is clear and usufruct agreements for free CAN be done.

5) The owner can't borrow money or sell its property if a usufruct is registered

False. Even if you register a usufruct agreement on a title deed, the owner can sell his property to anyone. But in reality, nobody is interested to buy a property where they will have to maintain your right and won't be able to use this property until you die. This is why a usufruct is a good protection for you as it allows you to live there for the rest of your life, whatever happens. If you want this right to be passed to your heirs, it can also be done by a lease agreement might be a better option depending on your case.

6) It is possible to cancel or void a usufruct agreement

If you are NOT married to the owner granting you the usufruct, we believe it is not possible to cancel a usufruct and you are legally protected.

If you are legally married to the owner, Thai lawyers disagree on the application of article 1469 CCCT. This article mentions that all agreements made between spouses can be cancelled by the Court at the request of one party, unless agreements affect third parties. According to one interpretation, "publicity" or registration affect third parties and a usufruct can't be cancelled. According to the other interpretation, we have to search for the spirit of the law and it looks like Thai law wanted to end all relations between spouses in case of divorce, even usufruct agreements. A way to avoid the application of 1469 CCCT would be to have a second agreement (like a lease) affecting a third party before the Court could cancel your usufruct agreement.

7) I will be fully protected with a usufruct

False. Imagine that you bought a big house in a small village near the family of your girlfriend. Now, imagine that things go wrong with her and you decide to expulse her from this house. You have the legal right to do it. But do you really think your life will be nice and quiet near her family, in a big house, in the middle of nowhere? Usufruct will legally protect you but there are situations where even a legal protection won't have any authority in face of the reality.

8) Usufruct agreements can be done anywhere in Thailand

False. Usufruct agreements must be registered and you can register a lease or a usufruct only on title deeds equals or superior to Nor Sor Sam. It means that usufruct can be registered for Chanotte or Nor Sor Sam, but can NOT be registered in some rural areas without proper title deeds.

9) A usufruct agreement is a simple form.

False. It is a contract, like a loan or a lease. All contracts can be adapted or constructed around the situations of the parties. For example, some clients prefer limitations to their usufruct right for their own and personal use. However, others want to be able to transfer their rights without any prior notice or notifications (see section 1422 CCCT). Some usufructs are done for free, some for an amount of money. All clauses are possible if they are not against public order.

===========================

Usufruct agreements are a strong protection as they let you possess, use and manage a property in Thailand. We believe they will give you some piece of mind while you enjoy all the other aspects of Thailand. They can be a very good alternative to lease agreements, as they can be for your lifetime, with lesser taxes. Don't hesitate to consult a lawyer if you want to know your best options according to your needs and your personal situation.

===========================

DISPOSITIONS OF THE CIVIL AND COMMERCIAL

CODE OF THAILAND

TITLE VII: USUFRUCT

Section 1417

An immovable property may be subjected to a usufruct by virtue of which the usufructuary is entitled to the possession, use and enjoyment of the property.

He has the right of management of the property.

The usufruct of a forest, mine or quarry entitles the usufructuary to the exploitation of the forest, mine or quary.

Section 1418

A usufruct may be created either for a period of time or for the life of the usufructary.

If no time has been fixed, it is presumed that the usufruct is for the life of the usfructuary.

If it is created for a period of time, the provisions of Section 1403 paragraph 3 shall apply mutatis mutandis.

In any case the usufuct comes to an end on the death of the usufructuary.

Section 1419

If property is destroyed without compensation being paid, the owner is not bound to restore it; but, if he does so to any extent, the usufruct revives to that extent.

If any compensation is paid, the owner or the usufructary must restore the property so far as it is possible to do so, having regard to the amount of the compensation received, and the usufruct revives to that extent; but, if restoration is impossible, the usufruct comes to an end and the compensation must be divided between the owner and the usufructary in proportion to the damages suffered by the respectively.

The same rules apply mutatis mutandis in the case of expropriation as well as in the case of partial destruction of the property or of partial impossibility to restore the property.

Section 1420

When the usufruct comes to an end, the usufructuary must return the property to the owner.

The usufructuary is liable for the destruction or depreciation in value of the property, unless he proves that the damage was not the cause of his own fault.

He must replace anything which he has wrongfully consumed.

He is not bound to give compensation for depreciation in value caused by reasonable use.

Section 1421

The usufructary must, in the exercise of his rights, take as much care of the property as a person of ordinary prudence would take of his own property.

Section 1422

Unless otherwise provided in the act creating the usufruct, the usufructary may transfer the exercise of his right to a third person. In such case, the owner of the property may sue the transferee directly.

Section 1423

The owner may object to any unlawful or unreasonable use of the property.

If the owner proves that his rights are in peril, he may demand security from the usufructary; except in the case of a donor who has reserved to himself the usufruct of the property given.

If the usufructary fails to give security within a reasonable time fixed for the purpose, or if, in spite of the owner's objection, he continues to make use of the property unlawfully or unreasonably, the Court may appoint a Receiver to manage the property in his stead. Upon security being given, the Court may release the Receiver so appointed.

Section 1424

The usufructary is bound to keep the substance of the property unaltered, and is responsible for ordinary maintenance and petty repairs.

If important repairs or measures are necessary for the preservation of the property, the usufructuary must forthwith inform the owner thereof and permit them to be carried out. In case of default by the owner, the usufructuary may have the work carried out at the owner's expense.

Section 1425

All extraordinary expenses must be borne by the owner, but in order to meet these or expenses coming under the foregoing section he may realize part of the property unless the usufructuary is willing to advance the necessary funds without charging interest.

Section 1426

The usufructary shall, for the duration of the usufruct, bear expenses for the management of the property, pay taxes and duties, and be responsible for interest payable on debts charged upon it.

Section 1427

If required by the owner, the usufructuary is bound to insure the property against loss for the benefit of the owner; and if the property is already insured, he is bound to renew such insurance when due.

He must pay the premiums of the insurance for the duration of his usufruct.

Section 1428

No action by the owner against the usufructuary or his transferee in connection with the usufruct or vice versa may be entered later than 1 year after the usufruct comes to an end; but in any action by the owner who could not have known of the end of the usufruct, the prescription of 1 year shall run from the time when he knew or ought to have know of it.

I would have a long read of this I am sure you will find your answer in there, but I would have a good lawyer who speaks English help you in this setup.

Regards

Scotsman

[thaiwanderer]

My previous comments apply and i am no defender of usufructs but usufructs are recognised by Thai law - sections 1417-1428 civil and commercial code - and are registerable with the land office in the same way as leases are (although as i said there are important differences).

Your uncritical reference to renewals and inheritance in relation to leases ignores the important distinction between lease and personal rights. If lease renewals were unproblematic the one advantage usufructs can have ('for life') would be negated.

It is entirely unremarkable to include provision for sub-letting in leases.

Nonetheless generally leases are typically more useful than usufructs to farangs, depending of course on their circumstances.

For the OP I would seriously consider pros / cons of usufruct and leases for your circumstances.

(EDIT - this was in response to maizefarmer)

Edited June 22, 2009 by thaiwanderer

[thaiwanderer]

On further reflection the advatage of a usufruct for life is its disadvatage also - the usufructuary's death becomes more valuable.

[Maizefarmer]

My previous comments apply and i am no defender of usufructs but usufructs are recognised by Thai law - sections 1417-1428 civil and commercial code - and are registerable with the land office in the same way as leases are (although as i said there are important differences).

Your uncritical reference to renewals and inheritance in relation to leases ignores the important distinction between lease and personal rights. If lease renewals were unproblematic the one advantage usufructs can have ('for life') would be negated.

It is entirely unremarkable to include provision for sub-letting in leases.

Nonetheless generally leases are typically more useful than usufructs to farangs, depending of course on their circumstances.

For the OP I would seriously consider pros / cons of usufruct and leases for your circumstances.

(EDIT - this was in response to maizefarmer)

Fair points - however, please note I did not say usufructs were not recognisable in Thailand - but that they were not something I was familiar with, and certainly not in the context, or against the background the OP was putting forward.

Scotsman clears that point up, still, against the background of the OP's relationship with the owners, I wonder if its the best long term solution for him (on the other hand, it may be the ideal solution for him).

Regards your observation with respect to long leases (if they were not unproblematic): they are indeed not without problems, and quite frankly I would go so far as to say that they are no solution etheir (re: Scotsmans' points 6) and 7)[/i] ) - one is still going to have much the same problems to deal with. Many of the problems that do arise with long leases (excluding those stem from the status of relationships), often come down to a faliure to see that all the options are accomodated for right from the start e.g. renewal, status of buildings on the land, planning status of land and land alongside, access/service rights ect ect ..... Its practical points like these that often lead to problems down the road with respect to long leases.

My comments were not so much about usufructs as they were about Long leases - and in that respect, long leases are recognised and used a lot in the ex-pat community. Usufructs by comparison - would be interesting if some we could find out somhow just how many ex-pats are living in Thailand on land that has been usufructed to them (?) - certainly aren't common (I dont know any ex-pats with a usufruct) - is this because there is some or other problem we havn't touched on yet, or is it because they are a little known option?

More important than all the above, I guess my point really is (and I am speaking for myself here) I would feel a lot more happy and comfortable if my land/home and sense of well been & security was not all practically tied up together - irrespective of whether my access to and use of that land is through usufruct or a long lease - the issue is keeping the relationship side of things out of such an agreement, and the role or influence the personal relationship has or plays in such agreements.

[scotsman]

I would say that if you wanted a usufruct on the land to safe guard your investment then its not a very good way to do it, as it would be very difficult to sell any property with a usufruct on the land Title and if it was for life then as Thaiwanderer has pointed out your death would end the Usufruct. But you could still lease it for 30 years to someone of your choosing along with the usufruct. The reason most people get a usufruct on the land is to protect you against the family in the case of the death of your wife. I know that if you have a will you can inherit the land from your wife and you have 1 year to sell it or put in another Thai persons name but know one can get you out of your house as the Usufruct is still in force.

Regards

Scotsman

[surayu]

....but know one can get you out of your house as the Usufruct is still in force.

how can someone kick me out of a property if there is an "usufruct" in place? the land in question is not under my wife's name nor it will be in the future to come

[ThaiLawOnline]

I will answer you quickly (no time to read all the answers but I saw someone put a text I wrote quickly last year)

Your document is a Chanotte. Check here: http://www.thailawonline.com/en/thailand/t...eds-in-thailand

But all the information on it has been erased, probably for confidentiality.

1) How can i make sure is registered for "life" and not just 30 years?

It's written on the title deed. On the back. There is a kind of chain of possession. The owner, on that day X, will grant you usufruct for X time, on X area.

2) Do i have to keep this little piece of document or a new one(the yellow book?) will be produced by the Land Office just in my name? and will the relative been holding any sort of documents at all? (maybe this one)

This piece of document is the title deed. It will be recorded on it that you have a usufruct. Another document (white paper) should be attached. It's basically the conditions (very limited) of the agreement that you have. It will be better to make a REAL agreement because the standard conditions of the land department can be upgraded. But not all of them are registered, it becomes a personal agreement between you and your wife, enforcable in Court.

3) If i build anything on it will i be able to rent/sell it as i wish, without any required necessary action by the owner of the land (my wifes relatives) ?

If depends on the conditions of the usufuct. If there is nothing, YES you can RENT. If there is an interdiction, NO, you can NOT. Normally the owner will have to agree, depending on what you want to do and documents signed. Remember with a usufruct: YOU ARE NEVER THE OWNER OF THE LAND.

Now, be very careful to the words you use. A relative can NOT GIVE YOU LAND. Foreigners can NOT own land in Thailand (rare exceptions).

I would register the usufruct first, then transfer on your wife's name, then build. You also stated: I"M MARRIED: That means you have common property with your wife. If you build a house on that land, AT LEAST, she will be entitled to half of it, unless some exceptions. Also, if the land is not separated from the house, it becomes attached to the land. It can be very difficult to detach legally a house from it's land. That's why you should transfer the land on your wife's name....

Never build a property on land of a relative. Quite dangerous. (personal opinion and in some cases, it can be fine. Everyone is different).

S.

[scotsman]

....but know one can get you out of your house as the Usufruct is still in force.

how can someone kick me out of a property if there is an "usufruct" in place? the land in question is not under my wife's name nor it will be in the future to come

Well that's what i was saying, if the land owner should sell or die your usufruct is still in force so no one can force you out of your house like another owner of the land.

Regards

Scotsman

Edited June 23, 2009 by scotsman

[samILO]

why take the usufruct and not the 'Superficies' Agreement for life time and having the right to pass on to your hires and sell the rights ?

[surayu]

why take the usufruct and not the 'Superficies' Agreement for life time and having the right to pass on to your hires and sell the rights ?

Hi SamILO, it seems that a "Superficies Agreement" will end if the owners of the land dies, so definetely not my choice, also it seems that with the right worded usufruct you can rent/sell too or at least that's what i understood till now, let me know if i am wrong, thank you

[thaiwanderer]

why take the usufruct and not the 'Superficies' Agreement for life time and having the right to pass on to your hires and sell the rights ?

Hi SamILO, it seems that a "Superficies Agreement" will end if the owners of the land dies, so definetely not my choice, also it seems that with the right worded usufruct you can rent/sell too or at least that's what i understood till now, let me know if i am wrong, thank you

Wait on SamILO but iirc a superficies remains in force if the landowner dies or transfers the land to another.

However the landowner's co-operation is required to transfer the right of superficies.

Anyway, typically would you want a superficies without also having a lease or usufruct?

Fantsay legal:

How about Thai company route for owning the land, lease to offshore company, superficies to offshore company/individual farang and usufruct for offshore company/ individual farang (maybe chuck in a mortgage for good measure)? Or just comply with the (spirit of the )law

Edited June 24, 2009 by thaiwanderer

[surayu]

This quote is extracted from a post made by IsaanLawyers: "superficies agreements die in Thailand with the life of the owner (section 1412)"

and you can find it here: http://www.thaivisa.com/forum/Legal-Docume...us-t174469.html

more precisely the post number #25 on the line 42 ...just to make it easyer

[thaiwanderer]

why take the usufruct and not the 'Superficies' Agreement for life time and having the right to pass on to your hires and sell the rights ?

Hi SamILO, it seems that a "Superficies Agreement" will end if the owners of the land dies, so definetely not my choice, also it seems that with the right worded usufruct you can rent/sell too or at least that's what i understood till now, let me know if i am wrong, thank you

Wait on SamILO but iirc a superficies remains in force if the landowner dies or transfers the land to another.

However the landowner's co-operation is required to transfer the right of superficies.

Anyway, typically would you want a superficies without also having a lease or usufruct?

Fantsay legal:

How about Thai company route for owning the land, lease to offshore company, superficies to offshore company/individual farang and usufruct for offshore company/ individual farang (maybe chuck in a mortgage for good measure)? Or just comply with the (spirit of the )law

My sincere apologies what i should have said if i was not so fallible was:

'Wait on SamILO but iirc a superficies may remain in force if the landowner dies or transfers the land to another.' perhaps adding-........depending on the term that is specified (i.e. for 30 years or for the life of the superficiary).

Is that better?

Your suggestion / regurgitation that "superficies agreements die in Thailand with the life of the owner (section 1412)" is IMHO incorrect.

AFAIK section 1412 allows for superficies to be granted for a specified time (maximum 30 years), for the life of the land owner or the life of the superficiary.

Of course I may be talking out of my hat.

[surayu]

Your suggestion / regurgitation that "superficies agreements die in Thailand with the life of the owner (section 1412)" is IMHO incorrect.

AFAIK section 1412 allows for superficies to be granted for a specified time (maximum 30 years), for the life of the land owner or the life of the superficiary.

Of course I may be talking out of my hat.

Yes it seems that it can be made for the life of the "superficiary" too, i guess only IsaanLawyers can explain to us what it meant with that statement, maybe there is something we are not aware of, don't know

[thaiwanderer]

Yes, await their post here and also on the 60 year lease thread where they appear to suggest a letter of intention binds heirs?

[ThaiLawOnline]

I already answered the 3 questions here... anyway.

About the previous post on "what proves the ownership of a house", it's not an easy question. I had big arguments with other respected members here, and many posts were deleted. I would write it differently today to be clearer.

For superficies, you should check the civil code. It's also a REAL RIGHT, different from usufruct. You can find plenty of information about superficies on Internet. I will try to write something about it in the next weeks, when I have time, I normally add it on thailawonline.com.

If I wrote "I would not build on a relative's land", it's because I saw many cases where the foreigner lost everything. But with some proper contracts, yes, it could be done. And it could be "safe" as a lease is "safe" or a "usufruct" or "superficies". Many people built on relative's land, then divorced, and have NO PROOF that the house belongs to them, obviously the land doesn't, and the part of the marital property (Sin Somros) is normally mostly in the house. It's even a trick of some "working" girls. They build on mama's land, so the foreigner normally can't do anything against his girlfriend, who lied to him (like, it's my land!). Sorry, I just answered quickly and didn't explain everything.

Remember that each situation is COMPLETELY DIFFERENT. For some, a lease is better. For others, usufruct. For others, maybe superficies. Some can be combined: Example LEASE + SUPERFICIES. You lease the land and the owner of the land grants superficies. Quite efficient. Add a Will on that and I would say it's a very good protection.

For the lease, the letter of intention refers to section 168 of the Thai Civil Code.

Basically, it's legal to make a lease of 30 years, and legal to make a renewal. Right?

It's also legal for the parties to write down their intentions to renew the lease under the same conditions.

Under 168, the effect of this document is retroactive, so it will be enforcible if the heirs (for example) do not want to register the renewal. You can write down your intentions to renew it BEFORE the renewal.

Of course, you must put some clauses for inheritance in the lease. Clause to bind the heirs, etc.

[thaiwanderer]

For the lease, the letter of intention refers to section 168 of the Thai Civil Code.

Basically, it's legal to make a lease of 30 years, and legal to make a renewal. Right?

It's also legal for the parties to write down their intentions to renew the lease under the same conditions.

Under 168, the effect of this document is retroactive, so it will be enforcible if the heirs (for example) do not want to register the renewal. You can write down your intentions to renew it BEFORE the renewal.

Of course, you must put some clauses for inheritance in the lease. Clause to bind the heirs, etc.

Thank you for that. Of course the gap between law and reality can often be wide, similarly the gap between having a legal right to something and it being sensible to enforce it (house on land of ex-wife up country etc.).

When you have a moment I would welcome if at all possible your clarification on section 1412 as to whether it allows for a choice as to the term: specified time (maximum 30 years), life of the land owner or life of the superficiary.

Your comments on declaration of intention (section 168) are very interesting to my amateur mind. I have of course seen wordy clauses stating the Lessor shall ensure their will and any sale contracts for the land bind the heirs and transferees particularly in relation to renewals. However I note you refer to heirs but not other transferees of the freehold. Do you draw a distinction here as to who is bound and if so why? (maybe other transferees are at arms length and buy in good faith and heirs inherit what is the deceased's to give??)

In practical terms I never considered such clauses to carry much weight.

Maybe I was wrong (I am every day!)

Firstly (although I am not at all sure about this bit) even if the same lessor remains alive it is a declaration of intention for the future and circumstances can of course change. My understanding was that unless the rent for the renewal period has been paid already (and even then?) there is effectively no (substantial) loss giving rise to the court finding that the lease shall be renewed. In addition to rent in advance the lessee may also build a house or whatever on reliance of a longer lease so perhaps additional loss to factor in there. This may be too vague but I hope you get my meaning. Essentially if the same person is alive and remains the lessor, is the mere declaration of intention (of course clearly indicated by contract) to do something in the future sufficient to bind them (without anything else such as advance rent or whatever)?

On perhaps a more on topic point - heirs - is not a will a (last) declaration of intention and therefore regardless of previous declarations to a lessee unless the will specifies they are left the land on condition they renew are they bound (in my example above where there is no advance rent and it is merely a declaration of intention included in the contract with the lessee)?

Of course if you do draw a distiction between heirs (bound by the declaration) and other transferees (not bound by the declaration) the renewal would easily be defeated by lessor or their heirs transferring to another before the renewal was due (which was my perhaps confused understanding before today in relation to anyone other than the lessor being the land owner at renewal time).

(Would a declaration for perpetual renewals to a farang where the freehold remains in the family forever be void for offending 'good morals' and/or effectively giving the farang land?)

On a seperate point the clauses I have seen often refer to an option (for the lessee) to renew and are worded in such a way that the lessor shall (maybe 'declares an intention' (?) now to...)offer to renew shortly before the end of the current term and if the lessee accepts then they shall renew.

I wonder if a renewal 'promise' is in fact a declaration of intention (albeit current intention to do something in the future, as of course the act can't be done for another 30 years) which is binding now? Or is it a declaration of intention to make an offer (contract) for renewal in 30 years which the lessee can choose to accept then?

Section 169/2 states that the death of the person who made the declaration does not affect the validity of the declaration BUT section 360 (in the 'contracts' section) states that 169/2 does not apply if the offeror declares a contrary intention or if before the offeree accepts the offeror dies.

I hope my vague and amateur (and coffee driven) thoughts on the issue make sense but as I am sure you can tell I am a little confused as to the exact status of the 'promise' to renew - declaration thats immediately binding (if so why only binding on heirs?), current declaration to do something in the future which is not binding even on the lessor (unless rent paid in advance or whatever), or a current offer or declaration of intention to offer renewal in 30 years time that is not capable of acceptance until then?

Any comments to point me in the right direction on this would be gratefully received.

We could of course accept that anything after 30 years for farang is a coin toss but where would the fun be in that?????

Edited June 24, 2009 by thaiwanderer

[samILO]

I agree with Isaan Lawyers on the points (specially the problem of what constitutes ownership of building) and

QUOTE:

Remember that each situation is COMPLETELY DIFFERENT. For some, a lease is better. For others, usufruct. For others, maybe superficies. Some can be combined: Example LEASE + SUPERFICIES. You lease the land and the owner of the land grants superficies. Quite efficient. Add a Will on that and I would say it's a very good protection.

Superficies as of Civil and Commercial Code Section 1411 states. Unless otherwise provided int he act creating it, the right of superficies is transferable and transmissible by way of inheritance.