Usufructs - Another Twist?...comments, Please.

[seaeagle]

My lawyer has just stunned me with a legal interpretation of the Civil and Commercial Code this morning. I'm going to write this in bullet points so as to try and aid clear understand. Here goes......

• A usufruct follows the legal freehold title. If one is granted, it can't be taken away by any new freeholder.
  

• So, if a usufruct is granted by a previous freeholder, then the freehold title is transferred into a wife's name, she cannot renounce it in case of things turning sour in the marriage.
  

• Alternatively, if land is in the name of a wife, and the wife gives the husband a usufruct, this could be voided as per Section 1469 of the Thai Civil and Commercial Code : Any agreement concluded between husband and wife during marriage may be avoided by either of them at any time during marriage or within one year from the day of dissolution of marriage; providing that the right of third persons acting in good faith are not affected thereby.
  

• I've always taken this as the way it works.
  

• Now here's an interpretation by my lawyer. He says:
  

• Section 1469 of the C&CC is contained in Chapter IV, which is entitled "Property of Husband and Wife".
  

• Land in Thailand cannot be owned by a foreigner and, therefore, it could not be argued that the land was property belonging to both husband and wife.
  

• Consequently, if a usufruct was given by a wife to a husband on land that was only the property of the wife, and could never be the property of the husband, the usufruct could not be voided under S. 1469.
  

You know, there's logic in his argument. Anyway, can we throw this open for discussion, or some legal precedence?

[chiangmaibruce]

OK, here goes, a few thoughts from a non-lawyer ...

1. i know of no legal precedents regarding usufructs in thailand

2. most of the cases I have heard of (involving property) are in the context of a property settlement after divorce

3. it is my understanding that judges here will consider all pertinant issues before reaching a decision, i.e. they will consider the "foreigners can't own property" law AND the law in relation to property held in a marriage. In fact I have read (in a recent legal article) that judges tend to put more weight on the latter than the former. If there was a usufruct that would go into the mix too, ditto with prenuptial agreements etc etc. The decision would then be based on that particular judge's weighting of the various factors

4. a lawyer's interpretation of the law is just that, his/her interpretation, and not a home run in the making. As to how well he/she can convince the judge that it should also be THE interpretation of the law, well that comes down to the skill of the lawyer combined with the judge's assessment of the matters mentioned earlier

5. lawyers seem divided about how secure a usufruct alone is (in the context of a divorce settlement). some are very bullish, whilst others say you need secondary protections ... like lease agreements with third parties, etc

6. if it's certainty you want - the reason for getting the usufruct in the first place - another interpretation of the law is not going to deliver that for you. without some clear legal precedent then it's just more mud in the water

[seaeagle]

OK, here goes, a few thoughts from a non-lawyer ...

1. i know of no legal precedents regarding usufructs in thailand

2. most of the cases I have heard of (involving property) are in the context of a property settlement after divorce

3. it is my understanding that judges here will consider all pertinant issues before reaching a decision, i.e. they will consider the "foreigners can't own property" law AND the law in relation to property held in a marriage. In fact I have read (in a recent legal article) that judges tend to put more weight on the latter than the former. If there was a usufruct that would go into the mix too, ditto with prenuptial agreements etc etc. The decision would then be based on that particular judge's weighting of the various factors

4. a lawyer's interpretation of the law is just that, his/her interpretation, and not a home run in the making. As to how well he/she can convince the judge that it should also be THE interpretation of the law, well that comes down to the skill of the lawyer combined with the judge's assessment of the matters mentioned earlier

5. lawyers seem divided about how secure a usufruct alone is (in the context of a divorce settlement). some are very bullish, whilst others say you need secondary protections ... like lease agreements with third parties, etc

6. if it's certainty you want - the reason for getting the usufruct in the first place - another interpretation of the law is not going to deliver that for you. without some clear legal precedent then it's just more mud in the water

Thanks, chiangmaibruce. I think the fact that so many people have read my post, but you're the only one who's responded, may indicate that this has "thrown" a few people!

I remember years ago doing simple studies of Contract Law and Law of Tort back in England, but aware that much of this was untimately dictated by 'Case Law' in a court room.

For our lawyer members, it has crossed my mind if a recent case has influenced my lawyers interpretation. Any information? Or any further feedback on my original posting?

[TongueThaied]

OK, here goes, a few thoughts from a non-lawyer ...

4. a lawyer's interpretation of the law is just that, his/her interpretation, and not a home run in the making. As to how well he/she can convince the judge that it should also be THE interpretation of the law, well that comes down to the skill of the lawyer combined with the judge's assessment of the matters mentioned earlier

I am a recovering lawyer, but know little about Thai law, so my advice and 99 baht will get you a cup of sweet brown coffee. However, what Bruce said above is absolutely true. Lawyers almost always have an opinion. Many are cocksure about their opinions. If the lawyer is ultimately wrong, not a bad thing -- for the lawyer -- because you will pay him a bundle in the litigation that ensues over his mistake. YOU will pay, not him. If you have not seen this link, take a look: http://www.thaivisa.com/forum/Wanted-Usufr...Th-t171307.html

Sebastian H. Brousseau, LLB, B.Sc., a lawyer who apparently does know about Thai law points out that the question you raise is UNDECIDED in Thailand; lawyers are currently debating the question (at great expense to somebody), but the question will remain undecided until it is finally decided by the highest court. Thus, getting the usufruct from the owner previous to the wife is the much safer route. Or, as suggested by Mr. Brousseau, do something to avoid the application of 1469 CCCT such as making a second agreement (like a lease) affecting a third party before the Court could cancel your usufruct agreement.

[loverboy44]

Well, i am not a lawyer too but lets go back to what i understand is a usufruct.

IMO a usufruct gives you the right to use the land either a lifetime or a limited time if both parties agree on it.

So, as far as i know, it can not be affected by selling the land nor in case of divorce.

The usufruct will end with the death of the user the latest.

It must be registered at the land office so i think that you can register either a usufruct or a leasehold but not both.

Not sure if i am right.

[thaiwanderer]

but the question will remain undecided until it is finally decided by the highest court.

and even then remain undecided, unfortunately?

[stgrhe]

IMO a usufruct gives you the right to use the land either a lifetime or a limited time if both parties agree on it.

No, either lifetime or MAXIMIM 30 years.

So, as far as i know, it can not be affected by selling the land nor in case of divorce.

The case of divorce it is dependent on whether the usufruct was signed and registered before or after marriage in the case where the freeholder is a spouse. Read the other postings above with regards to section 1469 of the Commercial and Civil Code of Thailand.

The usufruct will end with the death of the user the latest.

It depends on the wording of the usufruct agreement and whether the usufruct was signed for life or for a limited time. If for life it expires upon the passing of the usfructuary.

It must be registered at the land office so i think that you can register either a usufruct or a leasehold but not both.

You can register both a usufruct as well as a leasehold.

[quiksilva]

The only thing I have to add to that is with respect to cases where the Thai spouse has purchased the property since becoming married.

In these cases very often the land department will require the foreigner to waive all rights to the property, so that it is not considered common property [sin Som Rot] in the eyes of the law (i.e. if you get divorced she gets the lot), apologies if Thai terminology is a little off. (young baby in the house = little sleep)

With that lawyer's interpretation (which I have also heard elsewhere) an usufruct would seem to carry little weight.

Edited August 19, 2009 by quiksilva

[thaihome]

Issan Lawyer did a thread about usufructs a few months ago. From what I remember his conclusion is that it does not protect you very well from your wife in case of a divorce, but it is the best way to make sure her hiers cannot throw you out and you get to stay in the house in case of her death.

TH

Edited August 19, 2009 by thaihome

[loverboy44]

Thanks for that Stgrhe. Makes things pretty clear.

One question though: Why does it makes scence to register a usufruct and a leasehold?

[mixed]

Issan Lawyer did a thread about usufructs a few months ago. From what I remember his conclusion is that it does not protect you very well from your wife in case of a divorce,

If the usufruct was void in the case of divorce, would the judge then consider you were entitled to 50% of the property? I realize you cannot own the land, but farang have been able to force land sales.

[stgrhe]

Thanks for that Stgrhe. Makes things pretty clear.

One question though: Why does it makes scence to register a usufruct and a leasehold?

Because if this paragraph of the law:

Section 1469 of the Thailand Civil and Commercial Code

Any agreement concluded between husband and wife during marriage may be avoided by either of them at any time during marriage or within one year from the day of dissolution of marriage; provided that the right of third persons acting in good faith is not affected thereby.

By leasing the land, which you can do as a usufructuary, to e.g. a son of yours, this paragraph would have no meaning in the event of a divorce.

[thaihome]

Issan Lawyer did a thread about usufructs a few months ago. From what I remember his conclusion is that it does not protect you very well from your wife in case of a divorce,

If the usufruct was void in the case of divorce, would the judge then consider you were entitled to 50% of the property? I realize you cannot own the land, but farang have been able to force land sales.

No, because you should have a signed a document when she registered the land/condo in her name that said the property was not matrimonial property.

TH

[chiangmaibruce]

Issan Lawyer did a thread about usufructs a few months ago. From what I remember his conclusion is that it does not protect you very well from your wife in case of a divorce,

If the usufruct was void in the case of divorce, would the judge then consider you were entitled to 50% of the property? I realize you cannot own the land, but farang have been able to force land sales.

No, because you should have a signed a document when she registered the land/condo in her name that said the property was not matrimonial property.

TH

I have read of instances where Thai judges have reverted to the provisions of the marital property laws in splitting property/assets - despite the farang 'can't own property' rule - but I think this has been limited to cases where the statement <as mentioned by Thaihome> wasn't signed/submitted. This sometimes happens when, for e.g., the Thai spouse hassn't changed her name and doesn't disclose that she is married to a farang ... hence not asked to provide signed statement.