Usufruct’

[chiangrai57020]

I do not want to keep beating a dead horse, BUT:

In reading the following ‘CIVIL AND COMMERCIAL CODE OF THAILAND’ there is nothing that specifically states that a ‘foreigner’ cannot be a ‘usufructuary’???

The ‘Code’ also states that the ‘usufruct’ is for life, UNLESS a specific time-frame is specified!

So, if I read and understand this ‘Code’ correctly, a ‘foreigner’ can be recorded on the ‘Land’ document as a usufructuary. If this be the case, it is a heck-of-a-lot better than a Lease? If a person can only get a 30 year lease and ‘hope’ that it can be renewed, it appears that there is no question as to which is the best - the ‘usufruct’ or the ‘Lease’??

And as a matter of fact, I have a copy of a ‘Chanote Ti Din’ that does contain a ‘usufruct’ in the name of a ‘foreigner’! I would like to post the Chanote Ti Din but cannot as I would have to obtain permission from the individual whose name is on the Chanote Ti Din. But, since I do not have his address or e-mail address it impossible for me to obtain permission.

However, if you want to search through the TV postings you will find the person that has the usufruct and will be happy to PM a copy (or e-mail a copy).

Now, I realize there are some ‘lawyers’ that are members of TV that could probably explain why many postings state that ‘WE’ are not entitled to a usufruct and that a ‘Lease’ is the only protection we have?

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 maintenace 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.

[chiangrai57020]

I do not want to keep beating a dead horse, BUT:

The ‘Code’ also states that the ‘usufruct’ is for life, UNLESS a specific time-frame is specified!

So, if I read and understand this ‘Code’ correctly, a ‘foreigner’ can be recorded on the ‘Land’ document as a usufructuary.  If this be the case, it is a heck-of-a-lot better than a Lease?  If a person can only get a 30 year lease and ‘hope’ that it can be renewed, it appears that there is no question as to which is the best - the ‘usufruct’ or the ‘Lease’??

And as a matter of fact, I have a copy of a ‘Chanote Ti Din’ that does contain a ‘usufruct’ in the name of a ‘foreigner’!  I would like to post the Chanote Ti Din but cannot as I would have to obtain permission from the individual whose name is on the Chanote Ti Din.  But, since I do not have his address or e-mail address it impossible for me to obtain permission.

However, if you want to search through the TV postings you will find the person that has the usufruct and will be happy to PM a copy (or e-mail a copy).

Now, I realize there are some ‘lawyers’ that are members of TV that could probably explain why many postings state that ‘WE’ are not entitled to a usufruct and that a ‘Lease’ is the only protection we have?

OK! I convinced myself. Below is a copy of Chanote Ti Din with the Usufruct. I blank the last part of the name but you can see the the 'first' name is farang.

Edited October 24, 2005 by chiangrai57020

[stevehaigh]

if you seach back about 3 months you will find a posting from a farang who i believe used the sit-thi-gap-gin-talort-chi-vit to secure a lifetime lease on his property. i'm going to show this chanote to my lawyer and get back to you.

steve

[monty]

Very simple rule in Thailand.

The Thai law applies equal to Thais and non-Thais, unless specifically noted otherwise!!!

So yes, the usufruct is available to foreigners. However the main hurdle will be to convince the Ghom ti din officers

[beammeup]

Very simple rule in Thailand.

The Thai law applies equal to Thais and non-Thais, unless specifically noted otherwise!!!

So yes, the usufruct is available to foreigners. However the main hurdle will be to convince the Ghom ti din officers 

<{POST_SNAPBACK}>

If I understand this correctly, if I take out a lease we need to pay property tax as well as tax on the estimated rent value of the property, but if we go the usufruct way we only have to pay property tax?

[stevehaigh]

i checked with my lawyer who had not heard of it but did look it up in the civil and commercial code book and told me what i already know. she did not see any reason why a farang coud not use this.

the main advantage of the usufruct vs. lease is it is for the life of the holder, not limited to 30 years. also I think there is only a 75 bhat fee to pay, nothing else! the disadvantage is that you cannot will or sublease it so what ever invenstment you make in the property proably dies with you. you could will or sell the house i guess but on someone elses land! what's it worth!

it will be interesting to get some posts from farangs who are currently using this method, it cirtainly seems to have advantages over a lease if you plan to live longer than 30 years and are happy to leave everything to your Thai partner/kids when you die.

steve

[Mumbo Jumbo]

HI intresting subject , does any one know a web site that shows the ...

CIVIL AND COMMERCIAL CODE OF THAILAND TITLE VII: USUFRUCT, in Thai, as I would like to show the wife !!!,

...Thanks ....... Mumbo

[Sumitr Man]

Not that I'm overly worried, but that first post looks suspiously like a post of mine with the explanation notes taken out

[Mumbo Jumbo]

Can No one help...? I would just love to show her indoors,

HI intresting subject , does any one know a web site that shows the ...

CIVIL AND COMMERCIAL CODE OF THAILAND TITLE VII: USUFRUCT, in Thai, as I would like to show the wife !!!,

Thanks Again fingers crossed ....... Mumbo

[Dragonman]

i checked with my lawyer who had not heard of it but did look it up in the civil and commercial code book and told me what i already know. she did not see any reason why a farang coud not use this.

the main advantage of the usufruct vs. lease is it is for the life of the holder, not limited to 30 years. also I think there is only a 75 bhat fee to pay, nothing else! the disadvantage is that you cannot will or sublease it so what ever invenstment you make in the property proably dies with you. you could will or sell the house i guess but on someone elses land! what's it worth!

it will be interesting to get some posts from farangs who are currently using this method, it cirtainly seems to have advantages over a lease if you plan to live longer than 30 years and are happy to leave everything to your Thai partner/kids when you die.

steve

<{POST_SNAPBACK}>

You have got it in a nutshell! Lots of lawyers in Thailand have not heard of usufruct as it was formerly used in Thailand for as the name suggests, "fruit" plantations. Not farang homes! I have previously waxed lyrical about the possible pitfalls of its use by foreigners. Just note that it is primarily a device for getting around property laws in Thailand. "Immovable Property" has different legal interpretations in various States in the US, Thai judges will have a field day when usufruct objections appear in thai courts. But then it's better than nothing if it puts people's minds at rest, at least until problems occur

Don't forget lawyer's opinions of interpretations of the thai civil code are just that,opinions. Find one who has dealt successfully with a usufruct objection. Few and far between I would think

[Mumbo Jumbo]

Is there no one who can tell Mumbo...?

HI intresting subject , does any one know a web site that shows the ...

CIVIL AND COMMERCIAL CODE OF THAILAND TITLE VII: USUFRUCT, in Thai, as I would like to show the wife !!!,

...Thanks ....... Mumbo

[dr_Pat_Pong]

Not that I'm overly worried, but that first post looks suspiously like a post of mine with the explanation notes taken out 

<{POST_SNAPBACK}>

Cheats never prosper

[Cabana]

my lawyer prepared all the docs went to tessabhan to get my usufruct registered the top man said 'no can do' because he said it must be done at the time of the purchase not down the track.

[Dragonman]

my lawyer prepared all the docs went to tessabhan to get my usufruct registered the top man said 'no can do' because he said it must be done at the time of the purchase not down the track.

<{POST_SNAPBACK}>

As is normal in Thailand, the "top man" doesn't know his posterior from his humerus Didn't your lawyer query his "expert" knowledge on usufructs? Like the simple question how did the Thai Government provide 1000's of usufructory interests to farmers over the centuries if it can only be done at time of purchase? Don't worry about it though, usufructs are one of my pet dislikes and you're just as well off with a lease. Don't tell me he said you couldn't register a lease either

[Hans Lankari]

After discussing with my lawyer (a thai) about "usufruct" the major disanvantage of this method of holding land is that:

"once you invested to that land and arranged it you are "married" with that arrangement for the rest of your life; no chance to sell it etc. So you must be pretty sure that you want to keep that piece of land 'till you die."

Company holding is more expensive but you are very free and able to change the land into cash fairly quickly if changes in your life occur.

(My situation is that I am in my early 30s so I'd think three times at least before involving myself with such an arrangement. Or at least I'd keep in mind that all investments put into that piece of land are easily a goodbye. Meaning that I cannot be sure if I'll still be here in a year's time.)

[Mumbo Jumbo]

Is there no one who can tell Mumbo...?

HI intresting subject , does any one know a web site that shows the ...

CIVIL AND COMMERCIAL CODE OF THAILAND TITLE VII: USUFRUCT, in Thai, as I would like to show the wife !!!,

...Thanks ....... Mumbo

[Dragonman]

Is there no one who can tell Mumbo...?

HI intresting subject , does any one know a web site that shows the ...

CIVIL AND COMMERCIAL CODE OF THAILAND TITLE VII: USUFRUCT, in Thai, as I would like to show the wife !!!,

...Thanks ....... Mumbo

<{POST_SNAPBACK}>

Sorry can't help Mumbo, Sumitr Man may have knowledge of such a site, or be able to copy the section in Thai.

The Civil Code is purposely drafted in general terms in order to allow for changes and different interpretations by judges. Don't put 100% store in it. There are anomalies which even confuse people with going on 30 years experience in law, such as myself.

Hans. I think your lawyer has been confused by one of the anomalies! As in most countries, or States, which accept the concept of usufruct, I can find no reason why the usufruct cannot be sold, or transferred. However the Thai Government, who tended to be the only major player in the usufruct league up until farangs jumped on the bandwagon, issued non transferable usufructs to farmers mainly since the 1950's. It is really up to the parties involved what terms they include, but some may be thrown out in Court at a later date.

You may be right regarding Company ownership being best for you, but don't forget that a Government statement reported in the press in 2001 said they would be clamping down on such companies in the future. But as in most things over here the future hasn't yet arrived

[Cabana]

As is normal in Thailand, the "top man" doesn't know his posterior from his humerus Didn't your lawyer query his "expert" knowledge on usufructs? Like the simple question how did the Thai Government provide 1000's of usufructory interests to farmers over the centuries if it can only be done at time of purchase? Don't worry about it though, usufructs are one of my pet dislikes and you're just as well off with a lease. Don't tell me he said you couldn't register a lease either

<{POST_SNAPBACK}>

I got the impression it would be a hard long battle and with my lawyer in Bangkok and expensive to get him down I felt the 'top man' was enjoying himself too much and i didnt want to indulge him further. If I didnt have an interest in the land when it was bought (and that was declared so) how come i now wanted rights attached to that land land). Just too messy. Solution - sell the house and land to a company. Put it down to experience or get better legal advice at the outset. Trade the company and get it set up properly so that any question marks are easily defeated. As the property market gets tighter cant see any clampdown any time soon.

Edited December 4, 2005 by Cabana

[Thaipwriter]

I got the impression it would be a hard long battle and with my lawyer in Bangkok and expensive to get him down I felt the 'top man' was enjoying himself too much

Usufruct is not just dished out to farangs willy nilly, you cant just waltz into your local land office in your union jack shorts and expect the officer there to action this for you. I had to involve a heavyweight local developer and his legal team to negotiate this facilty so I could offer it to my customers.

[Dragonman]

I got the impression it would be a hard long battle and with my lawyer in Bangkok and expensive to get him down I felt the 'top man' was enjoying himself too much

<{POST_SNAPBACK}>

Usufruct is not just dished out to farangs willy nilly, you cant just waltz into your local land office in your union jack shorts and expect the officer there to action this for you. I had to involve a heavyweight local developer and his legal team to negotiate this facilty so I could offer it to my customers.

<{POST_SNAPBACK}>

I find the union jack shorts only work when combined with the knotted handkerchief I still find it surprising that "negotiations" are necessary when registration of usufructory interests are proposed. Do they just pretend the Civil Code does not exist, or is it just a matter of procrastination for "donations" to the next Songkran party. Luckily I am retired and don't need to have many dealings with the idiots who so frequently work at driving licence centres, land offices, banks, amphurs, etc., etc. They seem to think that all farangs do not have a clue regarding Thailand, whilst actually it is the thais themselves who seem to work by ignorance and "urban myths".

After the rant, do people ask you about usufructs, and what does the legal team you mention think of them? I would think that a concept developed over 2100 years ago might cause a bit of confusion.

[Thaipwriter]

After the rant, do people ask you about usufructs, and what does the legal team you mention think of them? I would think that a concept developed over 2100 years ago might cause a bit of confusion.

Agree 100% with your rant, sometimes I feel as though i know more than the folks who i am dealing with in the various gov offices!

Some customers enquire about usufruct, not many though. I

Legal team have no experience of a usufruct held by a farang actually being contested in court. This is the main bugbear i think with usufruct. Its ok having your name on the chanote but will it hold water in court???? thai lawyers cannot answer that question for me. As such i stick with the lease as the main recommendation.

[Dragonman]

After the rant, do people ask you about usufructs, and what does the legal team you mention think of them? I would think that a concept developed over 2100 years ago might cause a bit of confusion.

<{POST_SNAPBACK}>

Agree 100% with your rant, sometimes I feel as though i know more than the folks who i am dealing with in the various gov offices!

Some customers enquire about usufruct, not many though. I

Legal team have no experience of a usufruct held by a farang actually being contested in court. This is the main bugbear i think with usufruct. Its ok having your name on the chanote but will it hold water in court???? thai lawyers cannot answer that question for me. As such i stick with the lease as the main recommendation.

<{POST_SNAPBACK}>

Some advice regarding usufructs. If your client insists on the interest, be sure they include an inventory of the property they are taking the usufruct on. A list of all items, including house, trees, walls, etc possibly including photographs. As the Thai law was originally taken from the Napoleonic Code, which requires an inventory, it will save problems in the future.

It is good to see laws introduced by dictators to control the lands they had obtained, being put to such good use.

[Thaipwriter]

Some advice regarding usufructs. If your client insists on the interest, be sure they include an inventory of the property they are taking the usufruct on.

Thanks for that info, I was not aware of that.

Once the inventory is complete, what happens then?

Do both parties have to sign it?

Is a copy lodged at the land dept and filed with the title deed??

anything else?

[Sheryl]

After discussing with my lawyer (a thai) about "usufruct" the major disanvantage of this method of holding land is that:

"once you invested to that land and arranged it you are "married" with that arrangement for the rest of your life; no chance to sell it etc. So you must be pretty sure that you want to keep that piece of land 'till you die."

Company holding is more expensive but you are very free and able to change the land into cash fairly quickly if changes in your life occur.

(My situation is that I am in my early 30s so I'd think three times at least before involving myself with such an arrangement. Or at least I'd keep in mind that all investments put into that piece of land are easily a goodbye. Meaning that I cannot be sure if I'll still be here in a year's time.)

To my understanding the 30 year leases come with a guranateed onetime renewal so it's really 60 years. Doubtful that many folk getting property in Thailand are under 25 and also doubtful that anyone would evict an 85+ year old...I have a 30 year lease issued when I was in my forties so I feel perfectly secure in being able to stay for life if I want to, while also having the right to sell or sublease .

[Dragonman]

Some advice regarding usufructs. If your client insists on the interest, be sure they include an inventory of the property they are taking the usufruct on.

<{POST_SNAPBACK}>

Thanks for that info, I was not aware of that.

Once the inventory is complete, what happens then?

Do both parties have to sign it?

Is a copy lodged at the land dept and filed with the title deed??

anything else?

<{POST_SNAPBACK}>

Yes, the inventory signed by both parties, should be attached to the deeds. However probably not that many land offices have done such and may raise an eyebrow. However it is really common sense in that under usufructory law the land must be returned to the freehold owner in the same condition when the usufruct term comes to an end, taking into account fair wear and tear. Thus if the owner deems there is anything missing or in poor condition they can sue.

Also there is an interesting fact regarding fire.Where if the property is destroyed by fire the usufruct comes to an immediate end. Sounds too tempting in Thailand

I understand now why the thai civil code is somewhat strange at times, for some reason legal advice was sought from french and belgian lawyers in its preparation

[Dragonman]

After discussing with my lawyer (a thai) about "usufruct" the major disanvantage of this method of holding land is that:

"once you invested to that land and arranged it you are "married" with that arrangement for the rest of your life; no chance to sell it etc. So you must be pretty sure that you want to keep that piece of land 'till you die."

Company holding is more expensive but you are very free and able to change the land into cash fairly quickly if changes in your life occur.

(My situation is that I am in my early 30s so I'd think three times at least before involving myself with such an arrangement. Or at least I'd keep in mind that all investments put into that piece of land are easily a goodbye. Meaning that I cannot be sure if I'll still be here in a year's time.)

<{POST_SNAPBACK}>

To my understanding the 30 year leases come with a guranateed onetime renewal so it's really 60 years. Doubtful that many folk getting property in Thailand are under 25 and also doubtful that anyone would evict an 85+ year old...I have a 30 year lease issued when I was in my forties so I feel perfectly secure in being able to stay for life if I want to, while also having the right to sell or sublease .

<{POST_SNAPBACK}>

I'm afraid Thai law does not allow guaranteed renewals of 30 year leases. This is the maximum amount allowed. However what you have is a 30 year lease with an "option agreement" for a further 30 years. The option agreement is in fact a personal contract and does not have the legal standing of a lease. In other words it's better than nothing as long as you don't put too much faith in it, as they are easier to break than eggs with a sledgehammer.