Usufructuary Can Issue 30Yr Lease?

[cheeryble]

"Even if the Usufruct will end at the death of the Usufructuary (or a fixed period of time) , the Usufructuary can lease out the land to a third party and this second agreement will NOT end when the Usufructuary dies as per the Supreme Court ruling 2297/1998......"

Is this kosher? Can I issue a 30yr lease based on a lifetime usufruct?

Cheeryble

ps: sorry to duplicate this question I asked in another thread but would like advice ASAP i am negotiating now.

As i said in that other thread i am interested because it means I could sell on an adjoining chanoot lot much easier, but this would be very important indeed for those with a nominiee who turned disagreeable, because if they asked the nominee to sell the lot and were refused, they could mention that either that nominee can take a payoff now for expediting things or wait for a new 30 yr lease to finish, and that 30yr lease might only be given only when the usufructuary is old or sick,so it could be a 40 or 50yr wait (unless usufructuary is whacked before the lease!)

This seems to me a very strong incentive indeed to cooperation, and may tilt the scale away from superficies where I don't believe it's possible (correct?)

[stgrhe]

There is no section in the law that supports that assumption.

Section 1418 – A usufruct may be created either for a period of time or for life of the usufructuary.

If no time has been fixed, it is presumed that the usufruct is for the life of the usufructuary. If it is created for a period of time, the provisions of Section 1403 paragraph 3 *) shall apply mutatis mutandis.

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

From the above section, 1418, you can see that the law states that the usufruct expires upon the usufructuary's passing.

Section 1422 – Unless otherwise provided in the act creating a usufruct, the usufructuary may transfer the exercise of his right to a third person. In such case the owner of the property may sue the transferee direct.

And i section 1422 you can see that the usufructuary "can exercise his right to a third person", which is likely to be interpreted as the right to provide a sub-usufruct to someone else.

[haveaniceday]

I do not know the answer, but I have been surprised when I have read on this this site, that many people claim that it is the case that the 30 year lease will still stand. Defiantly need good legal advise on this one. Way to many opinions. At least int he post above there is some supported documents.

I had a look on Sunbelts site, but your question is not answered directly. Maybe give them a call, they seem to deal with allieans allot form Planet Earth, (as apposed to Planet Thailand

[cheeryble]

Section 1418 – A usufruct may be created either for a period of time or for life of the usufructuary.

If no time has been fixed, it is presumed that the usufruct is for the life of the usufructuary. If it is created for a period of time, the provisions of Section 1403 paragraph 3 *) shall apply mutatis mutandis.

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

From the above section, 1418, you can see that the law states that the usufruct expires upon the usufructuary's passing.

I'm no legal man Strghe, but while the usufruct may expire, couldn't lawful agreements made during the usufruct term run on until completion. The usufructuary is after all allowed to take financial advantages from his position, without limits as far as I know, and unless a lawful lease is banned, not sure that he shouldn't have a perfect right to do it. If he has the right to grant it, the lessee has the right to use it.

Section 1422 – Unless otherwise provided in the act creating a usufruct, the usufructuary may transfer the exercise of his right to a third person. In such case the owner of the property may sue the transferee direct.

And i section 1422 you can see that the usufructuary "can exercise his right to a third person", which is likely to be interpreted as the right to provide a sub-usufruct to someone else.

I agree this speaks of the usufruct and only a sort of sub-usufruct, but don't see that it excludes him from doing something quite separate, taking the financial fruits of granting a lease.

But really we need a copy of the ruling to check it out....perhaps this is available to lawyers on a subscription or something.

[ProThaiExpat]

It is a basic tenet in law that you cannot grant a right greater than what you hold or have. The measuring life of one holding under a usurfuct is the entire right granted under that agreement and thus one cannot create by a subsequent deed or contract a longer period of time than you have.

The same principle applies to landlords that try to grant rights in property which he has leased previously. Since his right to possession has been conveyed away for the period of time specified in the lease, any further rights he wishes to convey must be operative after the leasehold expires.

Thus any lease executed by one holding a usurfuct will end at the end of the "measuring life", ie the usurfuct holder regardless of the term granted.

[ricklev]

Sunbelt and others claim a right to lease has been created by a Supreme Court decision.

I checked with a couple of Thammasat property law professors (I teach in the law school) recently who reviewed the published summary of the court ruling. In brief, one said that based on the summary it might be possible. The other said that there was not enough information in the opinion. Neither believed that was the intention of the decision.

In any case, simply put, the odds of any land office allowing it are about a million to one!

However if, somehow, for some reason, the land office does register the lease, then the Supreme Court decision would be very persuasive in upholding it should it be challenged.

Again though, you would be better off investing in a lottery ticket than betting that your land office might allow the lease registration.

Edited September 15, 2011 by ricklev

[ricklev]

To be a little clearer: The Thai property law professors did believe that the intention of the ruling was to protect the property rights of the innocent third party lessee.

I was hoping they would be interested enough to dig a little deeper into the ruling and find out the circumstances of the actual case, but, alas, no. Not yet anyway.....

Edited September 15, 2011 by ricklev

[cheeryble]

Not what I wanted to hear but great input....

Very meaningful for me as I have explained in another thread about "bar opens next door".

Along with some fully transferable land we will get full title on My gf is contracting to buy about 25% of the lot in six years when a restriction on transfer runs out. That leaves me deciding on how to have the best grip on the lot, making it as worthless as possible to the person contracted to sell (so they don't try to wriggle), whilst at the same time making my gf's rights as transferable onward as possible in the event she disposed of the land.

My lawyer generally favours superficies, but I believe one can't sell a lease right onwards from this (correct?).

I had therefore thought a lifetime usufruct would enable one to offer someone full title to 75% of the land along with a contracted right to buy the 25% when the 6 years is up and a 30 year lease as holding power in the meantime.

If the last posters are correct it may be better to obtain a 30 year usufruct and if I sell offer the the remainder of the 30years at that time. It should be no less than 24 years. As the 25% portion is in a front corner which probably wouldn't have a main house then if all backups failed and the contracted buy didn't happen and a court case failed, a buyer (or me) would still enjoy 100% for 24 years and fully own a perfectly usable 75% after 24 years and in perpetuity.

I think if it's a very attractive lot and house this shouldn't impede a sale even if it is'nt perfectly simple.....and chances are My gf will hold for the 6 years and get registered on the deeds meaning no transfer hindrance at all.

So to clarify

1. No problem to offer a lease from a usufruct if it's within the term of the usufruct?

2. Am I right thinking a superficiary cannot offer a lease?

3. Any more comments on the opening topic very welcome

....and thanks again!

Cheeryble

Ps: just saw your addendum thankyou Ricklev look forward to anything you hear I have to sort out this deal within days...

Edited September 15, 2011 by cheeryble

[rgs2001uk]

Sunbelt and others claim a right to lease has been created by a Supreme Court decision.

I checked with a couple of Thammasat property law professors (I teach in the law school) recently who reviewed the published summary of the court ruling. In brief, one said that based on the summary it might be possible. The other said that there was not enough information in the opinion. Neither believed that was the intention of the decision.

In any case, simply put, the odds of any land office allowing it are about a million to one!

However if, somehow, for some reason, the land office does register the lease, then the Supreme Court decision would be very persuasive in upholding it should it be challenged.

Again though, you would be better off investing in a lottery ticket than betting that your land office might allow the lease registration.

' betting that your land office might allow the lease registration' hits nail on head.

You can consult all the legal eagles you want, if the local land office wont register you are stuffed.

My first port of call would be the local office to see if they will actually register, may save a small fortune in legal fees.

[cheeryble]

' betting that your land office might allow the lease registration' hits nail on head.

You can consult all the legal eagles you want, if the local land office wont register you are stuffed.

My first port of call would be the local office to see if they will actually register, may save a small fortune in legal fees.

Good point in any case....

Do you think I need to check if they'll allow a lease given by a usufructuary within the period of the usufruct?

I could sub-usufruct, but this would be unsafe for a buyer as it would presumably finish when I dropped of the twig, hence the lease.

[ProThaiExpat]

' betting that your land office might allow the lease registration' hits nail on head.

You can consult all the legal eagles you want, if the local land office wont register you are stuffed.

My first port of call would be the local office to see if they will actually register, may save a small fortune in legal fees.

Good point in any case....

Do you think I need to check if they'll allow a lease given by a usufructuary within the period of the usufruct?

I could sub-usufruct, but this would be unsafe for a buyer as it would presumably finish when I dropped of the twig, hence the lease.

Think of the term or length of the letting. In English law there is a concept of a "life estate", the term is measured by the life of the life estate holder. A usurfuct is the continental European equivalent and again the length of the usurfuct is the life of the estate holder.

The pregnant question is, what is the term of the sub-usurfuct, certainly not the life of the sub-usurfuct holder, the length of the estate remains your life. Technically, I suppose you could use your life as a measuring stick for the length of the sub-usurfuct. Technically, you can do it but I suspect Thai law might not allow usurfucts for those other than the original estate holder. Clearly, there is no real need, is there, to use the usurfuct device when a simple lease for 30 years would technically work but would the land office allow for a lease for a fixed term when the rights of the lessee would terminate upon your death. Thus theoretically, say you were 90 years old and granted a 30 year lease, it is almost a legal certainty that the lease term would exceed the usurfuct and thus you would be conveying a right you didn't in reality, possess in that it was a right of possession far exceeding the reasonable length of the usurfuct.

Thus, a lease with a fixed term, routinely automatically renewing unless revoked, would greatly narrow the anticipated term to more approximating the usurfuct. It might fly but if the land office had never seen it done before, you know what the result would be.

[thaiwanderer]

Sunbelt and others claim a right to lease has been created by a Supreme Court decision.

I checked with a couple of Thammasat property law professors (I teach in the law school) recently who reviewed the published summary of the court ruling. In brief, one said that based on the summary it might be possible. The other said that there was not enough information in the opinion. Neither believed that was the intention of the decision.

In any case, simply put, the odds of any land office allowing it are about a million to one!

However if, somehow, for some reason, the land office does register the lease, then the Supreme Court decision would be very persuasive in upholding it should it be challenged.

Again though, you would be better off investing in a lottery ticket than betting that your land office might allow the lease registration.

' betting that your land office might allow the lease registration' hits nail on head.

You can consult all the legal eagles you want, if the local land office wont register you are stuffed.

My first port of call would be the local office to see if they will actually register, may save a small fortune in legal fees.

and......no liability attaches for the mistake of government officials so even if they do / don't register it, it doesn't mean they should have or that the registered lease will necessarily continue should the usufructuary pre-decease

I have to stifle a smirk when experts talk of a Thai Court's decision ('supreme' or not) being a precedent, showing a basic misunderstanding of Thai law.

Many of those experts also misunderstand what this single decision said anyway.

[ricklev]

' betting that your land office might allow the lease registration' hits nail on head.

You can consult all the legal eagles you want, if the local land office wont register you are stuffed.

My first port of call would be the local office to see if they will actually register, may save a small fortune in legal fees.

Good point in any case....

Do you think I need to check if they'll allow a lease given by a usufructuary within the period of the usufruct?

I could sub-usufruct, but this would be unsafe for a buyer as it would presumably finish when I dropped of the twig, hence the lease.

Don't try to figure out something you think might work which involves the land office and your usufruct. It won't work. Anything involving the land office registering an encumbrance on the chanote at the request of the foreign usufruct holder will almost certainly be rejected. Do check with them though. Should be interesting.

Edited September 15, 2011 by ricklev

[thaiwanderer]

I'm surprised Isaanlawyers and / or sunbelt haven't posted in this thread.

[cheeryble]

Great replies though thanks to all.

I have decided to go ahead with this buy if a few conditions can be legally realized as verbally agreed.

At worst, to make it attractive and liquid for a potential buyer, I could not get a usufruct from the administrator on this corner lot in my name, but let my girlfriend be the usufructuary. She as a Thai can surely issue a lease to a buyer if required. (She of course will be the owner of the rest, 75% of the whole, with me as usufructuary or whatever.)

I'm meeting with lawyer again next week and dependant on that may go to land dept to make an enquiry about all this.

Cheeryble

[ricklev]

Great replies though thanks to all.

I have decided to go ahead with this buy if a few conditions can be legally realized as verbally agreed.

At worst, to make it attractive and liquid for a potential buyer, I could not get a usufruct from the administrator on this corner lot in my name, but let my girlfriend be the usufructuary. She as a Thai can surely issue a lease to a buyer if required. (She of course will be the owner of the rest, 75% of the whole, with me as usufructuary or whatever.)

I'm meeting with lawyer again next week and dependant on that may go to land dept to make an enquiry about all this.

Cheeryble

Nothing can be said but: "Best of luck to you and your lawyer in all your endeavors!"

Edited September 18, 2011 by ricklev

[cheeryble]

Thanks Rick

Absolute worst case I don't build my modest dream home, I try to sell and no-one buys because not 101% transferable yet, and i have to wait for the 6 years to take full title and take it from there. I will then have invested in a solid asset in a great position which by then will probably have a proper blacktop soi outside and all utilities laid on. I will at the least have grown a nice landsdcape and trees to make it irresistible.

Could be worse :-)

If I can find time my gf and I will give a weekly English class the village kids, a nice thing and a great way to make friends. I dare say that might tip the balance of opinion in our favour for having upset the sellers about demanding a lien on their land with the bar banning any business next door.

Cheeryble

Edited September 18, 2011 by cheeryble

[Sunbelt Asia]

While a lease on a usufruct is technically feasible, as with everything, it would all depend on the Land Department official and the office.

[Khun Jean]

I'm surprised Isaanlawyers and / or sunbelt haven't posted in this thread.

I am not, because it all comes down to what the land office will allow. Some courts ruling in favor of it or not has nothing to do with it.

A 30 year lease has to be registered and the one who has to sign the papers is the landowner.

If you can get that done the 30 years is no problem, but it is separate from the usufruct and the periods can not overlap.

I am not a lawyer, all i know about it is learned in practice and dealings with landoffices. Your landoffice can be different. The law sides on the one taking the lease because if the landoffice agrees on it then that decision will be protected. However don't include silly unenforceable clauses because that can make the contract invalid.

A 3 year lease is not a problem because it does not need to be registered.

[thaiwanderer]

I'm surprised Isaanlawyers and / or sunbelt haven't posted in this thread.

I am not, because it all comes down to what the land office will allow. Some courts ruling in favor of it or not has nothing to do with it.

A 30 year lease has to be registered and the one who has to sign the papers is the landowner.

If you can get that done the 30 years is no problem, but it is separate from the usufruct and the periods can not overlap.

I am not a lawyer, all i know about it is learned in practice and dealings with landoffices. Your landoffice can be different. The law sides on the one taking the lease because if the landoffice agrees on it then that decision will be protected. However don't include silly unenforceable clauses because that can make the contract invalid.

A 3 year lease is not a problem because it does not need to be registered.

I wasn't actually suprised when I posted that.

While registration at the land office is the first hurdle, even if successfully negotiated it provides no protection whatsoever.

[rgs2001uk]

I'm surprised Isaanlawyers and / or sunbelt haven't posted in this thread.

I am not, because it all comes down to what the land office will allow. Some courts ruling in favor of it or not has nothing to do with it.

A 30 year lease has to be registered and the one who has to sign the papers is the landowner.

If you can get that done the 30 years is no problem, but it is separate from the usufruct and the periods can not overlap.

I am not a lawyer, all i know about it is learned in practice and dealings with landoffices. Your landoffice can be different. The law sides on the one taking the lease because if the landoffice agrees on it then that decision will be protected. However don't include silly unenforceable clauses because that can make the contract invalid.

A 3 year lease is not a problem because it does not need to be registered.

I wasn't actually suprised when I posted that.

While registration at the land office is the first hurdle, even if successfully negotiated it provides no protection whatsoever.

TW, loved the reply you gave in a previous post,

Quote,

'and......no liability attaches for the mistake of government officials so even if they do / don't register it, it doesn't mean they should have or that the registered lease will necessarily continue should the usufructuary pre-decease

I have to stifle a smirk when experts talk of a Thai Court's decision ('supreme' or not) being a precedent, showing a basic misunderstanding of Thai law.

Many of those experts also misunderstand what this single decision said anyway.'

[cardholder]

It is a basic tenet in law that you cannot grant a right greater than what you hold or have. The measuring life of one holding under a usurfuct is the entire right granted under that agreement and thus one cannot create by a subsequent deed or contract a longer period of time than you have.

The same principle applies to landlords that try to grant rights in property which he has leased previously. Since his right to possession has been conveyed away for the period of time specified in the lease, any further rights he wishes to convey must be operative after the leasehold expires.

Thus any lease executed by one holding a usurfuct will end at the end of the "measuring life", ie the usurfuct holder regardless of the term granted.

Ithink you are wrong.

A 30 year (or whatever term) lease granted by a Usufruct and registered at the Land Office will surely remain valid for the lessee.

[thaiwanderer]

It is a basic tenet in law that you cannot grant a right greater than what you hold or have. The measuring life of one holding under a usurfuct is the entire right granted under that agreement and thus one cannot create by a subsequent deed or contract a longer period of time than you have.

The same principle applies to landlords that try to grant rights in property which he has leased previously. Since his right to possession has been conveyed away for the period of time specified in the lease, any further rights he wishes to convey must be operative after the leasehold expires.

Thus any lease executed by one holding a usurfuct will end at the end of the "measuring life", ie the usurfuct holder regardless of the term granted.

Ithink you are wrong.

A 30 year (or whatever term) lease granted by a Usufruct and registered at the Land Office will surely remain valid for the lessee.

Why? The land office can err.

[ricklev]

While a lease on a usufruct is technically feasible as with everything, it would all depend on the Land Department official and the office.

"technically feasible"

FEASIBLE

Synonyms: achievable, attainable, doable, possible, practicable, realizable, viable, workable

Antonyms: hopeless, impossible, impracticable, infeasible, nonviable, unattainable, undoable, unfeasible, unrealizable, unviable, unworkable, mai dai!

Edited September 23, 2011 by ricklev

[thaiwanderer]

While a lease on a usufruct is technically feasible, as with everything, it would all depend on the Land Department official and the office.

How many long leases granted by a foreign usufructuary have you successfully registered at the Land Office?

How many have you succeeded in having a Court uphold where the usufructuary has died?

Given the 'technical' possibility of a usufructuary granting rights extending beyond their life (and therefore greater than their own rights), what land owner in their right mind / with decent legal advice would fail to preclude this in the usufruct?

[ricklev]

Eventually, hopefully, the various law firms promoting this idea will do the right thing.

It took awhile, but they finally, mostly, stopped talking nonsense about consecutive thirty year land lease renewal options. A few years ago I worked for one of the companies perpetuating that myth so I share some of the blame.

[cheeryble]

So to turn the conversation practical and useful again:

Do we think that a 30 year usufruct holder can lease onward as he wishes for the remainder of his term?

Cheeryble

[Tanaka]

So to turn the conversation practical and useful again:

Do we think that a 30 year usufruct holder can lease onward as he wishes for the remainder of his term?

Cheeryble

Yes he can. He has the right to use the land and what comes from it and that includes his right to lease it out. F.i. he can lease it to his wife. This means that in the event of his demise her greedy family cannot intimidate her to sell the land and give them the money as long as the lease is valid.

[ProThaiExpat]

It is a basic tenet in law that you cannot grant a right greater than what you hold or have. The measuring life of one holding under a usurfuct is the entire right granted under that agreement and thus one cannot create by a subsequent deed or contract a longer period of time than you have.

The same principle applies to landlords that try to grant rights in property which he has leased previously. Since his right to possession has been conveyed away for the period of time specified in the lease, any further rights he wishes to convey must be operative after the leasehold expires.

Thus any lease executed by one holding a usurfuct will end at the end of the "measuring life", ie the usurfuct holder regardless of the term granted.

Ithink you are wrong.

A 30 year (or whatever term) lease granted by a Usufruct and registered at the Land Office will surely remain valid for the lessee.

Applying your contention that you can extend the length of a usurfuct (the life of the holder)by giving a lease to your usurfuct that extends the length of time of your usurfuct suggests that the original owner and grantor of the usurfuct can lose his right of reversion upon the death of the holder of the usurfuct by the act of the holder of the usurfuct issuing a lease for longer than the usurfct is non-nonsensical. One cannot grant to another more right to property than you have been granted, regardless of what a government agency does. Granted, judicial remedy must be sought in such a case, however, land offices are a little more knowledgeable than most seem to give them credit for.

By applying your logic, a three year leaseholder could grant a usurfuct to a 21 year old.

Edited September 27, 2011 by ProThaiExpat

[cheeryble]

So to turn the conversation practical and useful again:

Do we think that a 30 year usufruct holder can lease onward as he wishes for the remainder of his term?

Cheeryble

Yes he can. He has the right to use the land and what comes from it and that includes his right to lease it out.

....and the land offices will register OK?

F.i. he can lease it to his wife. This means that in the event of his demise her greedy family cannot intimidate her to sell the land and give them the money as long as the lease is valid.

.....when I think of my gf's sweet mum