Usufruct Agreement Provided By The Land Office ..

[Orangutan]

Hello,

I have done a lot of reading about securing an Usfruct in Thailand for the purpose of inhabiting a house owned by a Thai spouse. Has anyone ever used the simple Usfruct Agreement provided by the Land Office? I recently saw a copy of a Usfruct Agreement that was attached to a Chanote by the Land Office in Bangkok. I was told that it cost 220 baht to have it certified and attached when registering the Chanote.

Any first had experiences or knowledge?

Thank in advance,

-O

[happynthailand]

just get a yellow book

[soi41]

Problem with usufruct between spouses is that it can be voided by divorce!

[bushwacker]

Happy ... I think you missed the entire point! A yellow book offers zero protection!

[ballbreaker]

My usufruct used the standard form provided by the land office and cost just a couple hundred baht to register. An entry is also placed on the back of Chanote detailing basic info of usufruct.

As stated previously either party can cancel. In case of divorce either party can cancel within one year otherwise it remains valid.

[Orangutan]

ballbreaker thanks for your reply, and first hand experience at the land office. It does not appear that one has to use an attorney to accomplish this task.

-O

[Khun Jean]

I would like to add that bringing a lawyer will often make the task more difficult!

Lawyers like to make easy stuff complicated and when a employee at the land office has to attach a contract made by a lawyer they are very hesitant.

A standard document however is just that, they are comfortable with it and therefore very straight forward.

When married it only offers protection when your spouse dies or when you include a third person, ideally it is a family member you trust from your side, and hopefully someone that is also younger. For someone who has children from a previous relationship it is a good way to have some form of use of the property by your offspring when you are not around anymore.

Edited October 14, 2012 by Khun Jean

[Rajab Al Zarahni]

The real test of effectiveness of any legal instrument is not how well it appears to have been drawn up but what happens when you try to enforce it. The unhappy event of trying to enforce an agreement in a Thai civil court may take place years after the instrument was instigated. If faced with the same problem, I would get one firm of lawyers to draw up the agreement and provide written advice on the process and another firm to advise on whether the agreement and advice I have been given is in any way flawed!

[Khun Jean]

Any contract written by a lawyer that is read by another lawyer is considered flawed.

In Thailand you can add unacountable to the things stacked against you.

Relying on standard forms is very important. Especially for a usufruct.

It is very clear what it means and you don't have to worry one bit.

A standard usufruct document will not even be considered in court, because there is nothing to 'decide'.

Once you start adding clauses, then it is getting more difficult and time consuming.

Don't think that the lawyer who wrote the contract is of any help in that case.

The only ones who are responsible are the ones who signed it.

[ballbreaker]

I can assure everyone the standard usufruct form used by land office will stand up.

My wife passed away last year and I had no problems in court with her will or the usufruct agreement. When I transferred ownership of house and land to family member named in will the land office made sure they understood that although they would be the new owner I still had complete control and use of property until my death because of a prior usufruct agreement that existed on property. With their signature they are accepting property and prior usufruct agreement.

[manarak]

I can assure everyone the standard usufruct form used by land office will stand up.

My wife passed away last year

condolences.

but the theoretical problem here is what happens with the usufruct agreement in case of a divorce if the usufruct has been signed within the marriage period.

[Orangutan]

I concur with Khun Jean's comments above, and I will not be bringing a lawyer with me. Although I will be accompanied my my Thai architect, who is an astute business professional to keep an eye on things.

ballbreaker my deepest sympathy regarding your loss. Since I am not concerned about any reference regarding a divorce, your experience, and comments are greatly appreciated.

This has turned into a good discussion, just what I wanted.

Go Kindly,

-O

[Khun Jean]

I can assure everyone the standard usufruct form used by land office will stand up.

My wife passed away last year

condolences.

but the theoretical problem here is what happens with the usufruct agreement in case of a divorce if the usufruct has been signed within the marriage period.

There is not anything theoretical. Thinking that makes it difficult.

Upon divorce every contract between spouses have to be dissolved.

There wouldn't be a clean divorce if it was not for that. After the divorce you can negotiate a new contract.

[ballbreaker]

From Thai civil code:

Section 1469. 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 are not affected thereby.

[manarak]

From Thai civil code:

Section 1469. 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 are not affected thereby.

So, it looks like an usufruct agreement including other co-usufructees could stand... for example children?

Just an idea.

Second... If buying land, the buyer could make an usufruct with the seller before the actual sale to the wife, so the original usufruct agreement is not between wife and husband. I wonder if that would stand.

Edited October 17, 2012 by manarak

[Khun Jean]

Manarak, both are correct.

Children can have complications when they are underage. Any improvement of the land would have to be in the childrens interest and this can only be decided by court.

The second option you mentioned should have a reasonable time frame between both registrations, otherwise it will be seen as actively circumventing the law. Although it strictly is within the law it is not really in the spirit of the law. It's best to stay within the spirit of the law to have cooperation from the land office. You would not want to have the risk that the first registration goes without problems and the second being refused.

Another way, i did that, is to let your mother/father in law buy it, then a few months later get a usufruct and again later transfer it to your wife. At least the real ownership is then in the family and the second step to transfer it to your wife is much more certain. You do have to trust your inlaws however.

You can replace 'could stand' and 'would stand' with 'will stand'.

Edited October 17, 2012 by Khun Jean

[Daffy D]

So armed with the information from this forum wifey and I went to the land office to

make an Usufruct agreement for us before "gifting" the land and house to the children.

After many hours waiting with the mass of other people and being shuffled from one

desk to the next we Finlay got to the desk of "Mr Big" at the back of the room.

He was very nice and helpful but informed us that any Usufruct agreement made now would be void / canceled upon transfer of the land to the children. He said the only way would be to transfer the land to the children first and then make a Usufruct which would involve lots of extra paperwork as it had to then go through the courts.

Is this correct?

If you have a Usufruct and the land is sold or transfered to a third party, like your children, does that invalidate the Usufruct ?

Does not sound like a "Usufruct for life" is such a safe bet after all.

[Khun Jean]

What to say, i guess the mans real job is having a som tam food stand.

The whole point about a usufruct (and registered leases) is that when it is sold it is still valid.

Transfering to children might be an exception (to somehow protect children). I doubt that very very much.

The problem now is that the 'big boss' is convinced of this, and him loosing face by telling him he is wrong would accomplish nothing. A lawyer that can pull some weight might work.

Or maybe find another way that reaches the same goal in the end.

Edited November 16, 2012 by Khun Jean

[ballbreaker]

Perhaps the children are the reason it cannot be done. The transfer process, even though a gift, would require the children to accept the usufruct contract that exist on the land and under Thai law they cannot sign necessary documents because under age. In my case the person willed the property by my wife was required to sign a paper agreeing to the usufruct otherwise land office would not transfer property to their name.

[rockymountain]

A usufruct contract in Thailand refers to the registered right to use, possess, management and occupy another man's real property for one's lifetime or up to 30 years. A usufruct right exists as long as the holder(s) of the usufruct rights is alive, but after his or her death the real estate property reverts back to the owner.

The usufruct must be recorded in the official land registry of the local land office. By registering the usufruct agreement the public is put on notice of the recorded usufruct burden and becomes effective against third parties, e.g against a tranfereee owner if the property is transferred.

[Daffy D]

Seems I made a basic mistake of thinking that these officials could multitask.

As has been suggested the way to do go is one step at a time.

Get the Usufruct first then sort out the land transfer at a later date.

Best not to confuse the official by trying to achieve something beyond their capabilities.

[sms747]

I would like to add that bringing a lawyer will often make the task more difficult!

Lawyers like to make easy stuff complicated and when a employee at the land office has to attach a contract made by a lawyer they are very hesitant.

Wow I was quoted 40k by a well known law firm for doing a simple usufruct, I did not know you could do it for 220 baht. Luckily we have not completed yet so I will look into it when the time comes

[Farang0tang]

My scenario is below, would appreciate feedback:

1. Thai GF (soon to be wife) currently making monthly payments whilst new house is being built. (yes I'm funding the payments).

2. On completion of house build, a mortgage (I am assured) will be available from Kasikorn. (GF has already met with the bank lender).

3. House is then paid off in full to the developer and ownership transferred to GF (now wife).

4, Mortgage payments continue with the bank (yes, I'm funding the payments)

So I would like some sort of protection. Big point is (and main reason for buying) - We have a 3 year old child together.

Makes sense to me to somewhere along the route transfer the house and ownership from wifey to child, and then leasing back to me for 30 years or until my passing away.

So Usufruct is the way to go - correct?

And if so, when should I/we be drawing this up? I assume can only be at point 3 above.

Will it be straightforward. Can we just get the 'form' from the land office? (complete and translate to English for my benefit)

Recommendations for translators - Pattaya area?

I know we should, but do we really need to bring in the lawyers? (if so can somebody recommend - again Pattaya area).

On the Usufruct can we specify stuff like what happens (God forbid) if the child dies before us/me? Or should this be noted in a seperate will?

If I and/or mother die (or relationship goes pear shaped) will the kid, if under age - (what is the age again?) will she be protected from deviousness!

Another thought just come to mind - during the mortgage payments period, is the house not owned by the lender/bank?

Which would mean unable to transfer over to the kid until payments were completed?

Appreciate any replies.

Cheers

Edited December 4, 2012 by Farang0tang

[ballbreaker]

Farang0tang I think you can forget about a lease or usufruct being issued until mortgage you mention in number 4 is paid off.

[Khun Jean]

The real problem. You can't do all that while the chanot is in the hands of the bank because of the mortgage. They will not accept it.

This can only be solved by paying everything in cash. (Persanol loan from somewhere else).

You can then go to the next step.

It would be much better if the transfer to the GF is done when she is still not your wife.

Then get a usufruct for live (about 150 baht) or a lease for 30 years (taxes have to be paid).

Contracts between spouses are not worth much. Only when the Thai spouse dies a usufruct tor lease is a protection.

Let the wife make a will that the land/house is for the child.

Edited December 4, 2012 by Khun Jean

[TommoPhysicist]

My usufruct used the standard form provided by the land office and cost just a couple hundred baht to register. An entry is also placed on the back of Chanote detailing basic info of usufruct.

As stated previously either party can cancel. In case of divorce either party can cancel within one year otherwise it remains valid.

Unless you throw in a few 3rd parties (hint: children)

So a slight change of wording to: 'Mr. Bloggs has the right to live and manage the property with his 3 children.'

Wriggles you out of the 'may be canceled by spouse' clause.

Edited December 4, 2012 by TommoPhysicist

[Farang0tang]

Farang0tang I think you can forget about a lease or usufruct being issued until mortgage you mention in number 4 is paid off.

Yes this came to mind.

Thanks.

[Farang0tang]

The real problem. You can't do all that while the chanot is in the hands of the bank because of the mortgage. They will not accept it.

This can only be solved by paying everything in cash. (Persanol loan from somewhere else).

You can then go to the next step.

It would be much better if the transfer to the GF is done when she is still not your wife.

Then get a usufruct for live (about 150 baht) or a lease for 30 years (taxes have to be paid).

Contracts between spouses are not worth much. Only when the Thai spouse dies a usufruct tor lease is a protection.

Let the wife make a will that the land/house is for the child.

Thanks for the info Khun Jean.

As i mentioned the main reason for buying is so the kid can eventually inherit. (meanwhile mother and I no longer need to rent)

But this would be done via a Will made by GF/Wife and not Usufruct.(Once she/we have paid off the mortgage).

I thought reading through the house developers documents, that the house ownership gets transferred to buyer on completion of the build.

And no mention that in fact the buyer becomes the bank - if under mortgage?

Just that we would be liable to the bank to meet the mortgage - which of course could mean reposession of the house if we fault.

[TommoPhysicist]

The buyer will be your gf

A loan will be recorded on the back of the Chanote naming the bank and the amount.

Until the loan is paid off, the property can't be sold.

Usufruct can't be done on home with bank loan.

Child can't own property with debt.

Why are you assuming your gf will go along with anything when the loan is paid off?

It will be her house alone to do with as she wishes.

Edited December 4, 2012 by TommoPhysicist

[Farang0tang]

The buyer will be your gf

A loan will be recorded on the back of the Chanote naming the bank and the amount.

Until the loan is paid off, the property can't be sold.

Usufruct can't be done on home with bank loan.

Child can't own property with debt.

Why are you assuming your gf will go along with anything when the loan is paid off?

It will be her house alone to do with as she wishes.

Hypothetically, surely the property, even though not fully paid off, can be sold to release the equity (if any), and squaring up with the outstanding amount owned to bank.

Of course the gf/wife can do as she wishes once its paid off, - but I have to assume she is sincere when she states she will do whats best for our daugher.

Even if it means booting me out, (and losing the cash cow), at least the kid will have a nice home to inherit - which is the main objective.