Q. On Usufruct

[PMK]

Hi,

A Thai friend did some searching on usufructs and found some references to problems removing the usufruct from the chinote once the holder had either died or did no longer want to enforce it. Is this true - is it difficult or worse?

Thank you.

[jamescollister]

If it is a life usufruct and the guy dies the usufruct dies with him.

If the guy just stops using the land nothing your friend can do. It doesn't say he must use it, just that he has the right to use it. Jim

[PMK]

If it is a life usufruct and the guy dies the usufruct dies with him.

If the guy just stops using the land nothing your friend can do. It doesn't say he must use it, just that he has the right to use it. Jim

My question is on what happens in practice. I've heard, and have no idea if it's true or not, that in the event the person dies or decides he would like to remove the usufruct restriction, it can be very difficult to get it cleared from the chinote.

[jamescollister]

If it is a life usufruct and the guy dies the usufruct dies with him.

If the guy just stops using the land nothing your friend can do. It doesn't say he must use it, just that he has the right to use it. Jim

My question is on what happens in practice. I've heard, and have no idea if it's true or not, that in the event the person dies or decides he would like to remove the usufruct restriction, it can be very difficult to get it cleared from the chinote.

If the person that holds the usufruct dies, you get a copy of the death certificate or the local headman to go and confirm the death.

If the person who wholes the usufruct does not want to or is not there, the usufunct can not be avoided without a court order.

You are talking Thai or farang, different story. Jim

[Khun Jean]

A usufruct stays on the chanote even when the owner dies or sells/transfers the land.

That is the whole point of it.

The only one who can cancel it is the one having the usufruct.

[jamescollister]

A usufruct stays on the chanote even when the owner dies or sells/transfers the land.

That is the whole point of it.

The only one who can cancel it is the one having the usufruct.

He's not talking about the land owner dying, he talking about the usufruct holder dying. Jim

[diddums]

He is also asking about the usufructee removing it himself if he no longer wants to use the land.

A situation could be that the usufruct owner wishes to remove it to sell it with his wife or partner....how easy is that ?

[uptheos]

problems removing the usufruct from the chinote once the holder had either died or did no longer want to enforce it.

If the person holding usufruct doesn't want it any more, I believe he/she can go with the land owner to the land office and sign a form declaring that usufruct is no longer wanted. I don't see how the name can actually be removed from the chanote, they might strike it through or write something together with a stamp It could be that the paper that is signed is simply attached to the chanote? I really am not sure, but I'd like to know.

[ballbreaker]

OP its very easy to cancel usufruct. Land owner and grantee of usufruct sign agreement to cancel usufruct and then register at land office. Entry is made on back of chanote reflecting usufruct has been canceled.

I went through the process in 2011 because no longer wanted to live on or be responsible for property.

[PMK]

A usufruct stays on the chanote even when the owner dies or sells/transfers the land.

That is the whole point of it.

The only one who can cancel it is the one having the usufruct.

I'm not asking about what happens if the owner dies, but the holder/the beneficiary/ the person with the right to live on/use the land does, but I think it has been answered already. Ballbreaker, I just saw your definitive reply on the second question - thank you, and everyone. Personally, I've decided that if i do it I will just put it on for 30 years, which is longer than I will live for sure, so if there is any problem establishing proof of death at least the land will not be in limbo forever.

[jamescollister]

A usufruct stays on the chanote even when the owner dies or sells/transfers the land.

That is the whole point of it.

The only one who can cancel it is the one having the usufruct.

I'm not asking about what happens if the owner dies, but the holder/the beneficiary/ the person with the right to live on/use the land does, but I think it has been answered already. Ballbreaker, I just saw your definitive reply on the second question - thank you, and everyone. Personally, I've decided that if i do it I will just put it on for 30 years, which is longer than I will live for sure, so if there is any problem establishing proof of death at least the land will not be in limbo forever.

Thought you were talking about a Thai on Thai thing. Are you now saying that you are getting the usufruct.

Things are different for farangs, usufructs are not back door home ownership for farangs.Jim

[diddums]

Can the land owner with a usufruct on it, still sell the land or borrow funds against it while the usufruct is current ?

If yes, if the usufruct owner consulted or notified or have any say in such ?

[jamescollister]

Can the land owner with a usufruct on it, still sell the land or borrow funds against it while the usufruct is current ?

If yes, if the usufruct owner consulted or notified or have any say in such ?

Don't believe the owner of the land could borrow money on the land, as the usufruct would still stand under the 3rd party rule. Not to say that they could not borrow the money, but don't think anyone would lend them money with a usufruct on the land.

Though nothing to stop the land owner from giving a new usufruct to some one else. You can have more than one usufruct one the same land, that's legal.

As said usufruct are not for habitation [ houses ] but rights to use the land for a purpose. Jim

[diddums]

Can the land owner with a usufruct on it, still sell the land or borrow funds against it while the usufruct is current ?

If yes, if the usufruct owner consulted or notified or have any say in such ?

Don't believe the owner of the land could borrow money on the land, as the usufruct would still stand under the 3rd party rule. Not to say that they could not borrow the money, but don't think anyone would lend them money with a usufruct on the land.

Though nothing to stop the land owner from giving a new usufruct to some one else. You can have more than one usufruct one the same land, that's legal.

As said usufruct are not for habitation [ houses ] but rights to use the land for a purpose. Jim

Interesting, did not know that.

Wonder if special clauses can be incorporated into one.

Thing is if you were over a certain age, say with prospects of no living more than 30 years and say said land was worth a lot of money and the owner needed funds, a person could in fact buy that land for a cheap cash price and be happy to sit out the timeframe of the usufructee, an investment so to speak for kids or such with a low ingoing by comparison to the current value.

[jamescollister]

Can the land owner with a usufruct on it, still sell the land or borrow funds against it while the usufruct is current ?

If yes, if the usufruct owner consulted or notified or have any say in such ?

Don't believe the owner of the land could borrow money on the land, as the usufruct would still stand under the 3rd party rule. Not to say that they could not borrow the money, but don't think anyone would lend them money with a usufruct on the land.

Though nothing to stop the land owner from giving a new usufruct to some one else. You can have more than one usufruct one the same land, that's legal.

As said usufruct are not for habitation [ houses ] but rights to use the land for a purpose. Jim

Interesting, did not know that.

Wonder if special clauses can be incorporated into one.

Thing is if you were over a certain age, say with prospects of no living more than 30 years and say said land was worth a lot of money and the owner needed funds, a person could in fact buy that land for a cheap cash price and be happy to sit out the timeframe of the usufructee, an investment so to speak for kids or such with a low ingoing by comparison to the current value.

You can't add clauses, the agreement is standard issued by the land office. Anything outside of that has no validity.

And yes if you could find someone who wanted to sell land with a usufruct on it [cheap ] your Thai wife or kids would be on a winner. Jim

[PMK]

I'm not asking about what happens if the owner dies, but the holder/the beneficiary/ the person with the right to live on/use the land does, but I think it has been answered already. Ballbreaker, I just saw your definitive reply on the second question - thank you, and everyone. Personally, I've decided that if i do it I will just put it on for 30 years, which is longer than I will live for sure, so if there is any problem establishing proof of death at least the land will not be in limbo forever.

Thought you were talking about a Thai on Thai thing. Are you now saying that you are getting the usufruct.

Things are different for farangs, usufructs are not back door home ownership for farangs.Jim

Jim, what is the difference for farangs and Thais on this?

[jamescollister]

I'm not asking about what happens if the owner dies, but the holder/the beneficiary/ the person with the right to live on/use the land does, but I think it has been answered already. Ballbreaker, I just saw your definitive reply on the second question - thank you, and everyone. Personally, I've decided that if i do it I will just put it on for 30 years, which is longer than I will live for sure, so if there is any problem establishing proof of death at least the land will not be in limbo forever.

Thought you were talking about a Thai on Thai thing. Are you now saying that you are getting the usufruct.

Things are different for farangs, usufructs are not back door home ownership for farangs.Jim

Jim, what is the difference for farangs and Thais on this?

There is a list a mile long on the difference between a Thai and a foreigner, which bits may effect you depend on who holds the land title.

Little things like it is illegal to give money to a Thai to buy land for a farang. If some Thai person just wants to give you their land different story.

If in wife's name, she can avoid the usufruct as easily as you put it on [sec 1469 ]

Usufructs are not about home ownership, but the right to use land for pleasure and profit. You as a farang need a W/P, a privilege, but the usufruct gives the right to work.

Just too many ifs, the land office only registers things and don't care, but some law enforcement agency may care one day.

Be careful in what you sign, making a false statement is a crime. Jim

[Khun Jean]

Little things like it is illegal to give money to a Thai to buy land for a farang.

As this is an impossibility it is not a question if it is legal or not. It can not be done.

When you give money to a Thai it is theirs and the land is also theirs.

Someone can interpret it as using the Thai as a nominee, but as money changes hands the Thai is NOT a nominee.

The best thing you can get back for money is a usufruct or a lease, but then it is not a gift but a contract, also not illegal.

[jamescollister]

Little things like it is illegal to give money to a Thai to buy land for a farang.

As this is an impossibility it is not a question if it is legal or not. It can not be done.

When you give money to a Thai it is theirs and the land is also theirs.

Someone can interpret it as using the Thai as a nominee, but as money changes hands the Thai is NOT a nominee.

The best thing you can get back for money is a usufruct or a lease, but then it is not a gift but a contract, also not illegal.

Seem to remember a Chinese company tried it and the Thai court confiscate 10,000 rai of rice land . Last year or the year before.

If you give money to a Thai and then claim a usufrunt or lease on the land, you break the law.

Not seen anyone post or cite exceptions to the law.

You can't just pick bits here and there, you have to read the law in it's entirety.

As a non Thai you can not own or control the use of land.

There are other thing like habitation, not looked in to it.

Under Thai law you can own a condo, or 1 rai off land if you invest X amount of money. That's it. Jim

[diddums]

How does a lease stand up with your partner if you are NOT married to her ?

I know a lease can be thrown out of court because of some deal between husband and wife like that cannot be upheld etc...so wonderin how the not married bit affects that outcome ?

Usufruct is scary now considering the owner can put any number of fructs on it, did not know that before, if it is in fatc the case....it makes usufructs an absolute waste of time and money.

[jamescollister]

How does a lease stand up with your partner if you are NOT married to her ?

I know a lease can be thrown out of court because of some deal between husband and wife like that cannot be upheld etc...so wonderin how the not married bit affects that outcome ?

Usufruct is scary now considering the owner can put any number of fructs on it, did not know that before, if it is in fatc the case....it makes usufructs an absolute waste of time and money.

On the lease front again some big holes. If you can get a lease from a bank or construction company, that may well be safe.

Doing it through a G/F has a few obvious draw back.

One, Thai law recognizes common law wife's, many Thais never register a marriage. Not sure as to what would be needed to classed as a commmon law wife, but would think living in her house for a period of time as man and wife would do it.

Also on the lease front, it really is a long term rental agreement, so you buy the land and build a house, then you rent it back. While G/F is happy no problem, if G/F gets unhappy she can demand the rent. Now you may have put the rent at one Baht a month. G/F runs off to the tax department who can or maybe already deemed the rental value of your house and land package, for tax purposes. Then you have to pay the rent deemed.

You pay for the lot twice.

As said usufructs are not about housing, they are about farming, quarry's or mining. A house for the purpose of a usufruct is not classed as immovable property and the usufruct does not cover the house. The owner can move that movable property at any time.

Do you really think that people like Tesco, Toyota hotel chains etc would not use them if they were safe. Jim

[uptheos]

Also on the lease front, it really is a long term rental agreement, so you buy the land and build a house, then you rent it back. While G/F is happy no problem, if G/F gets unhappy she can demand the rent. Now you may have put the rent at one Baht a month. G/F runs off to the tax department who can or maybe already deemed the rental value of your house and land package, for tax purposes. Then you have to pay the rent deemed.

You pay for the lot twice.

When you make a 30 year lease, don't you have to put what is deemed a 'fair' rent by the land office on the lease and if you don't they will decide for you? Something to do with tax.....I'm not sure that's why I'm questioning.

[jamescollister]

Also on the lease front, it really is a long term rental agreement, so you buy the land and build a house, then you rent it back. While G/F is happy no problem, if G/F gets unhappy she can demand the rent. Now you may have put the rent at one Baht a month. G/F runs off to the tax department who can or maybe already deemed the rental value of your house and land package, for tax purposes. Then you have to pay the rent deemed.

You pay for the lot twice.

When you make a 30 year lease, don't you have to put what is deemed a 'fair' rent by the land office on the lease and if you don't they will decide for you? Something to do with tax.....I'm not sure that's why I'm questioning.

Not sure who deems the rent at first but the tax office will want the tax from the land owner, as it is income.

Guess you could pay your G/F the 30 years rent then get her to give it back [maybe] or she may just put the check in the bank and be gone the next day.

Also it could be seen as you trying to circumvent Thai land law by taking the money back.

To be honest don't think there really is away of getting round the land laws, you might get away with it for years, but only takes one Government guy to ask a few too many questions.

Think just rent, it will cost the same over time and if things go wrong you may not want to stay there anyway. Jim

[uptheos]

Also on the lease front, it really is a long term rental agreement, so you buy the land and build a house, then you rent it back. While G/F is happy no problem, if G/F gets unhappy she can demand the rent. Now you may have put the rent at one Baht a month. G/F runs off to the tax department who can or maybe already deemed the rental value of your house and land package, for tax purposes. Then you have to pay the rent deemed.

You pay for the lot twice.

When you make a 30 year lease, don't you have to put what is deemed a 'fair' rent by the land office on the lease and if you don't they will decide for you? Something to do with tax.....I'm not sure that's why I'm questioning.

Not sure who deems the rent at first but the tax office will want the tax from the land owner, as it is income.

Guess you could pay your G/F the 30 years rent then get her to give it back [maybe] or she may just put the check in the bank and be gone the next day.

Also it could be seen as you trying to circumvent Thai land law by taking the money back.

To be honest don't think there really is away of getting round the land laws, you might get away with it for years, but only takes one Government guy to ask a few too many questions.

Think just rent, it will cost the same over time and if things go wrong you may not want to stay there anyway. Jim

I thought that's why the land office will insist on a fair rent on the contract, they work together with the tax office? The same as when land is sold, no-one declares the correct amount, but at the same time they won't let you get away with 'murder'.

Edited February 1, 2013 by uptheos

[jamescollister]

Also on the lease front, it really is a long term rental agreement, so you buy the land and build a house, then you rent it back. While G/F is happy no problem, if G/F gets unhappy she can demand the rent. Now you may have put the rent at one Baht a month. G/F runs off to the tax department who can or maybe already deemed the rental value of your house and land package, for tax purposes. Then you have to pay the rent deemed.

You pay for the lot twice.

When you make a 30 year lease, don't you have to put what is deemed a 'fair' rent by the land office on the lease and if you don't they will decide for you? Something to do with tax.....I'm not sure that's why I'm questioning.

Not sure who deems the rent at first but the tax office will want the tax from the land owner, as it is income.

Guess you could pay your G/F the 30 years rent then get her to give it back [maybe] or she may just put the check in the bank and be gone the next day.

Also it could be seen as you trying to circumvent Thai land law by taking the money back.

To be honest don't think there really is away of getting round the land laws, you might get away with it for years, but only takes one Government guy to ask a few too many questions.

Think just rent, it will cost the same over time and if things go wrong you may not want to stay there anyway. Jim

I thought that's why the land office will insist on a fair rent on the contract, they work together with the tax office? The same as when land is sold, no-one declares the correct amount, but at the same time they won't let you get away with 'murder'.

Not sure on it or if the land office sets the rent for the land and not the house. Could have a million dollar house or a hut.

You could go ask them.

I have a house and a lot of land, all in wife's name, 2 kids and would come away with nothing, be it here or back in OZ.

Life's a gamble. Jim

[uptheos]

I thought that's why the land office will insist on a fair rent on the contract, they work together with the tax office? The same as when land is sold, no-one declares the correct amount, but at the same time they won't let you get away with 'murder'.

Not sure on it or if the land office sets the rent for the land and not the house. Could have a million dollar house or a hut.

You could go ask them.

I have a house and a lot of land, all in wife's name, 2 kids and would come away with nothing, be it here or back in OZ.

Life's a gamble. Jim

No, I have no interest in asking them, I'm all settled, just discussing.

[diddums]

Of course you all know and realise the difference between renting and owning...or owning somewhat.

[jamescollister]

uptheus.

On the land departments assessment for transfer tax or rent assessment. We approached them some years about the sale of some land .

Some people were interested in buying, this land, was not only charnote, but zoned for industrial use. My Thai is not good and a lot gets lost in translation, but they quoted only the land value as per transfer tax. I was surprised at the high land value and they did not seem interested in anything else but the land.

The interested party was making inquires at 3 times the land value, not really the buildings, but the license was what they were interested in.

Think other tax agencies would have been involved, same would apply to a lease agreement , you are not just leasing the land, but the buildings, could be a hut or a resort with a 100 rooms.

Death and taxes, no escape.

Of course you could try and get the lease before you built the house, then you would only be stuck with the land rental, don't know much about habitation rights.Someone else many have read up on them. Jim