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Usufructs

in Thailand

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A Usufruct provides temporary ownership rights and is a legal right for the use and enjoyment of the profits and advantages of property belonging to another as long as the property is not damaged or altered in any way.  The usufructuary must also keep the property intact and returned in the same position that it was when the usufruct was granted.  A usufruct may be created either for a period of time (not exceeding 30 years) or for the life of the usufructuary. 

Use of Usufructs to Foreigners

Foreigners do have a right to register a usufruct on a land, however, this is still subject to the discretion of the Land Officer although the law may state otherwise. A usufruct may be registered as similar to a lease of up to 30 years and allows the right to use and benefit from the property that in essence belongs to another. The person who enters into a contractual agreement with the owner for this right is called the “usufructuary.”

The usufructuary is responsible for the expenses for the management of the property, paying taxes and duties, and be responsible for interests payable on debts charged to it.  If required by the owner, the usufructuary is bound to insure the property against loss for the benefit of the owner.  They must pay the insurance premiums for the duration of their usufruct and your right is also registered on the title deed. This right can never be sold or transferred by the owner of the land until the servitude is terminated.  A usufruct interest expires upon the death of the holder of the usufruct and therefore cannot be inherited.

The Transfer of Usufructs

The beneficiary in a usufruct scenario, the usufructuary may also transfer his rights to the usufruct to a third party according to the Civil and Commercial Code of section 1422.  The grantor of the usufruct however will still claim for damages caused by the third party directly against the usufructuary. An interesting feature of usufruct is that the usufructuary can enter into a 30-year lease with a third party.  So if the usufructuary signed a 30-year lease contract before his death, the lessee (tenant) will maintain the rights of the lease until its expiration.  Supreme Court ruling 2297/1998 states that the lessor (landlord) does not have to be the owner of the property.  Therefore the usufructuary can rent out the land.  Although in the event of death of the usufructuary within the lease term, only the usufruct will be terminated but not the lease.

Usufructs in Thailand Now

There is nothing there is stated that restricts the grants of such usufructs, however, like all other rights in relation to property, it must be noted once again that the registration of such a right is upon the discretion of the Land Officer at the Land Department and may vary between locations. It is advisable that you contact a Lawyer or Solicitor to discuss your options in regards to you specific circumstances.