Usufruct in Thailand

Foreigners being forbidden to own land in Thailand are finding ways and means to be able to access and possess land legally. The most common mode of possession and control used is undertaking a lease agreement. However, there is another mode although not as popular but equally efficient. This option is undertaking a Usufruct Agreement.

An immovable property may be subjected to a usufruct by virtue of which another person is entitled to the possession, use, and enjoyment of the property. In a Usufruct Agreement, the parties involved are the owner of the land, called the naked owner because he is stripped of his right over the property except the disposition thereof and the party granted to utilize the property, called the usufructuary.

To create a real right on the interest over the property it is mandated to be registered at the relevant Land Office. By registering the usufruct agreement the public is notified of the usufruct burden on the land. Therefore it is enforceable against any third parties interested to interfere in the possession and control over the subject land such as a prospective buyer. Upon registration of the usufruct at the relevant land department, the right of the usufruct is incorporated in the Title Deed. If the property is to be subsequently sold, the buyer has to be ready to respect the usufruct attached to the property.

The basic feature of usufructs is that the usufructuary has the right to enjoy, use and possess the land. He is essentially acting like the owner but without the right to sell the same. He has the obligation to take good care of the property as if it is his own. He shall be made liable for the destruction or depreciation in value of the property unless he proves that the damage was not caused by him. However, he is not obliged to recompense for the depreciation of the property caused by the normal wear and tear of the property. It is the obligation of the usufructuary within the duration of the usufruct to shoulder the expenses incurred for the management of the property including the payment of taxes and government duties as well as the interest payable on debts charged upon it.

Another essential characteristic of a usufruct is that unless otherwise provided by the parties, the usufructuary may transfer his rights over the land to a third party. This means that the usufructuary has the right to lease the property further within the period the usufruct is enforced. However, the naked owner has the right to object to any unlawful or unreasonable use of the property. After the expiration of the term of the usufruct, the property is reverted back the owner.

Bear in mind however that not all land in Thailand can be subjected to a usufruct. This will depend on the kind of Title Deed the land is classified. This is why an interested party must consult a lawyer before agreeing to engage into this kind of agreement. Other than that contracts such as this are drafted according to the personal circumstances of the parties involved. The rights of the parties must be duly recognized and upheld in the contract.


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Category: Condominium, Land, Property, Villa

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