Rights of usufruct is a property right that origins from Roman Law and is still used in countries part of the Civil Law family, including Thailand. In common law countries it would be called a life interest in a real estate property or life estate. In Germany usufruct is called Nießbrauch, in France it's called usufruit and in the Netherlands it's called vruchtgebruik.
Usufruct right in Thailand is governed by the sections 1417 to 1428 of the Thailand Civil and Commercial Code and described as an real estate property right whereby the owner of an immovable property (land, land and house or condominium) grants to another person for a limited period of time the right of possession, use and enjoyment, management and benefits the property may produce without destroying, damaging, or diminishing the property.
Usufruct agreement contract law explained:
Foreign and Thai nationals can obtain the right of usufruct by agreement with the owner of an immovable property. The contract for usufruct is the legal document that states and explains a formal agreement between the owner and the usufructuary (the person granted the right of usufruct). The principle of the right of usufruct is that it transfers the rights of possession, use, enjoyment and management of an immovable property from the owner to the usufructuary. The usufructuary can't sell or consume the property and must take as much care of the property as a person of ordinary prudence would take of his own property. The right of usufruct is not transferable and will in any case end on the death of the usufructuary (section1418). The usufructuary is allowed to transfer the exercise of his right under the usufruct to another person (section 1422), contrary to for example the right of habitation (the person granted a right of habitation can't transfer the exercise of his rights).
The right of usufruct can be created for a period of time or for the life of a person or persons. The right of usufruct can't be established for a period exceeding the life of a natural person or persons (it can't be an unborn child). If the right of usufruct is granted to a juristic person the period can't exceed 30 years. If a usufruct is created for a period of time the usufruct also depends on the life of the person (or persons) granted the right of usufruct. If the owner of a property grants to B the right of usufruct for a period of 30 years and B dies after 20 years the usufruct will be terminated after 20 years and the property will retrun to the owner. The right of usufruct distinguishes itself in this matter from for example the right of supericies (which is an inheritable right if registered for a period of time).
 Unless restricted in the contract granting the right of usufruct the usufructuary is allowed to transfer the exercise of his right to a third person, however, not the actual right of usufruct. The usufruct will in any case (by law) be terminated with the death of the person or persons granted the right of usufruct. |
The Civil and Commercial Code sections 1417 to 1428 explains the right and responsibilities of the persons granted the right of usufruct.
The usufructuary is allowed to manage the property and has in this matter the same rights as the owner of the property, which includes renting out the property without the consent of the real owner. This includes registering the contract for hire exceeding 3 years with the land department. In case of a foreign national as the usufructuary most land offices in Thailand will refuse the registration of the contract for hire as they argue that foreigners are not allowed to own or manage land in Thailand under the Land Code Act and can also not obtain this right under a usufruct. The land offices make in this case a distinction between a foreign or Thai national as the usufructuary. In practice foreigners, as the usufructuary, can only rent out the property under usufruct for periods not exceeding 3 years at the time (unless they are able to register the contract for hire exceeding 3 years at the land department). If the property under usufruct is rented out by the usufructuary the hire of property is not automatically terminated together with the end of the usufruct (Scj. 2297/2541).
Registration of a usufruct at the Land Department
The usufruct interest in the real property in Thailand must be recorded in the official land registry of the local land office where the property is located. By registering the usufruct agreement the puiblic is put on notice of the recorded usufruct burden on the land and therefore is enforceable against any third parties such as a tranferreee owner. The right of usufruct is not complete unless registered with the Thailand land department. A usufruct can be granted with or without consideration, i.e. the exchane of value or money in return for the right of usufruct. Usufruct must be registered at the local land office and registration fees are 1% and 0,1% stamp duty over the total consideration, or if the usufruct is granted without the exchange of value (money) the registration will cost less than 100 THB per plot.
A right of usufruct is often used to protect a foreign spouse's interest in a property in Thailand that is registered in a Thai spouse's name as a personal property. The right of usufruct is based on an agreement and as an agreement between husband and wife entered into during marriage it may not offer a full protection in case of a divorce (section 1469 Civil and Commercial Code), but in case of a marriage it is the only suitable right under Thai law that offers protection.
| Professional English-Thai usufruct contract drafted by an experienced licensed multi language law firm |
5,800 THB |
----- previous page ----- |
Usufruct start
