Expat Legal Matters

Understanding Usufruct in Thailand: A Friendly Guide

If you’re navigating the world of property rights in Thailand, you might have come across the term “usufruct.” This legal concept can be quite beneficial, especially for foreigners looking to enjoy the use of land without owning it outright. Let’s break it down in a friendly and easy-to-understand way!

What is Usufruct?

In simple terms, usufruct is a legal right that allows someone to use and benefit from a property that they do not own. In Thailand, this is particularly relevant for foreigners, as the Land Code B.E. 2497 (Section 86) prohibits them from owning land directly. However, if you have a Thai spouse or partner, you can hold usufruct over their land, giving you the right to use it as if it were your own.

How to create a Usufruct agreement:

1. Written agreement between the (Thai) owner and the usufructuary (Expat)

2. Registration at the Land Department

   • Must be registered on the land title deed (Channote)

   • Not valid unless registered; oral agreements are unenforceable under Thai law

Key Points to Remember

While usufruct can be a great option, there are some important risks and legal limitations to keep in mind:

Non-Inheritable: The right to usufruct cannot be passed on to heirs upon death unless a new usufruct is created and registered.
Non-Transferable: You cannot assign your usufruct rights to someone else without the consent of the landowner.
Limited Duration for Companies: If a juristic person (like a company) holds usufruct, it can only last for a maximum of 30 years.
Potential Challenges: In mixed-nationality marriages, heirs may challenge the usufruct, leading to disputes.
Drafting Matters: If the usufruct agreement is poorly drafted, it may become unenforceable or lead to legal issues.
Best Practices for Drafting and Registering a Usufruct

To ensure your usufruct is valid and serves your needs, consider these best practices:

Define the Scope: Clearly state whether the usufruct is for personal residence or commercial use.
Include Leasing Rights: If you plan to lease the property, make sure this is included in the agreement.
Clarify Maintenance Obligations: Specify who is responsible for property maintenance.
Register in Person: Always register the usufruct at the local Land Office to make it official.
Provide a Property Map: If you’re only using part of the property, include a map or plan with your agreement.
Consider a Lease + Usufruct Structure: For more complex arrangements, combining a lease with a usufruct can be beneficial.

Usufruct Agreement in Thailand is a right under the Civil and Commercial Code that allows one person (the usufructuary) to use and benefit from another’s immovable property, usually land or a house, without acquiring ownership. The right is personal and non-transferable unless otherwise agreed, and it can be granted for a specified period or for the life of the usufructuary.

Conclusion

Usufruct in Thailand is a valuable right that allows you to enjoy the benefits of land use without ownership. It’s particularly useful for foreigners and families where land ownership might not be feasible. However, due to its non-transferable nature and the need for careful drafting and registration, it’s essential to approach this legal right with caution. Tailoring your usufruct to your specific needs and ensuring it complies with Thai law will help you avoid potential pitfalls and enjoy your property to the fullest!