Usufruct in Thailand

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Usufruct
What is a Usufruct?

A usufruct is a legal right given to a person or party called the usufructuary.  It is an ownership right to use, enjoy and manage someone else’s immovable property. This comes with the advantage of deriving income or benefit from it as long as the property is not in any way damaged or altered.

Basically it is a right that allows the usufructuary to live on the land and his/her name registered on the Title Deed (Chanote).

The right of usufruct is only valid and enforceable after completing the registration with the Land Department.  Such registration makes the public aware of the recorded burden on the property. This is therefore enforceable against any third-party such as a successor of the property.

 

For how long can one grant a usufruct?

It is usually for a 30 year period or for the lifetime of the usufructuary.  If time has not been fixed, it is presumed that the usufruct is for the life of the usufructuary.

 

Who shall be responsible for the maintenance and monetary obligations of the property?

The usufructuary shall, during the usufruct period, bear expenses for the property management, ordinary maintenance and petty repairs. They shall also be responsible to pay taxes and duties, and interests payable on any debts charged upon it.

If major repairs are necessary to keep the property, the usufructuary must immediately inform the owner. He need to ask permission to carry out the necessary repairs. In case of default by the owner, the usufructuary may have the work carried out at the owner’s expense.

The owner must bear all extraordinary expenses, but in order to meet these, he may realize part of the property unless the usufructuary is willing to advance the necessary funds without charging interest.

 

Can a usufructuary sell or lease the property?

A usufructuary cannot sell the property but he can transfer his rights on the property to a third-party with up to 30-year lease.

 

Can I inherit a right of usufruct?

You cannot inherit usufructs.  Its right and benefit dies with the usufructuary.

 

What happens when the Usufruct Agreement comes to an end?

When it comes to an end, the usufructuary must return the property to the owner, replacing anything which he has wrongfully consumed.  The usufructuary is liable for the destruction or depreciation in value of the property, unless he proves that he did not cause the damage by his fault. He has no obligation to give compensation for value depreciation because of reasonable use.

 

What are the benefits of a usufruct?

For foreigners who cannot own land directly, the benefit of a usufruct is that the Thailand owner will find it more difficult to sell or register mortgage on the land with the usufruct. The usual buyer would ask the owner to terminate the usufruct before buying such land.