Usufruct in Thailand
By: Magna Carta Law Office
A usufruct is a legal right accorded to a person or party called the usufructuary. It is an ownership right to use, enjoy and manage someone else’s immovable property 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 is registered on the title deed or chanote acknowledging that right.
For foreigners who cannot own land directly, the benefit of a usufruct is that the Thai land 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.
The right of usufruct is only valid and enforceable after the registration with the land department has been completed. The registration of the usufruct shall make the public aware of the recorded usufruct burden on the property and is therefore enforceable against any third party such as a successor of the property. A usufruct is usually granted for a 30 year period or for the lifetime of the usufructuary. If no time has been fixed, it is presumed that the usufruct is for the life of the usufructuary. The usufructuary shall, for the duration of the usufruct, bear expenses for the management of the property, for ordinary maintenance and petty repairs, pay taxes and duties, and be responsible for interests payable on debts charged upon it. If major repairs are necessary for the preservation of the property, the usufructuary must immediately inform the owner thereof and ask permission for them to be carried out. In case of default by the owner, the usufructuary may have the work carried out at the owner’s expense. All extraordinary expenses must be borne by the owner, but in order to meet these or expenses coming under the foregoing section he may realize part of the property unless the usufructuary is willing to advance the necessary funds without charging interest.
A usufruct cannot be inherited. Its right and benefit dies with the usufructuary. 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. When usufruct 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 the damage was not caused by his fault. He is not bound to give compensation for depreciation in value caused by reasonable use.
