Usufruct Agreements in Thailand

Usufruct Agreements in Thailand

Looking for a legal and safe way to have (almost) full property rights in Thailand?

A Usufruct agreement can give you the right to possess and enjoy a property fully legally without being the owner.

What is a Ususfruct?

A Usufruct is a real right, which means it is attached to a ‘thing’. It originates from Roa law and gives the Ususfructuary the right to use assets without owning them. Thailand has adapted this law: Usufruct contracts (สิทธิเก็บกิน) are governed by sections 1417 to 1428 of the CCCT. A Usufruct is a right granted by the owner(s) of the land/house in favor of a Usufructuary whereby this person has the right to possess, use and enjoy the benefits of an immovable property (section 1417 CCCT). The Usufructuary has the right to manage the property (sect 1414 CCCT). It can be on a piece of land, on a house or on both of them.

The holder of a Usufruct, known as “Usufructury”, has the right to use, possess and enjoy the property, as well as the right to receive profits from the fruits of the property. The Usufructuary could be a person or an entity (eg: a company).

In Civil Law, the owner who gives the Usufruct has nothing else than the ownership: He can’t use is possession although he is the legal owner. Although he could sell his property the new buyer must accept the Usufructuary if the Usufruct was legally registered. This will make a sale very difficult as nobody will be interested to buy a property that he or she can’t use.

Besides possession and enjoyment of the property, the Usufructuary has also the legal right to use and derive benefits from the property that belongs to another person, as long as the property is not damaged; this could mean rental income or other profits made with the property. If the Usufruct includes the land and not only a building, the Usufructuary can be the full owner of any buildings he constructs on this land.

Maximum length of a Usufruct contract

The Usufruct contract is not limited to 30 years. It can have a certain term or it will end with the death of the Usufructuary  (sect. 1418 CCCT). However, the rights on the land or house can be transferred to a third party via lease. This lease agreement will not end with the death of the Usufructuary. This is an ideal way to pass on rights to children or relatives even after death.

A Usufruct contract must be registered!

All Usufruct agreements must be registered to be valid by decision of the Supreme Court of Thailand. The name of the Usufructuary will be registered on the title deed in a similar way like if the property was leased. A buyer of the property has to respect this Usufruct when purchasing the land or house. Usufruct agreements can only be made on title deeds (Nor Sor Sam Gor or Chanote) without mortgages on it.

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