A usufruct in Thailand is a property right that many foreigners are likely to be interested in. It gives them long term rights over property that are more secure than most other types.
Here we take a closer look at what Thailand usufruct agreement, and what right the usufruct gives to the person that holds it.
A usufruct is an agreement that grants temporary ownership of a property to another person. The usufructuary (the person granted the rights), gets to use the property as they please. They also get to rent the property and profit from any rent made. This is all on the condition that the property is not altered or damaged.
In many ways, a usufruct is very much like a leasehold, in that the usufructuary is granted temporary permission to “own” the land. One of the main differences is that a usufruct can be granted until the end of the life of the usufructuary (or for a set period of time).
For real estate investors, it is a secure opportunity to take advantage of the Thai property market. A Thai usufruct contract will last for their lifetime (unless instructed otherwise), so there is no need to be concerned over the duration of the agreement expiring. This can give them more confidence when going ahead with a property investment that they will not lose at some point in the future.
A usufruct agreement in Thailand for foreigners has numerous benefits for the usufructuary.
A Thailand usufruct agreement will only become valid once it has been registered on the deed by the land office. Everything will be completed in Thai, so you may need a Thai to accompany you. You could otherwise grant power of attorney to a Thai lawyer to do it for you. Do not be surprised if you are asked for some extra money to move things along faster, which is quite standard practice.
It is best to be sure the usufruct agreement is in a format the specific land office you are using will accept, although this is something your lawyer should already be aware of. Registration fees are usually minimal at 1.1%.
For a usufruct to be granted on a property, the property owner must have full legal rights to it. The property itself will also need to meet certain criteria, such as having road access.
A Thai usufruct contract gives you all the right to the land, which cannot be withdrawn unless by a court under certain circumstances.
In short, your spouse will not be able to cancel it, which is a concern many property investors might have. The agreement can only be cancelled with your consent, or by a court of law.
If you do divorce your spouse, then a court may cancel a usufruct as the properties of the husband and wife are divided. Still, you will likely get your fair share rather than losing out altogether.
This is a matter that should always be discussed with a lawyer before investing in property in Thailand.