Getting full control of land through USUFRUCT

[Mike Judd]

My Partner is a reasonably intelligent Thai, and she wouldn't have a bar of buying any land that was not Channote , promises galore that to get it changed later would not be a problem, did not impress her at all." No Channote, No buy" !
'

[pklongball]

Same same here in Ban Chang, Rayong

Land office boss is in bed with several farang friendly lawyers and flatly refuses to do a Usufruct as it is much more lucrative to do leases for the boss and the land office and the lawyers

I do not know of anyone that has gotten a Usufruct

[Shastadad]

Tried recently (via my lawyer a DMA Consultants) to get a usufruct at the Banglamung Land Office. This was flatly refused, they're only prepared to issue leases. When I queried this with my lawyer, she said that although usufructs are legal here, it's up to the boss at the land office. I suspect it's because it's more lucrative to issue leases, 10,000 THB for the lawyer and 25,000 THB for the land office, which was the price I was quoted for the lease. I'd be interested to know if anyone has succeeded in getting a usufruct or similar from Banglamung in the last few months. I really begrudge paying a fortune to lease land which I've already just bought, even if it is in the wife's name.

Are you sure that the refusal to issue a usufruct at the Banglamung Land Office was because of the preference for leases or was it because a usufruct (or any written agreement) between spouses is useless since contracts entered into between married couples are not valid since the Thai community property laws trumps the Commercial code ?

Your lawyer should have known that !

[geordie]

even if it is in the wife's name.

Are you sure that the refusal to issue a usufruct at the Banglamung Land Office was because of the preference for leases or was it because a usufruct (or any written agreement) between spouses is useless since contracts entered into between married couples are not valid since the Thai community property laws trumps the Commercial code ?

Your lawyer should have known that !

I understoood it as the wife cannot issue a userfruct because you could be forcing her into it for financial reasons it had to be issued by the previous owner who them singned over the ownership after the userfruct was issued ?? not 100% on that but i am sure i read it somewhere on the forum

[Shastadad]

Many land offices will require that a farang husband sign a statement when a Thai wife purchases property that he has no claim whatsoever to the property and that she is not acting as his nominee for the purchase

But once again, when the marriage goes tits up, community property ( via the divorce judgment ) will dictate that the property either be sold and the proceeds divided 50 / 50 or the wife must purchase the husbands share, since once again, even the statement required by the Land Office does not supersede community property

[Shastadad]

Here is a full explanation of Usufruct, note last paragraph

Property Law: Right of Usufruct in Thailand
Usufruct grants the legal right to use and control another man's real estate property

The contract or memorandum of usufruct (สัญญาให้สิทธิเก็บกิน) is the legal document that states and confirms the formal agreement between the owner and the usufructuary (the person granted the right of usufruct). Usufruct transfers possession, use and enjoyment of an immovable property from the owner to the usufructuary. Usufruct can only be registered over titled immovable property and is established by agreement with the owner and registration at the local land office.
FACTS ABOUT USUFRUCT IN THAILAND

* The usufructuary does not obtain the title to the property, nor can he sell or consume the property;
* The usufructuary must take as much care of the property as a person of ordinary prudence would take of his own property;
* The usufructuary is responsible for ordinary maintenance and pretty repairs and liable for the destruction or depreciation in value of the property, unless he proves that the damage was not caused by his fault;
* The usufructuary is bound to keep the substance of the property unaltered (section 1424), therefore if the property is raw land to be usud for building a right of superficies and/or land lease would be more suitable;
* Ones established the right of usufruct cannot be transferred from one person to another, but the usufructuary is allowed (unless restricted in the contract) to transfer the exercise of his right under the usufruct to another person, contrary to for example the right of habitation;
* The usufruct is not transferable by inheritance. Wheteher given for a period of time or for the life of a person, the usufruct will in any case (by law) be terminated at death of the person or persons granted the right of usufruct, contrary to for example a right of superficies;
* Usufruct in Thailand is governed by the sections 1417 to 1428 Civil and Commercial Code.

Term of the usufruct
Placing a signature on mark in usufruct agreement

The right of usufruct can be created for a period of time up to 30 years or for the life of a person or persons. If the right of usufruct is granted to a juristic person the period can't exceed 30 years. If a usufruct is created for a period of time the usufruct remains depending on the life of the person (or persons) granted the right of usufruct. If the owner of a property grants to B the right of usufruct for a period of 30 years and B dies after 20 years the usufruct will be terminated after 20 years and the property will return to the owner. The right of usufruct distinguishes itself in this matter from for example the right of supericies (which is an inheritable right if registered for a period of time).
Renting out the property under usufruct

Unless restricted in the contract of usufruct the usufructuary is allowed to rent out the property without the consent of the real owner and keep the rent. Usufruct could include the power to register the contract for hire exceeding 3 years with the land department. In case of a foreign national as the usufructuary the land offices in Thailand will however not allow registration of the contract as foreigners are not allowed to manage land under the Thailand Land Code Act and can also not obtain this right under a usufruct. The land offices make in this case a distinction between a foreign or Thai national as the usufructuary. Therefore, in practice, a foreign usufructuary can only rent out the property under usufruct for periods not exceeding 3 years at the time.

If a valid rental or lease has been established the hire of property is not automatically terminated together with the end of the usufruct (supreme court ruling 2297/2541Translation scj. 2297/2541: The plaintiff who is the owner of the land and townhouse has registered the right of usufruct on the land to Tor. After registration Tor has entered into a 30 year lease with the defendant. The lease agreement was made in writing and registered with the competent official, therefore the lease agreement is enforceable and binding upon the plaintiff who is the owner of the land. Although during the lease term Tor died and the usufruct was extinguished according to section 1418 paragraph 4 of the Civil Code, the death of Tor does not to affect the right of the defendant who is the third party and the registered lease agreement is not also terminated together with the usufruct.).
Registration of the usufruct

A usufruct can be granted with or without consideration. Usufruct must be registered at the local land office and registration fees are 1% and 0,1% stamp duty over the total consideration, or if the usufruct is granted without the exchange of value (money) the registration will cost less than 100 THB per plot.
Practical use

A right of usufruct is often used to protect a foreign spouse's interest in a property in Thailand that is registered in a Thai spouse's name as a personal property. The right of usufruct is based on an agreement and as an agreement between husband and wife entered into during marriage it may not offer a full protection in case of a divorce (section 1469 Civil and Commercial Code), but in case of a marriage it is the only suitable right under Thai law that offers protection.

Source: http://www.thailandlawonline.com/legal- ... iland.html

[jazzman]

Just to add some personal experience: my usufruct cost a fee of ฿75.00. My lawyer gave me (free of charge) a usufruct contract between me and the landowner in case it was asked for by the land office clerk. It was not required because the land owner and I went together to the land office.
Note: Some lawyers will offer this service for up to ฿25,000.00. Needless to say, they don't get many clients for it.
I know of many usufructs and I have never personally heard of one being refused by a land office - but I don't live in a traditional farang enclave.

[otis-a]

re: commercial code trumps - tits up
umm
look b4 u leap!
Prenups:
1. Must be signed b4 marriage + registered with & @ same time as marriage
2. Cannot be later altered
good news:
*prenupt can declare no common property -what is yours stays yours - what is her's stays her's. No so good if u r farang gold digger marrying a hiso thai.
*just track funds source for any major items or purchases desired to stay non-common properties & title to approprate party using correct legal instruments.
+ consult ligit thai legal council for details
-
forum question:
will a usafruct entitle privilaged to a yellow or blue book for house constructed on such property?

[Shastadad]

forum question:
will a usafruct entitle privilaged to a yellow or blue book for house constructed on such property?

Depends upon your amphur, since the usufruct is annotated on the back of the chanote you should be able to get a yellow book for the house but as a non Thai, you will never get your name in a blue book

Same situation with some people claiming that they can get a yellow book as long as they can prove that they "own" the house built on someone else's land, really depends upon the local amphur, so unfortunately in Thailand no one size fits all

[saorsa]

If I get a usufruct registered on the Chanote for the land that is in my wife's name, does that stop a bank from loaning money to build the house using the land as collateral? I'm thinking if it does, I will be better to get the mortgage and then register the usufruct later.

[geordie]

If I get a usufruct registered on the Chanote for the land that is in my wife's name, does that stop a bank from loaning money to build the house using the land as collateral? I'm thinking if it does, I will be better to get the mortgage and then register the usufruct later.

That should put the cat among the pidgeons if the bank has loaned on the land i would imagine you will not be able to obtain a userfruct ?? if granted the bank would be unable to repo the land which is their collateral ? unless the loan is in your name !
But as the userfruct is a lease not ownership you have no collateral

[saorsa]

That should put the cat among the pidgeons if the bank has loaned on the land i would imagine you will not be able to obtain a userfruct ?? if granted the bank would be unable to repo the land which is their collateral ? unless the loan is in your name !
But as the userfruct is a lease not ownership you have no collateral

Yes, the bank would be in a strange position as loan would be in my wife's name, not mine, which is why I wondered if the usufruct would make the loan a non-starter. Maybe I have to do the build first and pay off the mortgage. I have ready 2 conflicting points of view on usufruct once the house is built (unless I am just misunderstanding). Side 1 says you could have to pay 1% of the value of the property to register the usufruct if a house is built on it. Side 2 says that you only have to pay 1% of any money paid to the party granting the usufruct. I may just be being thick though...won't be the first time!

[geordie]

If its going to be on a userfruct (land) i understand its a few baht to do re-read the thread Jazzman has written some good stuff But then you have the morgage problem even with a userfruct the bank is unlikely to morgage a property because of limitations caused by the lease both limiting the land and subsequent house ? it,s a lose lose situation the answer would be leave the land in girlfreinds name but that also gives her ownership of the house and leaves you maybe a little overexposed

[Roger Ramjet]

saorsa,
Loans are possible through Thai banks. My wife and I bought our townhouse through Siam Commercial Bank and they approved the loan within a week, however, as my wife works for a "farang" company in a senior executive position the loan had to be in her name with me as guarantor. The loan was classified as Non Commercial and went through one of their special departments, but the interest was the same as a home loan. We also purchased our first car through them at their urging and they stated it could be in either of our names, so we settled for my wife owning it and me registered as the driver.
I see no use for usufruct if you trust your wife.
Our new house has been paid for all in cash, along with our latest car, but Siam Commercial Bank who did the assessment on it at our request told us they would loan us 80% of their assessed value if we ever wanted to take out another loan. I have always found them to be totally professional and more than willing to work with their clients.
We also have savings with them now that is quite substantial and my wife has more platinum credit cards than I do.
Why not talk to one of their branch managers and see where the USUFRUCT issue stands with them as they hold the mortgage documents and did all the work at the Land Office.

[saorsa]

saorsa,
Loans are possible through Thai banks. My wife and I bought our townhouse through Siam Commercial Bank and they approved the loan within a week, however, as my wife works for a "farang" company in a senior executive position the loan had to be in her name with me as guarantor. The loan was classified as Non Commercial and went through one of their special departments, but the interest was the same as a home loan. We also purchased our first car through them at their urging and they stated it could be in either of our names, so we settled for my wife owning it and me registered as the driver.
I see no use for usufruct if you trust your wife.
Our new house has been paid for all in cash, along with our latest car, but Siam Commercial Bank who did the assessment on it at our request told us they would loan us 80% of their assessed value if we ever wanted to take out another loan. I have always found them to be totally professional and more than willing to work with their clients.
We also have savings with them now that is quite substantial and my wife has more platinum credit cards than I do.
Why not talk to one of their branch managers and see where the USUFRUCT issue stands with them as they hold the mortgage documents and did all the work at the Land Office.

Thanks Roger. I have no work permit as I work offshore, but KTB have still offered 50-60% loan for construction in my wife's name, but using me as a guarantor. My friend's sister works in another bank which I can't recall the name of, but she said that she can probably match what we were offered by KTB. We also checked out GSB, but they only offer 12,000b per m2 of built house and that won't work out as well for us. I have heard SCB are a nightmare for getting the paperwork done from a couple of friends who have arranged loans with them, so I thought to avoid them. I only want a 3yr mortgage anyway as that is the minimum time to pay off without penalties