Land/house ownership problem solved?

[Hezze]

Trying to read up on Usufruct agreements in Thailand. Looks pretty good, I think. Don´t know why I´ve never heard of this before. Lived in Phuket 8 years until last years move to HH. Lease-hold, setting up a company sounds very troublesome and costly.
Just need to know the wife can´t kick me out of my house should things turn bad in our marriage. Of course she says she would never do that (yeah right!).

[TypicallyTropical]

Just need to know the wife can´t kick me out of my house should things turn bad in our marriage. Of course she says she would never do that (yeah right!).

You will be the first one to go!

[Dr Mike]

Wht is USUFRUCT?

[Hezze]

Usufruct: I don´t own the land/house but have the right to possess, use and manage the land and house as long as I live. I can ask my wife to leave. She can sell it but the new owner will still have to respect my right as per the agreement wich means no one would buy it.

[Super Joe]

Trying to read up on Usufruct agreements in Thailand. Looks pretty good, I think. Don´t know why I´ve never heard of this before. Lived in Phuket 8 years until last years move to HH. Lease-hold, setting up a company sounds very troublesome and costly.
Just need to know the wife can´t kick me out of my house should things turn bad in our marriage. Of course she says she would never do that (yeah right!).

Wht is USUFRUCT?

You may well have read this already Hezze, but may help those not so familiar with Usufruct's. Re: spouse kicking us out, it's covered in item no.6 under 'myths and facts'...
Link to... 'Everything you wanted to know about Usufructs in Thailand'
The English word usufruct derives from the Latin expression usus et fructus, meaning "use and enjoyment", cognate to English "use and fruits". Usufruct is the legal right to use and derive profit or benefit from property that belongs to another person, persons may only acquire the usufruct of the property, not legal land ownership.

Usufruct's have been around for several hundred years apparently, and used in certain U.S. States, plus certain Civil Law countries like France, Switzerland, Spain, Germany for example, and is less known to English speaking countries with 'Common Law'. It's got a specific section within Thai law soconsitutes what's known as property 'real rights', as opposed to a contractual right between yourself and a.n.other, and your personal (farang) name gets registered on the land title at the land office. Property 'real rights' follow the property title from owner to new owner, irrespective of a sale, death and inheritence etc. All new owners of the property are bound under the law to honour your right of lifetime use of the property.

It's got certain limitations though so may suit one individual whereas a land lease may suit a.n.other, for example it may be difficult to sell it on if things were not amicable with the landowning spouse. But the big positive is that has made them popular in the last few years is it's lifetime rights, here's an extract from Thai Civil and Commercial Codes (law of the land)...
TITLE VII - USUFRUCT
Section 1418: A usufruct may be created either for a period of time or for the life of the usufructuary. If no time has been fixed, it is presumed that the usufruct is for the life of the usufructuary.




I'd look at 'Right of Superficies' too as I think it's better because apart from the same lifetime rights, it's inheritable by your heirs, Usufruct rights aren't. Also it's specifically about the land owner separating rights to anything constructed on their land, from their rights over the land. So the foreigner can register ownership rights to the house in their own name at the land office, a stronger arrangement in relation to divorce imo. Here's part of the law on Superficies...
TITLE VI - SUPERFICIES
Section 1410: The owner of a piece of land may create a right of superficies in favour of another person by giving him the right to own, upon or under the land, buildings, structures or plantations.
Section 1411: Unless otherwise provided in the act creating it, the right of superficies is transferable and transmissible by way of inheritance.
Section 1412: A right of superficies may be created either for a period of time or for life of the owner of the land or the superficiary.

SJ

[JimmyGreaves]

Anyone gone the Superficies root. Was gonna get it setup a quite few years ago but the local lawyers where sceptical when I showed them what I had read.

[sjpthsuk]

I was going down the Lease with Superficies route on my house, until the Constructor screwed up by registering both Land and House at same time. Originally they had not split the site into lots so when they did that, they registered both at same time - my lawyer from Bangkok advised that it was not advisable to go down that route then, and suggested the 'Usufruct' route instead.
This was done with my sister-in-law (brothers thai wife) as i was not married at time, but we recently changed the Usufruct into my wifes name at the Land Office, but it cost me the taxes on the property to do it. This was done because s-i-l and wife always had issues when the s-i-l came round asking the wife if she was looking after her property good (FFS)....

When my sons are over 21 we are considering putting into their names so it lasts longer than me - but will wait and see.

[Nereus]

..................... but we recently changed the Usufruct into my wifes name at the Land Office, but it cost me the taxes on the property to do it.

When you say "taxes", can you maybe expand on this a bit? What and at what rate were the taxes calculated on? What exactly does the Land Dept. require on paper to register a Usufruct?
Is it a document drawn up similar to a lease, or is there a standard form that they use?

On the link that SJ has quoted the Lawyers seem to think that the Land Dept MAY not register a Usufruct if it is given "free", but it may depend on if it is given by your wife, or somebody else.
If it is given free there should only be "filing" charges of maybe 100 Baht.

SJ, have you have you had anything to do with this method? I am going to cancel the lease agreement with my daughter ( see previous long thread about this), and although I have a separate written contract with her, I would like to have a bit more protection.

[sjpthsuk]

When i say "taxes" was based on the purchase price, because we could not do a straight transfer from S-i-L to wife. It was roughly about 7.8% of the purchase price broken down into i) 2.5% for the Seller’s income tax, ii) 2% for the transfer fees, and iii) 3.3% for the specific business tax.
As the farang in this equation, i left the S-i-L, my wife and Lawyer go into the Land Office and do what was required, only having to appear inside once to put my signature on the document.
Initially, we were advised by the lawyer that due to previous experience on similar matters, it would be done in two steps, transfer from S-i-L to wife, then after three months go back and do the Usufruct between myself/wife, however on the day everything happened in a oner.
Was i happy paying the taxes, no, but at end of day i've got a better piece of mind now.

[Randy Cornhole]

I had 'Superficies root' once. A visit to the clinic soon cleared it up though...

Sorry I'll get my coat...

[Super Joe]

Anyone gone the Superficies root. Was gonna get it setup a quite few years ago but the local lawyers where sceptical when I showed them what I had read.

No, and don't know anyone in Hua Hin that has to be honest. Although read about farangs using them in other parts of Thailand. What in particular was lawyer sceptical about JG, as when I brought it up with one of the largest firms in town they sort of dismissed it on the basis that their firm 'prefer' to use Usufructs, but never mentioned anything specific for or against Superficies. It came across that they hadn't tried, and didn't really want to which was dissapointing. But as I just threw it in while dealing with something different I didn't push it.

I've read a few accounts from seemingly genuine (non-property) posters on other forums, usually from outside the big resorts, saying that when they went to register a Usufruct the official told them 'no can do', but when they went back with a respected lawyer who articulated the law better than the wife had previously done, or discussed it with the boss, it was allowed through. No doubt this may be the case with these in Hua Hin if they're a new concept in there!? You can by all account register a 30 year lease, alongside a Usufruct or Right of Superficies, as both give you different rights that the other does not, obviously more fees/taxes associated with it.

As I have a kid now I think the best protection for him to inherit the house should I die while he's a minor is with a Right of Superficies, because the following dictates that the rights carry forward to any successors, and I guess this is part of the rights because it's whole purpose is for someone owning a building on someone else's land, as opposed to just using someone else's building ala usufruct...
Section 1411: Unless otherwise provided in the act creating it, right of superficies is transferable & transmissible by way of inheritance.
Compared to a Usufruct where this inheritable right is not provided under the law, so our rights are extinguished upon our death... unless we have an additional agreement in place for our heirs (see below). I don't say this because I don't trust my wife not to drink, gamble or fornicate it away, I trust her over myself every day of the week on this front, but because of any ulterior motives of whoever inherits should we both pass away.


Additional agreement in place for our heirs - according to the laws with both Usufruct & Superficies you can legally issue a lease to your child, farang family member or whoever that runs concurrently from day 1, then if you die after say 10 years, your heir has 20 years left to use the property before land owner (often developer or wife) can get control over it. You obviously need to put this in place from day 1, any later and the land owner is likely not to agree...
Section 1422: Unless otherwise provided in creating the usufruct, the usufructuary may transfer the exercise of his right to a third person.
Section 1411: Unless otherwise provided in the act creating it, the right of superficies is transferable
Supreme Court Judgment No. 2297/2541 - The owner of the land and house has registered the right of usufruct on the land. After registration of the lease the usufructuary has made a 30 year lease agreement in writing and registered with the competent official. Although, during the lease term the usufructuary died and the usufruct is extinguished, the death does not to affect the right of the third party and the registered lease agreement is not to be terminated.

Another function of having a 3rd party agreement in place (ie: will to a child, lease to pet hamster etc) is it allegedly nullifies the right of a spouse to seek court order terminate any agreement made during marriage in the event of divorce...
Section 1469: – Agreements made during marriage can be cancelled at the request of either party, unless it affects a third party.

Ofcourse all the above could go out the window if the Land Office boss says... 'stick your laws up your Arsenal and 'koff out my office'

SJ

[Super Joe]

When you say "taxes", can you maybe expand on this a bit? What and at what rate were the taxes calculated on? What exactly does the Land Dept. require on paper to register a Usufruct?
Is it a document drawn up similar to a lease, or is there a standard form that they use?

SJ, have you have you had anything to do with this method? I am going to cancel the lease agreement with my daughter ( see previous long thread about this), and although I have a separate written contract with her, I would like to have a bit more protection.

When i say "taxes" was based on the purchase price, because we could not do a straight transfer from S-i-L to wife. It was roughly about 7.8% of the purchase price broken down into i) 2.5% for the Seller’s income tax, ii) 2% for the transfer fees, and iii) 3.3% for the specific business tax.

If I'm reading it correctly, sjpthsuk's transaction was due the full taxes because effectively it was a property transfer, ie: ownership of land & house from SIL to his wife. If you're just looking to cancel a lease and register a Usufruct with the same title holder, then I know from experience the cancelling of the lease part inccurs just a 1,000 Baht 'fee', for what I'm not sure. When you register the new Usufruct it will depend if they allow you to register it with no usage value/consideration attached to it or not. The one's we've done have always been to property buyers so there was no real way of making out the usage was for free, the value is always the same as out land selling value so in the sales agreements from day 1.

If anyone is able to register one without consideration it should be a situation within family like yours, but it may be that HH do not allow it full stop for reasons best known to them. For example Usufructs are meant to be 75 or 100 Baht, but HH has always charged 10k to my knowledge!!

A local lawyer will know, and should tell you on an initial (free) consulation good luck.

SJ

[Hezze]

Good info SJ
"Section 1469: – Agreements made during marriage can be cancelled at the request of either party, unless it affects a third party."

Maybe I should get a divorce, set up the usufruct and marry again? Not sure she would go for that though. And once the ball and chain is off maybe I won´t go back.

This is a little bit troublesome but I think one of my kids will have the freehold-title rights as soon as they are old enough and therefore would not need the inheritance clause. Until then a 10 year lease to my son would do the trick. I am not plannig on a dirt-nap anytime soon (34 y o).

[Nereus]

Thanks SJ and sjpthsuk.

My Daughter has already asked the Land Dept the "fee" to cancel the lease, and she was told
85 Baht!

I am still not clear on just what form the Usufruct takes. Is it drawn up similar to a lease or not?
I will try and get my Daughter to find out before we proceed with cancelling the lease, because I am not prepared to pay them yet more money, or a Lawyer either for that matter.

I believe a Usufruct in Thai is: "Sidthi-Kep-Kin", or that is what it sounds like, if that is of any use to anyone.

[barrys]

Thanks SJ and sjpthsuk.
I believe a Usufruct in Thai is: "Sidthi-Kep-Kin", or that is what it sounds like, if that is of any use to anyone.

This is how we did it in Pranburi - with my gf granting me the usufruct with no consideration, i.e. it doesn't strictly have to be family, as we're not married.
It would appear, though, that the individual land offices have powers of discretion and I've heard that HH is particularly difficult in this respect.

The sidthi kep kin at Pranburi cost us just 50 baht.