Usufructs in Thailand

Usufructs in Thailand. A usufruct (in Thai: สิทธิเก็บกิน — sidhi-kep-kin) is a statutory real right that gives a person (the usufructuary) the legal power to possess, use and enjoy the “fruits” of an immovable property owned by someone else. In practical terms a usufruct allows the usufructuary to live in, operate, rent out, or otherwise take economic benefit from land or a building while legal ownership remains with the registered owner. Usufructs are governed by the Civil and Commercial Code (Sections 1417–1428) and — unlike purely contractual leases — are real rights that can bind transferees once properly registered.

Legal nature and core characteristics

Under Thai law a usufruct is a right in rem: it runs with the land and normally benefits successive holders of the dominant estate until it expires. The usufructuary has the right of possession, use, management and enjoyment (including the right to receive income such as rent), subject to duties of care and limits set by the grant. Typical duties include maintaining the property and returning it in no worse condition than reasonable wear and tear, and not committing acts that permanently change the substance of the property unless the agreement allows it. Because it is a real right, registration at the Land Department is crucial to protect the usufructuary against third-party purchasers.

How a usufruct is created

A usufruct can be created in several ways:

• Express agreement (deed) between the owner and the usufructuary, drafted, signed and submitted for registration at the local Land Office — this is the most common method.

• By will or testamentary disposition, where the owner grants a usufruct to someone in a testament.

• By operation of law or judicial decision, though this is less common in routine property planning.
  Because the right affects title, the Land Department registration process is the practical step that converts a private agreement into a public, enforceable real right. Unregistered usufructs are legally possible but are weak against bona fide third-party purchasers who rely on title.

Duration, limitation and termination

Statute and practice recognize two common temporal forms:

• For life — the usufructuary holds the right until his/her death.

• For a fixed term — commonly up to 30 years (commercial exceptions can vary), which in many cases matches practical limits used for long-term occupation arrangements. If the usufruct is for a fixed term, the start and end dates should be expressly set in the deed. On termination (expiry, death of the usufructuary, release, merger of ownership and usufruct in the same person, or abandonment) the right ends and full possession reverts to the owner.

Usufruct vs. lease vs. right of habitation — key differences

Although superficially similar to a lease or a right of habitation, usufructs differ in legal quality and practical effects:

• Nature of right: a lease is a contractual right to use for a period (personal right), whereas a usufruct is a real right enforceable against third parties once registered.

• Income rights: a usufructuary generally has the right to receive fruits (e.g., rental income) of the property unless the deed restricts it; a lessee usually needs express permission to sublet.

• Succession: usufructs granted for life typically end at death and are not inheritable by the usufructuary’s heirs (unless the grant expressly anticipates transmitability, and then subject to statutory rules); leases may include transmission provisions per contract.

• Registration and priority: usufructs are registrable at the Land Office; registration gives public notice and typically superior protection compared with a mere lease contract.

Practical uses — why people (including foreigners) use usufructs

• Long-term occupation without full title: foreign individuals who cannot own land may secure a long-term, robust right to occupy and use land or a house by registering a usufruct while title remains with a Thai owner. This is a common structure for retirement homes, family arrangements, or private residences.

• Income and operating rights: developers, investors or operators may use usufructs to obtain rental income or operate a project without transferring ownership.

• Estate planning: owners may grant a lifetime usufruct to a spouse or family member while preserving eventual reversion to heirs.
  Because Thai land law restricts freehold foreign ownership, registered usufructs are often considered alongside leasehold and superficies as legitimate tenure options — but they must be used carefully to avoid being treated as a circumvention of foreign-ownership rules.

Registration, formality and documentation

A valid and enforceable usufruct is typically created by an executed deed and then registered at the Land Office. Required documents commonly include: the original title deed, identification documents of parties, a properly executed deed in Thai (or bilingual with Thai prevailing), cadastral/survey plan if necessary, and payment of registration fees. The Land Department will record the usufruct on the title so any subsequent purchaser sees the burden. Legal practitioners strongly recommend specific, surveyed plans and clear permitted-use clauses to avoid future boundary or intensity-of-use disputes.

Rights, obligations and maintenance

The usufructuary may possess and use the property, collect its fruits, and manage it — but the usufructuary must exercise reasonable care. Ordinary repairs are typically the usufructuary’s responsibility; major structural repairs or acts that alter the property’s substance usually require consent or compensation terms in the deed. If the usufruct causes damage beyond ordinary use, the owner may claim compensation. Many deeds allocate maintenance obligations and a cost-sharing regime to reduce later disputes.

Common pitfalls & risk management

• Failure to register: an unregistered usufruct is vulnerable against bona fide purchasers. Always register.

• Overbroad drafting: vague use descriptions (e.g., “use as wished”) invite conflict; precise permitted uses, limitations on subletting, and maintenance rules reduce litigation.

• Conflict with foreign-ownership rules: structuring must avoid impermissible attempts to circumvent the foreign land ownership ban; seek specialist advice when non-Thai parties are involved.

• Tax and local charges: rental income and property taxes remain obligations; identify who pays which levy in the deed.

• Financing & lender reluctance: many lenders prefer registered mortgages over usufructs; if financing is required, confirm lender acceptance in advance.

Practical drafting checklist (must-have items)

1. Explicit start and end date (or clear life-term wording).

2. Precise description of property (title number and surveyed plan).

3. Permitted uses (residential, commercial, sublease rights).

4. Maintenance and repair allocation.

5. Compensation formula for permanent alterations or improvements.

6. Registration confirmation and steps for land-office submission.

7. Dispute resolution clause and governing law.
   Including these items on the face of the deed removes ambiguity and strengthens enforceability.

Conclusion

A usufruct is a powerful, statutory device in Thailand that grants possession, use and income rights without transferring title. When correctly drafted, notarized and registered at the Land Department — with explicit operational, maintenance and termination rules — it provides secure tenure for life or long fixed terms and useful options for foreigners and Thai owners alike. Because of the legal and policy constraints around foreign land ownership, and because registration and drafting detail determine real-world enforceability, consult an experienced Thai conveyancing lawyer and surveyor to prepare, register, and vet any usufruct arrangement.