LAND AND PROPERTY IN THAILAND

Land and property in Thailand

How to protect your assets using a Usufruct, Leases, Superficies or Sap Ing Sith Agreement as a foreign national with Thailand Property Lawyers and the ILI Group of Lawyers.

Thai law under the Land Code Act B.E. 2497 (1954) prohibits foreigners owning land.

If you are planning to buy land and property in Thailand, you should be aware of the legal risks involved. As a foreign national, you cannot own land or property in Thailand in your own name, unless you have a special permit from the government. Therefore, you will have to register the land or property in the name of a Thai citizen, such as your partner, spouse or friend.

However, this means that you will not have any legal rights over the land and property in Thailand, and you could lose it if the Thai owner decides to sell, mortgage or transfer it to someone else without your permission or knowledge. This could happen if your relationship ends, or if the Thai owner faces financial or legal problems.

To avoid this situation, you should take some steps to protect your investment and secure your rights over the land and property in Thailand. There are several legal instruments that you can use, such as a Usufruct, Sap Ing Sith, a Lease or a Superficies Agreement. These agreements will allow you to use, occupy and benefit from the land or property in Thailand for a certain period of time, or even for your lifetime.

By using these agreements, you can prevent the Thai owner from selling, mortgaging or transferring the land and property in Thailand without your consent. You can also ensure that you can continue to live in your home and enjoy your assets even if your relationship changes. These agreements are relatively easy and inexpensive to set up, and they will give you peace of mind and security.

Therefore, it is highly recommended that you consult a lawyer and prepare one of these agreements before you buy land and property in Thailand. This way, you can protect your investment and avoid potential disputes and losses in the future.

Thailand Property Lawyers and the ILI Lawyers group were one of the first Law Firms in Thailand to protect clients’ assets by means of an Usufruct many years ago. Now it is the way forward for many. A Usufruct will allow you enjoyment of the land and its fruits for your lifetime. The Usufruct is registered on the property title(chanotte) at the Land Office for all to see.

USUFRUCT IN THAILAND

Protecting Land and Property in Thailand

A Usufruct is a legal concept that originates from Roman and Civil Law. It is a type of real right, meaning that it is attached to a thing, not a person. A Usufruct gives the holder, called the Usufructuary, the right to possess, use and enjoy the benefits of an immovable property, such as land or a house, that belongs to someone else, called the naked-owner. The Usufructuary can also manage the property and receive profits from its fruits, which can be natural (such as crops or animals) or legal (such as rent or interest). The Usufructuary must not damage or destroy the property, and must respect the rights of the naked-owner.

 

A Usufruct is regulated by sections 1417 to 1428 of the Civil and Commercial Code of Thailand (CCCT). It can be created by a contract, a will or a law. It can be granted for a fixed period of time, for the lifetime of the Usufructuary, or for the lifetime of a third person. It can be transferred to another person or entity, unless it is personal. It can be terminated by various causes, such as expiration, death, merger, destruction or abandonment.

 

A Usufruct is not a common concept in common law countries, where other types of rights over property exist, such as leases or easements. However, it is widely used in civil law countries, such as France, where it is called “usufruit”. In fact, Thai Civil Law was largely influenced by French Civil Law. (see “the work of codification in Siam” by Rene Guyon, 1919.)

 

LEASES IN THAILAND

Protecting Land and Property in Thailand

Leasing a property can offer you the same benefits as owning it for a certain period of time, and you can also pass it on to your heirs. However, unlike a Usufruct, a lease may incur some taxes.

A written lease agreement can be in Thai, English, or both languages. It is common to pay a two-month deposit in advance, but you can negotiate the terms with the landlord.

If your lease is for three years or longer, you need to register it with the Thai authorities according to the law. This is known as a hire of property and it is required by Clause 538 of the Thai Commercial and Civil Code.

 

To register your lease agreement, you have to go to the local Land Department and present a document in Thai. Usually, they will prepare their own document that contains the basic information of the lease, such as the names of the landlord and tenant, the duration, the price, and any other contacts.

 

The Land Department will not include any additional clauses that you may have agreed with the landlord. These clauses should be specified in your original contract with the landlord. For a short-term lease, most Thais use a standard contract form that you can get from any Land Department office, but it is only in Thai.

 

You can visit the Land Department website for more information: https://www.dol.go.th/Pages/en/interneteng.aspx

 

If you are already renting a property and want to extend your lease, you can renew it on a yearly basis. You can negotiate the price and payment with the landlord directly. Yearly leases are common for properties such as apartments, townhouses, and single detached homes.

 

Having a tailor made lease written in both English and Thai for up to thirty years is crucial in order to safeguard your position and rights. Having a tailor drafted document ensures clarity and more importantly makes your rights and needs clearly understood and enforceable.

Our experts have been drafting Commercial and Personal Lease agreements for 17 years so are well versed in what they should and should not include.

 

SUPERFICIES IN THAILAND

 

Protecting Land and Property in Thailand

Superficies is a legal term that originates from Civil Law and is adopted in the Commercial and Civil Code of Thailand (CCCT). It is a section in the book of property, between sections 1410 and 1416 CCCT. It is a real right, similar to the Usufruct, which means it is attached to an immovable property, a thing, and not a person. Therefore, the right of superficies remains even if the owner of the land changes, unless the contract between the parties terminates it.

 

The right of superficies allows the owner of a land to grant another person, either a Foreigner or a Thai national, also known as superficiary, the right to own buildings, structures and plantations on or under the land. (Section 1410). This right can be inherited by the heirs of the superficiary, unless otherwise agreed. (Section 1411). In other words, the owner of the land gives another person the right to OWN the structures on the land for up to 30 years, if it is a fixed period (section 1412 referring to section 1403 paragraph 3) OR for the lifetime of either the owner of the land or the superficiary. (Section 1412). Usually, the right of superficies is combined with a lease agreement on the land and both contracts have the same duration. And like any other contracts, renewals are possible.

 

The right of superficies must be registered at the land department to be valid. To register it, the owner of the land must bring her title deed to the land department. Both parties must sign and the name of the superficiary will be added in Thai on the back of the title deed.

 

Superficies can be given for free or for a fee. If there is a fee involved, there is a tax of about 1.1% to pay directly to the land department, for the whole agreement, on the day of the registration.

 

SAP ING SITH IN THAILAND

Protecting Land and Property in Thailand

It is a right to use an immovable property that can be established on land with a valid Channote (land title deed), buildings constructed on land with a Channote, or condominium units as defined in the Condominium Act. It can be registered for a period of up to 30 years and can be renewed for another 30 years. It must be made in writing and registered with the relevant land office, which will issue a Sap-Ing-Sith certificate.

DIFFERENCES FROM A LEASE

It is different from a regular leasehold right in several ways. For instance, It can be transferred to a third party without the owner’s consent, can be used as security for a mortgage (not registered), and is inheritable under statutory inheritance law. The holder can also make alterations or additions to the property without the owner’s consent, as long as they do not affect the structure or value of the property.

The holder has the duty to return the property in an “as is” condition at the end of the period unless otherwise agreed and is liable for the property like an owner. The holder also has to pay an annual fee of 0.1% of the appraised value of the property to the land office.

How can foreigners benefit from this right?

It can offer several benefits for foreigners who want to use land in Thailand without owning it. For example:

It can provide more security and flexibility than a leasehold right, as it can be transferred, mortgaged, and inherited without restrictions.

It can allow foreigners to use land for commercial or industrial purposes, which may not be possible under a leasehold right.

It can enable foreigners to enjoy the benefits of property ownership without having to set up a Thai company or rely on a Thai partner.

It can reduce the legal risks and costs associated with other legal structures such as leasehold, usufruct, or ownership by a Thai company.

Protecting Land and Property in Thailand

Thailand Property Lawyers and the ILI group have protected the interests of foreign clients by registering the above agreements in over 30 provinces in Thailand. These agreements will be tailormade by us for your protection and importantly at a reasonable cost. Can you afford not to have us complete one for you??

Also think about this, if you are unprotected and god forbid something happens to your loved one holding the title, where does that leave you if there is no last will and testament providing the asset to you, it leaves you homeless and your investment is gone.

Thailand Property Lawyers and the ILI group can also assist with last wills for all parties.

Contact us today. Protect yourself, Its the right choice. The team are ready to assist.

You can also contact our sister companies

www.isaanlawyers.com

www.anglosiamlegal.com