Integrity Legal

A little known fact: Thailand is one of the few countries not colonized by the British that gave serious thought to adopting the common law. Had Thailand opted to become a common law nation the legal system would probably look very different today. Thailand is a “Civil Law” country and as a result, Thailand Real Estate law and Thai Property regulations are promulgated through the Thai Civil and Commercial Code.

There are two property rights which are relatively uncommon in English speaking countries: the usufruct and superficies. These two legal mechanisms can provide a wide range of property rights to the person who employs them. The following is an explanation of these two legal concepts for those wishing to enjoy property rights in the Kingdom of Thailand.

A usufruct grants the person holding the usufruct with the right to enjoy the use of the land in Thailand. A usufruct can be extremely beneficial because it can be written in such a way that a foreigner can be granted lifetime enjoyment of property. That being said, should the foreigner decide to place structures upon his usufruct, then those structures may need to be abandoned if and when the usufruct comes to an end.

This is where a right of superficies comes into play. The Civil and Commercial Code of Thailand makes provisions regarding superficies, the law states:

When the right of superficies is extinguished, the superficiary may take away his buildings, structures or plantations, provided he restores the land to its former condition.

Therefore, a usufruct is a very useful legal instrument because it could allow a foreigner to have lifetime enjoyment of property, but the foreigner may lose his rights to his or her structures should the usufruct expire (either during his lifetime or upon his death). By utilizing a superficies a foreigner could better protect his or her interests with regard to a Thai usufruct.

It should be noted that the holder of both a usufruct and superficies can assign his or her rights in the provisions of an instrument like a Thai lease or rental agreement. Generally, a lease such as this would expire upon the death of the usufruct holder, but Thai courts have held that leases written upon usufructs shall remain binding past the date of the usufruct holders death. The leasee in that situation would be required to continue paying the originally agreed upon payments, but the payments would be made to the underlying land owner after the usufruct holder’s death. Keep in mind that this rule was made pursuant to a Thai Supreme Court decision. Since precedent is not binding in Thailand, this may not be a hard and fast rule.

For more information regarding this subject please see: Thailand Real Estate FAQ or Thai Condo law

(Please be advised: This is not legal advice it is a personal opinion. No attorney-client relationship should be inferred to exist between the writer and any reader of this post.)

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