For foreigners who wish to live in or enjoy the benefits of real estate in Thailand, understanding the legal mechanisms available for property use is essential.
While Thai law generally restricts foreign ownership of land, it provides certain legal arrangements through which foreigners may obtain rights to use and enjoy immovable property owned by another person.
One such arrangement is usufruct, a legal right governed by Sections 1417–1428 of the Thai Civil and Commercial Code (CCC).
Usufruct can be particularly relevant to foreign nationals who wish to secure long-term use of a property owned by a Thai spouse, partner, family member, or another property owner.
This article explains the legal nature of usufruct, how it operates under Thai law, the rights and obligations of the parties, and important considerations for foreigners seeking to establish a usufruct in Thailand.
1. What Is Usufruct under Thai Law?
Under Section 1417 of the Thai Civil and Commercial Code, an immovable property may be subject to a usufruct, granting the usufructuary the right to possess, use, and enjoy the property.
The usufructuary also has the right to manage the property. In practical terms, usufruct allows one person to enjoy the benefits of real estate owned by another person, without acquiring ownership of the property itself.
For example: A Thai national owns a house and land in Thailand. The owner wishes to allow their foreign spouse to reside in the property and enjoy its benefits during the spouse’s lifetime. The owner may establish a usufruct in favour of the foreign spouse, subject to applicable legal requirements and registration at land department to enforce by law.
Following registration, the foreign spouse becomes the usufructuary and obtains the rights specified under Thai law and the registered arrangement. The Thai national remains the owner of the property.
Ownership and usufruct are different legal rights
It is important to distinguish between:
- Ownership: The legal title to the property.
- Usufruct: The legal right to possess, use, and enjoy the property.
A usufruct does not transfer ownership to the usufructuary. The property owner retains ownership, while the usufructuary receives a separate legal right to use and benefit from the property. This distinction is particularly important for foreign nationals, as usufruct does not provide a means of acquiring ownership of Thai land.
2. Who Can Establish a Usufruct?
Under Thai law, a usufruct may be established over immovable property in favour of another person. A usufruct may be established in favour of a foreign national, subject to the applicable legal requirements and registration procedures. However, the establishment of a usufruct does not exempt the parties from other laws and regulations governing property ownership in Thailand.
3. What Rights Does a Usufructuary Have?
The rights of a usufructuary are principally governed by Sections 1417 and 1422 of the Thai Civil and Commercial Code.
3.1 Right to possess and use the property
Under Section 1417, the usufructuary has the right to possess and use the property.
Depending on the nature of the property and the terms of the arrangement, this may include the right to reside in a house or use the property for its intended purpose.For example, where a usufruct is established over a residential property, the usufructuary may generally occupy and use the property in accordance with the rights granted.
3.2 Right to enjoy the benefits of the property
The usufructuary is entitled to enjoy the benefits derived from the property. Depending on the circumstances, this may include receiving rental income from the property. For example, if the usufructuary has the right to lease the property to a third party, the usufructuary may receive the rent generated during the period in which the usufruct remains effective. However, the scope of this right should be considered in light of the registered usufruct, the underlying agreement, and applicable law.
3.3 Right to manage the property
Section 1417 also grants the usufructuary the right to manage the property. This means that the usufructuary is not merely permitted to occupy the property but may also have authority to manage it within the scope of the usufruct. Nevertheless, this management right does not confer unrestricted authority to alter the property or exercise the owner’s rights. The usufructuary must
comply with the legal obligations imposed by Thai law, including the obligation to preserve the substance of the property.
4. How Long Can a Usufruct Last?
The duration of a usufruct is governed by Section 1418 of the Thai Civil and Commercial Code. A usufruct may be established: for a specified period; or for the lifetime of the usufructuary.
4.1 Usufruct for a specified period
Where a usufruct is established for a fixed period, the duration must comply with the applicable legal limitations. The usufruct granted for a specified period may not exceed 30 years. A usufruct may therefore be established for a period of up to 30 years, subject to the applicable legal requirements.
4.2 Lifetime usufruct
A usufruct may also be established for the lifetime of the usufructuary. Where no period is specified, The usufruct is presumed to exist for the lifetime of the usufructuary. A lifetime usufruct may be particularly relevant where a property owner wishes to grant a foreign spouse or family member the right to use and enjoy the property throughout their lifetime.
4.3 Can a usufruct be renewed?
A usufruct granted for a fixed period may be renewed or a new usufruct may be established, subject to applicable legal requirements. However, parties should not assume that a fixed-term usufruct automatically continues beyond its registered term. Any renewal should be properly arranged and registered where required.
5. What Happens When the Usufructuary Dies?
Section 1418 expressly provides that a usufruct terminates upon the death of the usufructuary. This is an important feature of usufruct under Thai law. A lifetime usufruct is personal to the usufructuary and does not continue automatically for the benefit of their heirs.
6. Can the Property Owner Sell the Property?
A usufruct does not transfer ownership of the property to the usufructuary. The owner retains ownership and may generally transfer the property, subject to the registered rights affecting it. However, a usufruct is a registered real right over immovable property. The transfer of ownership does not, by itself, extinguish a validly registered usufruct.
Consequently, a purchaser may acquire ownership subject to the existing usufruct, depending on the legal circumstances and the rights registered against the property. This means that a property owner should not assume that selling the property automatically removes the usufructuary’s rights. Likewise, a usufructuary should understand that the usufruct does not make them the owner of the property.
7. What Are the Usufructuary’s Obligations?
Although a usufructuary has substantial rights to use and enjoy the property, Thai law also imposes several obligations.
7.1 Duty to preserve the property
Section 1421 requires the usufructuary to take care of the property as a person of ordinary prudence would take care of their own property.
The usufructuary must exercise their rights responsibly and avoid causing unnecessary damage to the property.
7.2 Duty to maintain and repair the property
- Preserve the substance of the property.
- Carry out ordinary maintenance.
- Undertake minor repairs.
The usufructuary must not materially alter the nature or substance of the property in a manner inconsistent with the legal obligations governing usufruct.
7.3 Major repairs
Where major repairs or other important measures are necessary to preserve the property, the usufructuary must promptly notify the owner.
The usufructuary must allow the necessary work to be carried out.
If the owner fails to arrange the necessary work, the usufructuary may arrange it at the owner’s expense, subject to the requirements of Section 1424.
7.4 Expenses, taxes, and interest
Section 1426 provides that, during the usufruct, the usufructuary must bear:
- Expenses relating to the management of the property.
- Taxes and duties.
- Interest payable on debts attached to the property.
The allocation of expenses should be considered carefully when establishing a usufruct, particularly where the property involves ongoing maintenance costs or substantial financial obligations.
8. Can the Owner Restrict the Usufructuary’s Use of the Property?
A usufructuary must exercise their rights in accordance with Thai law and the legal arrangement creating the usufruct. Section 1423 allows the owner to object to unlawful or unreasonable use of the property. If the owner can prove that their rights are in danger, they may also demand security from the usufructuary, subject to the statutory exception. Where the usufructuary fails to provide the required security within a reasonable period, or continues to use the property unlawfully or unreasonably despite the owner’s objection, the court may appoint a receiver to manage the property. This provision demonstrates that a usufructuary’s rights are substantial but not unlimited.
9. Is Registration Required?
For a usufruct over immovable property, registration is an essential practical consideration. A usufruct should be properly registered with the competent Land Office against the relevant property title. Registration provides formal recognition of the real right over the immovable property. An agreement between the parties alone should not be assumed to provide the same protection as a duly registered usufruct.
Conclusion
Usufruct is an important legal mechanism under Thai law that allows a person to possess, use, and enjoy the benefits of immovable property owned by another person.
For foreigners, it may provide a means of securing legally recognised rights to use property in Thailand, particularly in situations involving a Thai spouse or property owner.
Nevertheless, usufruct does not confer ownership, and the rights of the usufructuary remain subject to the Thai Civil and Commercial Code and the terms of the registered arrangement.
Understanding the legal nature, limitations, and obligations associated with usufruct is essential before establishing such a right.
Professional legal advice should be obtained before entering into a usufruct arrangement to ensure that the proposed structure is appropriate for the parties’ circumstances and complies with Thai law.
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