Usufruct In Thailand

A usufruct, known as “Sidhi-kep-kin” in Thai language, is a right that gives temporary ownership rights of the property along with an advantage of being able to reap the profits from property belonging to another as long as the property is not damaged or altered in any way.

Use of Usufructs

Foreigners can apply to register a usufruct over a land. However, you must also note that this is still subject to the discretion of the Land Officer.

The term “Usufructuary” applies to the person who enters into a contractual agreement with the owner for this right. A usufruct may be registered in a similar manner to a lease for up to 30 years, or for the life of the usufructuary.

Once registered, it will have effects as servitude on the title. The owner of the land is not entitled to sell or transfer the land until the servitude has been terminated.

The usufructuary must also keep the property intact and it must be returned in the same condition that it was in when the usufruct was granted.

The usufructuary shall be held responsible for the expenses for the management of the property, paying taxes and duties, and being responsible for interest payable on debts charged to it.

If required by the owner, the usufructuary is bound to insure the property against loss for the benefit of the owner. They must pay the insurance premiums for the duration of their usufruct and their right is also registered on the title deed.

A usufruct interest expires upon the death of the holder of the usufruct and therefore cannot be inherited.

Transfer of Usufructs

Transfer to a Third Party

The beneficiary in a usufruct scenario may also transfer his rights to the usufruct to a third party

The grantor of the usufruct, however, will still claim for damages caused by the third party directly against the usufructuary.

An interesting feature of usufruct is that the usufructuary can enter into a 30-year lease with a third party. So if the usufructuary signed a 30-year lease contract before his death, the lessee (tenant) will maintain the rights of the lease until its expiration.

Transfer through Inheritance

Through inheritance, the usufructuary can also transfer the right of using the land.

However, it remains to be seen if the Land Department officials would allow a transfer of the rights to the land. There is no annual tax levied on the property compared with the 12.5 percent of the assessed or market rate rental value in the case of a registered lease.