A Usufruct is a real right by virtue of which a person is given the opportunity to enjoy the property of another with the concomitant obligation of preserving the property. A usufruct generally involves two requisites– first, the right to enjoy the property of another and second, the obligation to preserve the form and substance of the property.

Legalese aside, a Usufruct is considered as one of the most potent means for allowing foreigners to acquire property interests in Thailand particularly in its resources such as mines, forests and quarries. Its simplicity has been compared to that of a lease although a Usufruct entails more rights and privileges not present in the latter.

Constituting a right of Usufruct has certain advantages. Being a real right, the title creating the Usufruct is required to be registered with the Land Office. Once registered, the person holding the right, known as the usufructuary, is then entitled to the enjoyment of the land. Under Thai law, a Usufruct may be constituted either for a specific period of time or for the lifetime of the usufructuary. In the event that no period of time was specified, a presumption arises that such exists during the life of the usufructuary. An additional advantage of having a right of Usufruct over a property is that the land owner is prohibited during its existence from alienating the property. Moreover, a usufructuary may acquire a House Registration Certificate enabling him to lease or rent out the property and receive rent income.

One of the most prevailing issues regarding the right is its transmissibility. Under the Thai Civil and Commercial Code, the exercise of such right may be transferred to other persons during the lifetime of the usufructuary. But once the usufructuary dies, the right is deemed terminated and the property reverts back to the landowner. As a means of addressing this problem, a usufruct may constitute a lease in favour of his or her heirs during his or her lifetime. Thai jurisprudence has already laid down the doctrine that a lease agreement survives the usufructuary’s death. Consequently, this extends the lifetime of the usufruct for thirty (30) years to the benefit of the heirs.

A Usufruct may be likened to the concept of Servitudes under common law as the two operate similarly. The difference lies in that a Servitude may be inherited by the holder’s heirs. In such case, a Usufruct is similar to a life estate used in the United States or the law on trusts as understood in the United Kingdom.

Those wishing to obtain this right must however bear the following in mind: First, a usufructuary is required to maintain the property in suitable condition by answering for minor repairs, taxes and fees including interests in outstanding mortgages. Second, the usufructuary is prohibited from making major alterations on the property. Third, the usufructuary is held liable for the destruction and depreciation of the property unless of ordinary prudence is exercised. Last, the owner of the land has the right to compel the usufructuary to insure the property and in the event that the property has already been insured, the usufructuary may renew such insurance.

The right of Usufruct is one of the limited rights over real Thailand properties available to foreigners. In spite of the advantages brought by such right, issues regarding its limited and transitory nature make most potential usufructuaries hesitant and weary of engaging in such an activity. Still, the protection and security afforded by this right to its holders outweigh these concerns.