Usefruct/land lease on chanot sister-in-law?
Dear readers,
My wife and I (married legally in both NL and Thailand) bought a house from my wife's sister in Thailand in 2017 (so my wife bought it, we pay together, just to be clear). My wife and her sister have drawn up a sales contract (I signed as a witness) containing the total amount and the monthly payment. So together we repay 20.000 baht per month, until the full amount has been repaid. You can see this as a hire-purchase construction. Now a lot can happen and change in a life so I wanted to formalize the agreement a bit.
My wife is then embarrassed in front of her sister to say this, but the other sisters and brother-in-law completely understand. The implementation just went wrong. I had asked a lawyer (Siam legal) for advice, who would draw up a contract. The sister would then act as a kind of bank, we would then pay a monthly mortgage and the land/house would then be immediately transferred to my wife at the land office and I would receive the usufruct. Of course we had the obligation to pay off through the purchase contract and if we did not do this, the sister-in-law could reclaim the land/house. Just like a sofa. But this construction was as they say in English: “lost in translation” because the sister-in-law thought that in this case she would be the less fortunate as the land/house would be immediately transferred to my wife's name.
This construction will therefore no longer work. So I immersed myself in the Thailand blog and other websites to read more about the usufruct and land lease. It now seems to me that we can simply go to the land office with our sister-in-law (if she wants this of course) and have a usefruct / usufruct placed on the chanot. Prices range from 50 to 150 Baht. Both my wife's name and I would then have to be listed on the chanot as usufructuaries. After all, you cannot inherit a usufruct, so if my wife dies earlier (we are about the same age) then I no longer have a usufruct if my own name is not stated and vice versa my wife no longer has the usufruct if her name is not stated (can By the way, you can mention 2 names as usufructuaries, after all, we are married under Thai law?).
Or is it better in this case to also draw up a land lease in addition to the usufruct? Could our repayments then be seen as lease payments for the land and house? And do you simply draw up such a land lease at the land office without the intervention of a lawyer?
I have read that you can use a lawyer if you want to extend the 30 years, so you want to have a kind of infinite lease, but it is unclear to me whether a land lease for 30 years is also done by a lawyer or whether you can simply do this with the land office can arrange. We no longer have to repay 30 years, so could we also calculate the repayment terms and, for example, make a 5, 10 or 15 year lease? Interest is not charged. My sister-in-law, my wife and I are all around 50 years old. Sister-in-law is not married, so no man to inherit from her again.
I really appreciate your comments, thanks in advance and best regards,
Emil
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Dear Emil,
you make it very unnecessarily complicated here, because of all the ancillary constructions, such as dragging in a 30-year lease. That lease is not a solution at all. You have to take into account that, in Thailand, a lease ends when the owner(s) dies. So you stand nowhere if your wife is not the only heiress of that sister.
The simplest is dead simple:
as the owner is unmarried, she can, by will, designate her sister as the sole heir of the property.
Now, first a usufruct, on both your names, which is no problem, have it drawn up at Land Office, which will be added to the chanot. This does not end with the death of the owner, as your wife becomes the heir and therefore full owner. (will)
Then, if the sister dies, have a new usufruct drawn up by your wife, as she is now the new owner, at the land office.
For the rest you will now just continue to pay off the outstanding debt with the sister, and if nothing changes, so both you and the sister live long enough, then let the current agreement come into effect, so good on her register your name and create a new usufruct.
As for the (in)validity of a lease after the death of the owner(s), I read something different, dear Eddy.
https://www.siam-legal.com/realestate/Leases.php
“Most importantly, leases are valid even upon the demise of the lessor, or in the event that the land is sold.”
Translation: Most importantly, leases are valid even upon the death of the landlord, or in the event that the land is sold.
And see from: https://library.siam-legal.com/thai-law/civil-and-commercial-code-exchange-section-537-545/
“Section 541. Contract
Contract of hire may be made for the duration of the life of the letter or of the hirer”
Original Thai text: มาตรา 541 สัญญาเช่านั้นจะทำกันเป็นกำหนดว่า More information ำได้
Translation: Article 541. The tenancy agreement may stipulate that this applies throughout the life of the lessor or lessee.
Not every registry office allows a usufruct for non-Thai. This falls under the discretion of the head of the branch.
We sold a piece of land six months ago.
The Poeyaibaan has written the contract stating that the largest part is paid immediately and the rest will be paid on a certain date in six months.
Both parties have the purchase contract and the buyer keeps the chanoot.
After the remaining amount has been paid on the agreed date, the chanoot will be put in the name of the buyer. The transfer can only be registered with the land register when the buyer and seller appear together in the land register.
If the remaining amount is not paid on time, the contract will be terminated. The first amount paid and the chanoot will be returned.
Dear Theo,
good info, but there is a big question mark with that art 541:
Translation: Article 541. The tenancy agreement may stipulate that this applies throughout the life of the lessor or lessee.
And after that ???? It does not state what happens if the landlord dies. As far as the tenant is concerned, if he dies, there is no problem with that: then it stops. If the landlord dies: as an answer from 2 different lawyers here: STOP because then 'can', does not necessarily have to, the heirs go into joint ownership.
So I would prefer usufruct and not lease. Usufruct is very clear and lease is a waiting game with a high chance of legal wrangling and you know where you stand as a farang….
Thank you.
To avoid problems, it is therefore advisable to specify in the lease/rental contract that the agreement only ends upon the death of the tenant(s)* or when the lease/rental term expires (max. 30 years).
You rightly point out that if this is not laid down in the contract, problems can arise in the event of the death of the landlord.
* Multiple tenants can be mentioned in the contract
“It is recommended to include family members such as young adults as co-lessees in the contract. In the uneventful demise of the parents, the children can carry on the full term of the lease period.”
https://www.siam-legal.com/realestate/Leases.php
Thank you Lung Addie, that is simple indeed.
My experience in udon thani is that the falang husband must sign when purchasing land that the purchase price of the land has not been subsidized by him, no lease can be registered on the back of the deed of sale and no use fruct is mentioned to the falang. I do not know how this is arranged in other provinces.