What is the difference between Superficies and Usufruct? This is one of the most frequently asked questions for the real estate investor. This article is going to give you the main differences in the rights and duties between them.

Ownership Rights and Rights of Use

Superficies give you ownership rights above the ‘BUILDINGS’. It means you the owner of the building and not only do you have the right to use, dispose of it and acquire its fruits but also the right to follow and recover it from any person not entitled to detain it and the right to prevent unlawful interference with it. That is under the Sections 1410 and 1336 of the Civil and Commercial Code of Thailand (CCC).

Usufruct gives you the rights to the possession of the ‘IMMOVABLE PROPERTY’ which means the buildings and the land. It means you aren’t the owner of the immovable property, but you can occupy it for your own use and enjoyment and management of the property. Keep this in mind: in some cases in which the law aims to protect ownership rights, you do not have a right to recover it from any person not entitled to detain it, and you don’t have a right to prevent unlawful interference with the property under Sections 1417 and 1336 of the CCC.

A clear example is the damage done to the property by a third party. The superficies beneficiary, as owner, is sure to be entitled to all the compensation, including all damages, but the usufruct beneficiary is not entitled to do so; his amount can be less than the amount received by the owner, such as the amount for damages from losing the right of use.

Inheritance rights

Superficies are transmissible by way of inheritance, but usufruct is not (Sections 1411 and 1418, paragraph 4 of the CCC).

Right of assignment

Both the superficies and usufruct are transferable to a third person based on the agreement between the parties under Sections 1411 and 1422 of the CCC.

Period of Time

Both superficies and usufructs may be created either for a certain period of time or for the life of the owner of the land or the superficiary or usufructuary. If it is created for a period of time, it may not exceed thirty years; if a longer period is stipulated, it shall be reduced to thirty years. The grant may be renewed for a period not exceeding thirty years from the time of renewal (Sections 1412, 1418, and 1403 paragraph 3 of the CCC).

If no period of time has been fixed, there will be a difference, and the right of superficies may be terminated at any time by either party giving reasonable notice in advance to the other. But when compensation for the superficies is to be paid, either one year’s previous notice must be given or the compensation for one year must be paid (Section 1413 of the CCC). But if no time has been fixed for the right of usufruct, it is presumed that the usufruct is for the life of the usufructuary (Section 1418, paragraph 2 of the CCC).

Maintenance and Expenses

As superficies are ownership rights, the superficiary must take care of everything to maintain them and pay all expenses himself.

Usufruct is not the right of ownership; therefore, to exercise usufruct, the usufructurist must take as much care of the property as a person of ordinary prudence would take of his property. Also to keep the substance of the property unaltered and is responsible for ordinary maintenance and petty repairs.

If important repairs or measures are necessary to preserve the property, the usufructuary must inform the owner and permit them to be carried out. In case of default by the owner, the usufructuary may have the work carried out at the owner’s expense (Sections 1421 and 1424 of the CCC).

Also, for the duration of the usufruct, the usufructuary shall bear expenses for the management of the property, pay taxes and duties, and be responsible for interest payable on debts charged upon it (Section 1426 of the CCC).

Conclusion

The two key differences between superficies and usufruct in Thailand are the level of rights and the inherent rights. I hope this article gives you some idea of the difference between them. Which one is better? You know the best; it is your choice. If you require a real estate lawyer or want more information feel free to contact us at any time.