What is the difference between Superficies and Usufruct is one of the most frequently asked questions for the real estate investor. This article is going to give you the main differences of the rights and duties between them.
Ownership Rights and Rights of Use
Superficies gives you the ownership rights above the ‘BUILDINGS’. It means, you are the owner of the building which not only 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 Section 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 it not only means the buildings but also the land. It means you aren’t the owner of the immoveable property but you can occupy the property, use and enjoyment. Also, management of the property. Keep this in mind, in some cases which law aims to protect ownership rights, you do not have a right to recover it from any person not entitled to detain it and don’t have a right to prevent unlawful interference with the property under the Section 1417 and 1336 of the CCC.
A clear exemple is the damage made to the property by a third person. Superficies beneficiary, as owner, is sure to entitle all the compensation including all damages, but the usufruct beneficiary is not entitled to do so, his amount can be less than amount received by owner such as the amount for damages of losing the right of use.
Superficies is transmissible by way of inheritance but usufruct is not (Section 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 Section 1411 and 1422 of CCC.
Period of Time
Both Superficies and Usufruct may be created either for a period of time or for life of the owner of the land or the superficiary/usufructuary. If it is created for a period of time, the period 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 (the Section 1412, 1418 and 1403 paragraph 3 of the CCC).
If no period of time has been fixed, there will be the difference, the right of superficies may be terminated at any time by any 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 paid (the Section 1413 of 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 (the Section 1418 paragraph 2 of the CCC)
Maintenance and Expenses
As superficies is the ownership rights, therefore, the superficiary must take care of everything to maintain and pay all expenses himself.
Usufruct is not the rights 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 own 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 for the preservation of the property, the usufructuary must forthwith inform the owner thereof 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 (Section 1421 and 1424 of 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 interests payable on debts charged upon it (Section 1426 of CCC).
The 2 keys difference between superficies and usufruct in Thailand are the level of rights and inherit rights. Hope this article gives you some picture of the difference between them. Which one is better? You know the best, it is your choice. If you are in need of a real estate lawyer or for more information feel free to contract us at any time.