As you may well know, foreigners aren’t allowed to have the ownership rights above the land. But that doesn’t include the house and building upon or under the land! This article we’re going to talk about Rights of Superficies which separate the ownership rights between the land and the building upon or under it. How does it work under Thai law?
What Does Superficies Mean?
It is the right to own buildings, structures or plantations upon or under the land. It is arising by the contract between ‘the Owner of the land’ and another person ‘the Superficiary’. As you may know that all contracts in Thailand are subject to the condition of validity. Keep in mind that the superficies rights must be registered with the Land Department. If not, the acquisition of the right of superficies isn’t complete according to the Section 1410 and 1299 of the Civil and Commercial Code of Thailand (CCC).
You may notice that sometimes the owner of the land and the owner of the building below or above the land may not be the same one. Also, the superficies under Thai law include the emphytusis.
The Owner of the land includes the owner of all types of NorSorSam land (Supreme Court Judgment no. 6188/2545).
Can This Right be Transferable to The Inheritor(s)?
According to the Section 1411 of the CCC, unless otherwise provided in the act creating it, the right of superficies is transferable and transmissible by way of inheritance.
Is There Any Period of Time?
A right of superficies may be created either for a period of time or for life of the owner of the land or the superficiary. 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 of the CCC).
Can the Right of Superficies be Terminated?
If the period of time hasn’t been fixed, the right of superficies can be terminated at any time by giving reasonable notice to the other. But if there is the rent, either one year’s previous notice must be given or rent for one year paid (the Section 1413 of the CCC). Keep this in mind, although, the law states the word ‘rent’ but it is still the superficies, it isn’t a rental or lease.
If the Superficiary fails to comply with ‘essential conditions specified in the contract which creates the right of superficies. If he/she fails to pay the rent for two consecutive years, the right of superficies may be terminated (the Section 1414 of the CCC).
However, it is not extinguished by destruction of the buildings, structures or plantations even if caused by force majeure (the Section 1415 of the CCC).
What Happens if the Right of Superficies is Terminated?
In any case of termination of the superficies, the Superficiary may take away the buildings, structures or plantations, but the land must be restored to its former condition. However, if the Owner of the land notifies his intention to buy the buildings, structures or plantations at a market price, the Superficiary is able to refuse the offer on reasonable grounds only. (the Section 1416 of the CCC). In case the Sale and Purchase agreement doesn’t need to be registered with the Land Department (Section 144 of the CCC, Supreme Court Judgment no. 1995/2522).
Finally, I hope this article is useful to you. If you have any questions about the Rights of Superficies, feel free to email us. If you are in need of a real estate lawyer or for more information feel free to contract us at any time.