As you may well know, foreigners aren’t allowed to have ownership rights over land. But that doesn’t include the house and buildings built upon or under the land! In 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?
It is the right to own buildings, structures, or plantations upon or under the land. It arises from the contract between ‘the owner of the land’ and another person, ‘the superficiary.” You may notice that sometimes the owner of the land and the owner of the building below or above the land are not the same. Also, the superficies under Thai law include emphyteusis.
The owner of the land includes the owner of all types of NorSorSam land (Supreme Court Judgment no. 6188/2545).
Assignment and Succession
According to Section 1411 of the CCC, unless otherwise provided in the act creating it, the right to superficies is transferable and transmissible by way of inheritance.
Term of Superficies
A right of superficies may be created either for a period of time or for the 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 (Section 1412 of the CCC).
As you may know, 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.
Superficies is a real property right which means binding to everyone as ownership rights. In light of real property rights, superficies must be registered with the land officer. If not, the right of superficies will be legally binding only to the contract parties, not binding to any third parties, Importantly, the register of purchasing a house to the land office makes the Sale of immovable property to be valid but it does not create the superficies rights under the law. It is a different question of law (Sections 456, 1299, and 1410 of the CCC).
Termination and Results
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 party. But if there is rent, either one year’s previous notice must be given or rent for one year must be paid (Section 1413 of the CCC). Keep this in mind: although the law states the word ‘rent,” 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,” it creates the right of superficies. If he or she fails to pay the rent for two consecutive years, the right to superficies may be terminated (Section 1414 of the CCC).
However, it is not extinguished by the destruction of buildings, structures, or plantations, even if caused by force majeure (Section 1415 of the CCC).
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 the superficiary of 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. (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 Judgement no. 1995/2522).
Right of superficies grants foreigners to have complete protection of ownership rights of all kinds of buildings in Thailand when registering the right to the Land department. 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 contact us at any time.