Real estate law
Thailand registered land contracts
The right of Superficies (sections 1410 to 1416 of the civil and commercial code) is a transferable and inheritable interest in land giving the superficiary (the person(s) to whom a right of superficies is granted) for a specified term the right to own or acquire buildings construction in, on or above the land owned by another. Foreign and Thai nationals can obtain a right of superficies by agreement with the owner of the land and registration with the Thailand Land Registry.
A building is inseparable from ownership of the land beneath (land and building form one object for ownership), however the real property right of superficies is a legal instrument to legally separate ownership of the land and anything in, on or above the land (including the structure). It legally creates separate ownership of the land and anything on or in the land. Right of superficies is not a typical Thai law as right of superficies originates from Roman law and is also still used in European civil law countries like in France where it is called 'droit de superficie', and in Germany 'Erbbaurecht' and in the Netherlands it is called 'recht van opstal'.
Superficies in Thailand
The right of superficies (registered on the land title deed) is a real right which means that it is attached to the land (superficies is legally a form of asset). Superficies is governed by book 4 'property' of the civil and commercial code and not book 3 governing contracts. A right of superficies is considered a property (as opposed to a contract right) and can survive the life of the owner of the land and the superficiary (or superficarius) and is transferable by inheritance (unless restricted in the contract granting the right of superficies). Superficies is a suitable and strong legal right for building upon leased land and on securing ownership of the building as long the land has a proper land title deed and the right of superficies is also registered on the land title deed by the competent authority (the Thailand Land Registry or Land Office).
Term of a Right of Superficies
The right of superficies may be created either for a period of time (similar to a lease for up to 30-years) or for life of the owner of the land or the life of superficiary. If created for a period of time the right of superficies may be renewed. The agreement granting the right of superficies usually drafted in combination with a land lease, each allowing separate clauses for long term protection in a real estate investment by the hirer and developer of a building upon another person's land.
Registration with the Land Department
The right of superficies is not complete (valid) unless registered on the backside land title deed by the competent land official at the local Land Department's branch office. The agreement granting the right of superficies must be in Thai script and will be noted on the backside of the land title deed. Registration takes place at the local land office and a registration fee of 1.1 % is charged based on the value/ consideration for the superficies. If the right of superficies is granted without further consideration (as part of a long term land lease construction) the land office will charge a minimal extra amount for the superficies registration.
Real estate ownership documents
The main documents related to a home in Thailand are the land title deed, the house registration book (and building permit) and the land office transfer of ownership document
Benefits of a Right of Superficies
The main benefit of a superficies is that it automatically grants ownership of anything built upon leased land and it creates certain real property rights (attached to the land) which are under a land lease agreement merely personal or contractual rights (attached to the parties only). Another benefit of superficies is that a right of superficies is transferable by inheritance (separate from the land lease).
It is important to distinguish contract rights under the lease agreement which are primarily attached to the parties and real property rights (right of superficies) which are primarily attached to the land itself. A lease agreement is in principle only binding between the parties to the lease and terminated upon death of the lessee. A right of superficies is primarily attached to the land it is not terminated upon death of the superficiary or owner when the superficies is created for a period of time. Again, note that a lease agreement is under Thai hire of property laws considered a personal contract right of the lessee and is terminated upon death of the lessee.
Written superficies laws:
Thailand Civil and Commercial Code
Section 1410. The owner of a piece of land may create a right of superficies in favour of another person by giving him the right to own, upon or under the land, buildings, structures or plantations.
Section 1411. Unless otherwise provided in the act creating it, the right of superficies is transferable and transmissible by way of inheritance.
Section 1412. 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 provisions of Section 1403 paragraph 3 shall apply mutatis mutandis
Section 1413. If no period of time has been fixed, the right of superficies may be terminated at any time by any partner giving reasonable notice to the other. But when rent is to be paid, either one year's previous notice must be given or rent for one year paid.
Section 1414. If the superficiary fails to comply with essential conditions specified in the act creating superficies or, when rent is to be paid, he fails to pay it for two consecutive years, his right of superficies may be terminated.
Section 1415. The right of superficies is not extinguished by destruction of the buildings, structures or plantations even if caused by force majeure.
Section 1416. When the right of superficies is extinguished, the superficiary may take away his buildings, structures or plantations, provided he restores the land to its former condition.
If instead of permitting the removal of the buildings, structures or plantations, the owner of the land notifies his intention to buy the at a market value, the superficiary may not refuse the offer except on reasonable ground.