The Thai Civil and Commercial Code (CCC) provides various rights which can be acquired in relation to property by both Thai and foreign person subject to restrictions particularly applying to foreign land ownership which is basically prohibited except very few excemptions.
One of these rights is the right of habitation which is often overlooked and less known than its far more popular opponent, the lease right. The right of habitation, which is regulated under Section 1402 et seq. of the CCC, can be granted to a person as a right to occupy a building as a dwelling place for either certain period provided that such is not in excess of thirty years or for lifetime of the grantee. In case that a specified time period has been granted, grantor and grantee may agree on a renewal which again must not exceed a period of thirty years.
The right of habitation, as opposed to a lease, is not required to be subject to payment of consideration such as the rent payable from a tenant to its landlord. In addition, the right of habitation shall provide the grantee with a right to have its family and household dwelling with him unless the parties agreed expressly on specific limitation that it shall be only for the grantee. This, together with the fact that the right of habitation can be granted without payment in return, makes the right of habitation an interesting alternative to a lease whenever the parties intention is to provide a right of use and occupation to a property without causing a financial burden on the occupant. Admittedly, such scenario where the owner of a building wishes to grant a right to use and occupy a building without the requirement of payment may only apply in very limited cases, i.e. familial or similiar relationships.
Important to understand is that the right of habitation is required to be registered at the competent land department and creates an encumbrance over a building for the benfit of its specified beneficiary, as opposed to servitude created over land, providing secured access thereto, which usually burdens a specific land plot in favor of another but not necessarily a specific person holding rights to such land. This means that such personal right, as the right of habitation, is not transferrable even by way of inheritance as stated under Section 1404 of the CCC. Therefore, in the event of the grantee´s demise, it can not be passed on to heirs but simply ceases to exist and the property must be returned to the grantor pursuant to Section 1408 of the CCC. Furthermore, the fact that the right of habitation can not be transferred, means that it does not provide a property with a marketable title which would qualify a property for a resale.
Referring to the above, it appears that the right of habitation can be an interesting option for the specific case where a property owner wishes to provide a person with a secured right of use and occupation to a building without causing a financial burden on the occupant, however, its use seems to be very limited and generally will not qualify as basis for a conventional property investment. A legal advisor should be consultated prior to the purchase in order to determine what legal structure is suitable for someones individual requirements.
This article is written by International Law Office Patong Beach Co., Ltd., a Phuket based law firm. In case of enquiries, please contact Michael Greth, Consulant, by email (michael@ilo-phuket.com) or phone (+66-(0) 76-222 191-5).
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