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Marital home and division of the house in a divorce

Real estate ownership in an foreign/ Thai marriage

As it is strictly prohibited for foreign nationals to own land in Thailand it has long been illegal for a Thai national married to a foreigner to acquire land because the foreign spouse would this way obtain ownership in land through Thai matrimonial property laws (assets between husband and wife). It is only since a Ministry of Interior regulation dated March 23 1999 that it is allowed for a Thai national married to a foreigner to purchase land but the land must become a non-marital property of the Thai. The regulation requires a strict procedure to prevent the land from becoming a joint or martrimonial property between husband and wife. In the registration of ownership procedure it must be confirmed that all money paid for the land is personal property of the Thai spouse and therefore the land will become a personal property of the Thai spouse (section 1472). Only in this case the land officer is allowed to register ownership of land as a personal property on the name of a Thai national married to a foreigner.

What does this mean in a divorce.

Under Thai marriage and divorce laws only common property must be divided in equal shares upon termination of the marriage, non-marital (personal) assets do not have to be divided. When dividing assets between husband and wife in a divorce (or death) the first question is if an asset is a personal or common property. When the above procedure has been followed the foreigner cannot simply ask for division of the house as part of the common property as the house is registered as a personal property of the Thai spouse and therefore must not be divided (the foreign spouse has signed away his rights in the land office certify letter). Only if the official land acquisition procedure for a Thai national married to a foreigner not has been followed the land or land and house is considered a common property between husband and wife and must be divided upon termination of the marriage (unless the Thai spouse can proof the home is purchased with her personal property). In practice this situation can only be achieved if the Thai spouse has given false information to the land office officials when registering ownership over the property (not declaring the marriage with the foreigner). In such cases the Land Departments enforcement and punishment measures in land holding as an agent for a foreigner could be applied and used against the foreigner and his Thai spouse, and if found guilty they are liable for fines and even imprisonment.

The marital home in Thailand, registered as a personal asset of the Thai spouse, will not be divided equally as it is not automatically considered a common property between husband and wife but a non-marital asset of the Thai spouse.

Personal property of the foreign spouse

LAND AND HOUSE HAS BEEN REGISTERED AS A PERSONAL PROPERTY OF THE THAI SPOUSE

Often the land and house has been purchased with money belonging to the personal assets of the foreign spouse and is given to the Thai spouse to purchase the real estate property. The foreigner signs away his rights to the property in the certify or land office confirmation letter. The marital home could be part of the division of assets depending on the individual circumstances (e.g. the land has been registered as a personal asset of the Thai spouse and the house is built during the marriage by husband and wife). The foreigner could also revoke his gift in a divorce procedure, or if this subject is governed and anticipated in a prenuptial agreement made before the marriage he could use this as a claim for compensation. For example the money expended on the property must be made up to him by a share from the other common assets. If land is purchased as a personal property and the home is built later the house separate from the land could be considered a common property based on section 1474 Civil and Commercial Code (property between husband and wife).

Divorce and marital home

Even if the correct procedure has been followed and the property has been registered as a personal property of the Thai spouse it does not in all cases mean that there are no legal grounds in contested divorce for the foreigner to claim revocation of the gift or compensation for the money expended on the property. Foreigners who invested in real estate in Thailand in a Thai marriage should not always write off their investment in a divorce. In a divorce on mutual consent or contested divorce they should not settle for less than entitle to. The best advice is to make a solid prenuptial agreement before the marriage, keep evidence of your finances and payments made during the marriage, and if your Thai spouse behaves improperly and gives reason for divorce keep evidence of this.

USUFRUCT IN A THAI MARRIAGE

Protect your rights in a real estate owned by a Thai spouse

Real estate ownership by a Thai national married to a foreigner

When you registered a property (land and house) in Thailand on your Thai spouse’s name during your marriage you may have thought about a personal protection in the form of a usufruct to protect your interest in case of divorce or in the event your Thai spouse would predecease you. However, you may not be familiar with the right of usufruct in Thailand as it is a typical Civil Law property right and you may also not be aware what your rights and obligations under a right of usufruct are.

The usufruct of an immovable property is primarily the right to use and manage another person’s real estate property and receive the benefits (‘fruits’) from it. Management in this matter means to the extent permissible for foreigners under Thailand land laws. This means you can live in the house and you can for example rent it out and keep the rent but as a foreigner you cannot register a rental exceeding 3 years with the Land Department.

The usufruct does not give the right to sell the property nor does it gives the title to the property. The usufruct comes to an end at the end of the agreed period and on the death of the person granted the right of usufruct. Whether the usufruct is given for a period of time of up to 30 years or for the life of a person, in any case, the usufruct comes to an end on the death of the person granted the right of usufruct. A usufruct is a form of life interest in the real property.

A usufruct could also be given to more than 1 person at the time. A right of usufruct in Thailand is usually a legal instrument to protect a foreign spouse in case the property is registered on the Thai spouse’s name. It enables the foreign spouse to use the property when he survives the Thai spouse and registered owner. The Thai spouse could for example leave the property to the couple’s children, if of Thai nationality, but warrants by way of a registered right of usufruct that his or her foreign spouse has the use and benefit of the property during his lifetime. Upon the usufructuary’s death the usufruct comes to an end and the Thai registered owner(s) receives full unencumbered ownership again.

The usufructuary under Thai Law has the obligation to maintain the property and take normal care of the property. If the usufructuary fails to do so and the property would lose value as a result of poor management or would become in a poor state of repair the owner has the right to terminate the right of usufruct. The usufructuary is liable for loss of value or destruction of the property unless he can proof that damages are not caused by his fault.

The creation of a usufruct could in certain circumstances be an effective option to protect a foreign spouse during his marriage in Thailand and upon death of his or her Thai spouse, however in some cases a usufruct contract may not be the best option. For example if the Thai spouse registers ownership over land and the couple plans to build a house on it a right of superficies may be a more suitable right.

Divorce and the Marital Home