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In rural China, there are many incomplete procedures. Will old houses without real estate certificates be defined as "illegal buildings" once they are demolished, so they will not be able to receive demolition compensation? Are unlicensed buildings necessarily illegal?
The answer is that unlicensed houses are not necessarily illegal.
1. Unlicensed houses are not illegal buildings
It is not illegal construction without a license, it requires a detailed analysis of the specific situation.

In reality, even if it is an illegal construction, reasonable compensation should be given based on the "principle of proportionality" in administrative law, that is, the "excessive penalty is commensurate" principle in the "Administrative Penalty Law"
As for how to compensate, a comprehensive compensation plan for the expropriation of unlicensed houses can be formulated by taking into account factors such as the construction time, the legislative situation at the time, and whether there was inaction from law enforcement agencies at the time.

If rural residents build houses, as long as they are reviewed by the township government and approved by the county government, even if they do not have a homestead certificate or a house building certificate, it will not be considered an illegal construction.
Even if an unlicensed house is deemed to be an illegal construction, compensation is required. No compensation will be given for the illegal parts of the construction that are determined to be illegal after investigation by the relevant departments. For the legal parts, equal compensation should be given.

2. Can unlicensed houses be compensated?
During the process of house expropriation, administrative agencies should screen and deal with the houses without construction approval procedures and property rights certificates due to historical reasons in accordance with the law before expropriation. Undocumented houses cannot simply be regarded as illegal buildings and no compensation will be given for expropriation. If the illegal demolition of undocumented houses left over from history causes losses, simply because the undocumented houses are illegal buildings, no administrative compensation will be given.

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If the administrative agency does not have sufficient evidence to prove that the demolished unlicensed house is an illegal construction, it shall be regarded as a legal construction, and the items and amount of administrative compensation granted in accordance with the law shall not be less than the items and amount of administrative compensation obtained by the expropriated person through statutory expropriation compensation procedures.
Before 2000, management in most rural areas in China was relatively lax.

Although the "Land Management Law" has been promulgated, it has not been implemented. Many applications for construction of old rural houses have incomplete procedures. Most of them only have a piece of paper with the approval content written on it and stamped with the official seal of the government.
Therefore, there are many unlicensed houses in rural areas. Unlicensed houses do not mean illegal buildings. As long as they are built legally, even if there is no property rights certificate, you can still get full compensation during demolition.

3. Compensation standards for unlicensed houses
However, regardless of whether the expropriated house is illegal or not, fair and reasonable compensation should be given to the expropriated person's land use rights; if the house was legal when it was built, but the lack of a legal property certificate is caused by historical problems that cannot be attributed to itself, and the demolished person has lived in the above-mentioned house for a long time, he should receive legal compensation and resettlement.

House demolition compensation generally includes:
The house compensation fee (house replacement fee) is used to compensate the owners of the demolished houses for their losses, and is calculated based on the unit price per square meter according to the structure and depreciation level of the demolished houses. The turnover compensation fee is used to compensate the tenants of the demolished houses for the inconvenience caused by temporary living or temporary accommodation.

Classified according to temporary living conditions, and monthly subsidies based on the population of tenants of the demolished houses
Compensation for house demolition can be divided into monetary compensation and house property rights exchange or a combination of monetary compensation and house property rights exchange. The compensation amount is determined based on the location, use, building structure, newness, construction area and other factors of the expropriated house, and is determined based on the real estate market assessment price.

A house without a real estate certificate does not mean a house built illegally. If the house is legal, reasonable compensation should be given. If you want to know more about the scope of the definition of illegal construction | information about what laws illegal construction violates, you can consult a lawyer on this site for one-on-one online consultation.

The legal knowledge in this article does not represent legal advice. If you encounter similar problems, you should analyze them in detail.