Government-enterprise disputes

Usually during the house expropriation process, the house owner will be compensated accordingly. However, in reality, it often happens that the house lessee has rented the house for many years and wants to compensate the house owner on the grounds that the lease contract has not expired. So, can the house lessee get compensation?
There is such a case: I signed an "Asset Lease Agreement" with one of Xiao Zhang's companies.

The two parties agreed that the company would rent one of its commercial buildings to Xiao Zhang for operation. The lease period was three years. During the lease period, if it was expropriated by the government, the two parties agreed that the agreement would be terminated when the company notified Xiao Zhang. The company would not be liable for any compensation for the expenses incurred by Xiao Zhang in decorating the leased house.
In May 2019, the case involved the expropriation of rental housing.

The company notified Xiao Zhang in writing to terminate the lease agreement signed by both parties, and required Xiao Zhang to move out and return the leased house. Xiao Zhang agreed to move out, but required the company to compensate for his decoration losses, relocation expenses, resettlement subsidies, and losses due to suspension of production and business, etc.
The company believes that Xiao Zhang is not the owner of the expropriated house and is not entitled to compensation according to law. Moreover, the two parties also stipulated in the contract the losses caused by the expropriation of the house, and the demolition company is not responsible.

Beijing Professional Demolition Law Firm is mainly engaged in administrative litigation of large and medium-sized enterprises, government-enterprise disputes and other difficult legal issues, involving investment projects, corporate relocation, land recovery, mineral resource suppression, maritime rights disputes, corporate restructuring and bankruptcy and other legal services. If you have any relevant questions, please call or leave a message, we will reply as soon as possible.

Is Xiao Zhang entitled to compensation for decoration losses, compensation for relocation expenses, compensation for temporary resettlement, and compensation for losses due to suspension of production and business?
After hearing the case, the court held that although the asset leasing agreement signed by both parties stipulated that the company would not be liable for any compensation for the expenses incurred by Xiao Zhang in decorating the leased house, the corresponding decoration compensation given by the expropriated party should be enjoyed by the lessee.

Therefore, Xiao Zhang has the right to claim compensation for decoration losses.
As the actual user of the house, although Xiao Zhang is not the owner of the house, if the company and the expropriation department do not provide temporary resettlement to him, he is entitled to receive relocation expenses and temporary resettlement expenses from the company's actual demolition compensation, as well as compensation for losses caused by suspension of production and business.
Therefore, the court ruled that the company should pay Xiao Zhang compensation for decoration losses, relocation expenses, temporary resettlement expenses, losses from production and business suspension, etc.

Although the "Regulations on House Expropriation and Compensation on State-owned Land" does not clearly stipulate whether the lessee can obtain house expropriation compensation, in practice, as the actual user of the house, whether the lessee is entitled to demolition compensation mainly depends on the provisions of the expropriation compensation contract and the lease contract.
If the parties have not agreed on the lessee's relevant compensation or the agreement is unclear, it shall be determined based on the principle of fairness and in combination with the unfulfilled period of the lease contract, the compensation agreement and the actual situation of the lessor accepting compensation.

Therefore, if the house leased by the enterprise is expropriated, the lessee can obtain certain compensation
Specifically, the distribution of house expropriation compensation is usually carried out as follows:
1. As the owner of the house, the lessor is entitled to compensation for the value of the house itself;
2. As the actual user of the house, the lessee is entitled to compensation for relocation and temporary resettlement caused by house expropriation;

3. For the decoration part, if it can be removed, it can be removed by the lessee; if it cannot be removed and the contract has not expired, the compensation part will be enjoyed by the lessee;
4. Any loss caused by the suspension of production and business due to house expropriation shall be handled as appropriate based on the unfulfilled period of the contract between the two parties and the actual situation of the lessor's compensation.

The legal knowledge in this article "Can Tenants Obtain Demolition Compensation" does not represent legal advice. If you encounter similar problems, you should analyze them in detail. If you want to know more about the regulations on compensation for tenants’ demolition and demolition, the handling of compensation accounts for demolition tenants, etc., you can have one-on-one online consultation with a lawyer from a professional demolition law firm in Beijing.