Perspective | Judicial Principles in Land Acquisition Compensation Cases and Prevention of Administrative Legal Risks

In the process of land acquisition, it is often accompanied by parties refusing to accept the compensation agreement. As a result, administrative authorities may forcibly demolish buildings on the land in order to advance the land expropriation, prompting the administrative counterparties to file administrative lawsuits accordingly. By analyzing and summarizing relevant judgment documents from the Supreme People's Court, this article argues that, depending on the specific circumstances of each case, the following three principles can serve as the judicial guidelines for resolving disputes over forced demolitions in practice:

In land acquisition compensation, monetary compensation typically exists alongside Property Rights Exchange There are two compensation methods. After the house has already been demolished by the land acquisition authority, the court should, guided by the principle of protecting the parties' interests, select the compensation plan that best serves those interests. For instance, in Case No. (2020) Supreme People's Court Administrative Reexamination No. 38, the house belonging to the plaintiff, Huang Baoyin, was forcibly torn down. Under the compensation and resettlement plan, however, the monetary compensation Huang received was insufficient to purchase a newly built resettlement home of equivalent size on the market. To ensure his family still had a place to live while also accounting for the property's prime location value, the court ultimately adopted a solution that maximized the protection of the people's legitimate rights and interests.

Article 8 of the "Regulations on the Acquisition and Compensation of Houses on State-Owned Land" stipulates: "When houses need to be acquired for public interests such as safeguarding national security or promoting the development of the national economy and society, and one of the following circumstances applies, the city- or county-level people's government shall make a decision on house acquisition." Consequently, in practice, most land acquisitions are closely tied to urgent public needs—often, even before compensation agreements are reached, the land has already been occupied by administrative authorities for the construction of public facilities. Therefore, if the land acquisition decision were revoked, it could cause significant harm to the public interest. In such cases, courts must balance the protection of public interests with finding alternative avenues to address the rights and interests of the parties directly affected by the administrative action. For instance, in Case No. (2019) Supreme People's Court Xing Pei Shen 51, the Zouping County Government proceeded to construct the South-to-North Water Diversion Project’s Eastern Line Phase I Extension and Supporting Facilities on the occupied land, aiming to resolve water supply issues for industrial use in Zouping County as well as ensure drinking water safety for residents in several townships. Notably, substantial construction funds had already been invested, and the project was nearly completed. The Supreme People's Court ruled as follows: 1. The land involved no longer holds the possibility of being restored to its original state; 2. Revoking the challenged administrative action would inflict severe damage on the broader public interest. Consequently, while affirming that the Zouping County Government’s act of acquiring the land without prior approval was unlawful, the court ordered the county government to retroactively complete the necessary procedures for land acquisition. Additionally, to better protect the rights of the applicant seeking retrial, the court urged relevant authorities to promptly notify, in writing, those who have yet to receive their compensation payments about the applicable legal grounds and specific amounts owed. If these individuals continue to refuse to collect their payments, the court directed that deposit procedures be carried out according to law. Meanwhile, the Zouping County Government was also instructed to expedite its obligation to submit the land acquisition proposal for approval and, upon receiving the requisite approval, to properly manage all subsequent matters related to the acquisition process.

Of course, personal interests and public interests do not necessarily conflict. When reviewing such cases, courts should also consider the following aspects from the perspective of balancing competing interests: First, they must determine whether satisfying the public interest inevitably requires sacrificing the specific individual’s personal interests. Second, they need to assess whether the potential public benefits resulting from the demolition are sufficient to justify compulsory eviction—specifically, a clear prioritization of the relative importance of public versus private interests in this particular case is essential. Finally, for the parties involved, the court should evaluate whether the government’s decision also provides them with fair compensation, all while ensuring that consent is obtained at the "least possible cost."

In land acquisition compensation practices, administrative authorities may substitute market-based acquisition methods for formal administrative expropriation, or even secretly entrust other social organizations to carry out demolition activities. As a result, when the administrative counterpart files an administrative lawsuit, the authorities might argue that the plaintiff does not meet the eligibility requirements for filing suit. However, whether it involves the expropriation of rural collective land or buildings on state-owned land, forced relocation, revocation of state land-use rights, or subsequent collection of land transfer fees—these actions all fall squarely within the statutory powers of the government and its functional departments. Therefore, the demolition of legally constructed buildings should first be presumed to be an act of administrative enforcement, rather than being deemed as a demolition carried out by a private civil entity.

The current system of collective land acquisition is essentially the state exercising its power to acquire land for public interest purposes, accompanied by legally mandated compensation. Throughout this entire process, administrative authority is consistently at play. Regarding the issue of statutory authority for forcibly demolishing lawful structures during rural collective land acquisition, such matters should be determined in accordance with existing and valid laws on land management, relevant administrative regulations, and judicial interpretations. In cases where the municipal or county-level people's government has not established specific provisions regarding the entity responsible for compensation and resettlement, the administrative authority vested with land management becomes the competent body authorized to demolish lawful buildings within the acquisition zone. Wherever administrative authority lies, so too do corresponding obligations—and thus, accountability. Therefore, enforcing the forced demolition is not only a statutory duty that the land administration department must carry out but also a legal obligation it must fulfill, representing its inherent responsibility. Moreover, absent any enabling legal provisions explicitly authorizing the transfer of these clearly defined administrative enforcement powers to other entities, the land administration department remains the sole authority empowered to execute such actions under the law. In administrative litigation arising from the forcible demolition of lawful housing during legally approved land acquisition procedures, the land administration department should initially be presumed to be the proper defendant—unless contrary evidence emerges or a final, binding court ruling effectively refutes this presumption.

The administrative aspect of land acquisition compensation is quite prominent, and many of the issues involved fall outside the jurisdiction and competence of people's courts to adjudicate. Therefore, administrative agencies should pay close attention to risk prevention—both before and during the process—to avoid disputes. Specifically:

The "Land Management Law of the People's Republic of China" excepts in Land Compensation Fee In addition to stipulating provisions regarding resettlement subsidies, other aspects are specifically regulated by each province, autonomous region, and municipality directly under the central government. However, sometimes the authorized agencies further delegate this power to lower-level governments. For instance, in the aforementioned case No. (2020) Supreme People's Court Administrative Reexamination No. 38, the specific compensation standards were actually set by the municipal government. In this case, a mismatch emerged between the monetary compensation criteria and the property rights exchange standards. According to Article 10 of the "Legislation Law of the People's Republic of China," authorized agencies must strictly exercise their powers within the scope and for the purposes explicitly granted to them. Therefore, these agencies are prohibited from transferring such authority to any other body, as doing so could result in grassroots governments and relevant departments—lacking the legal right to establish compensation standards—issuing administrative documents, orders, or notices that effectively dispose of both collectively owned and privately held properties belonging to farmers. At the same time, city and county people's governments must cultivate a sense of unified responsibility and accountability, firmly rejecting any attempt to evade legal liability for unlawful forced demolitions by merely delegating authority through administrative channels. Moreover, unless there are special statutory provisions governing the entities responsible for compensation and resettlement, the administrative power to demolish lawful structures within the expropriation zone inherently rests with the land administration authorities. Without explicit authorization under applicable laws, the land administration authorities have no legal basis to further delegate their clearly defined administrative enforcement powers to other entities.

In China, land is categorized into state-owned land and collectively owned land. Due to these differing land types, the expropriation procedures applied by administrative authorities when carrying out land acquisition are governed by separate laws and regulations. The expropriation of houses located on state-owned land is… The Expropriation of Collective Land Although both involve expropriation, according to China's laws and regulations, there are clear distinctions between them in terms of the expropriating entity, the object of expropriation, the expropriation procedures, and the content and methods of compensation and resettlement. From the perspective of the expropriating entity, for housing on state-owned land, the decision to expropriate is made by the municipal or county-level people's government; whereas for collective land, expropriation requires approval from either the provincial-level people's government or the State Council, after which the municipal or county-level government issues a public announcement and takes charge of the implementation process. In terms of the object of expropriation, housing on state-owned land targets the buildings themselves, with the corresponding land-use rights also being expropriated simultaneously—this is often summarized as "the land follows the house." In contrast, expropriation of collective land focuses on the land itself, and any structures built on it are reclaimed along with the land—commonly described as "the house follows the land." Thus, there is no scenario where only the building is expropriated without also taking the land into account. As for the expropriation procedures, housing on state-owned land primarily follows the procedures outlined in the "Regulations on the Expropriation and Compensation of Houses on State-Owned Land," while expropriation of collective land adheres mainly to the procedures stipulated in the "Land Management Law of the People's Republic of China" and its implementing rules. Finally, regarding the content and methods of compensation and resettlement, expropriation of housing on state-owned land typically involves determining the value of the property through appraisal, followed by compensation based on the items specified in Articles 17 and 25 of the "Regulations on the Expropriation and Compensation of Houses on State-Owned Land." In contrast, collective land expropriation encompasses not only land compensation fees but also other related aspects such as resettlement arrangements and support measures. Relocation Allowance , compensation standards for ground attachments and young crops, as well as housing resettlement measures. Therefore, when administrative agencies carry out land acquisition targeting different subjects, they should distinguish the nature of the land and apply the appropriate acquisition procedures accordingly.

Article 12, Paragraph 2 of the "Provisions of the Supreme People's Court on Several Issues Concerning the Adjudication of Administrative Cases Involving Rural Collective Land" states: "When rural collective land is expropriated without providing resettlement and compensation for houses and other immovable properties located on the land—particularly if the area where the houses are situated has already been incorporated into an urban planning zone at the time of compensation—the people's court should generally support the land rights holders' request to apply the compensation standards applicable to state-owned land. However, any land compensation already received must be deducted from the total amount." This provision reflects the approach of conducting land expropriation procedures in accordance with those typically applied to state-owned land. On one hand, this judicial interpretation primarily addresses situations where, due to reasons attributable to administrative authorities, timely compensation for houses and immovable properties on collective land has not been provided during ongoing expropriation processes—and when the affected areas have already been integrated into urban planning zones. The intent behind this rule is to ensure that farmers whose land is expropriated fully benefit from adequate compensation protections. On the other hand, while the provision allows for the application of state-owned land compensation standards during the actual compensation process, the underlying expropriation procedure itself must still follow the legally mandated framework for collective land expropriation.

Compensation and resettlement for land acquisition or requisition by the state, as a form of administrative compensation, should adhere to the principle of using land transaction and circulation prices as the benchmark for calculating compensation related to land property rights, thereby ensuring fairness in the compensation process. Under a market economy, when the government restricts or even deprives farmers of their private property rights for the sake of public interest, it assumes the responsibility and obligation to fairly and reasonably compensate farmers for their property losses—meaning that land owners and users must receive "fair market value" as "just compensation."

Regarding the issue of "fair and reasonable compensation." According to Article 48, Paragraph 1 of the Land Management Law of the People's Republic of China: "Land acquisition shall be accompanied by fair and reasonable compensation, ensuring that the original living standards of farmers whose land is acquired do not decline and that their long-term livelihoods remain secure." Meanwhile, Article 20 of the Urban Real Estate Management Law of the People's Republic of China stipulates that, when necessary for the public interest, the land use rights legally obtained by land users may be reclaimed ahead of schedule in accordance with legal procedures, with corresponding compensation provided based on the actual years of land use and the specific conditions of land development. Additionally, Article 8 of the Opinions of the CPC Central Committee and the State Council on Improving the Property Rights Protection System and Safeguarding Property Rights in Accordance with the Law emphasizes that property expropriation and requisition must adhere to the principle of timely and reasonable compensation, ensuring that those subject to such measures receive fair and equitable redress.