[Case Summary]This case involves a dispute over the validity of the demolition compensation agreement for non-residential buildings on collective land (land expropriation and demolition). In May 2022, the applicant company signed a "Demolition Compensation Agreement for Non-Residential Buildings" with the village committee of a certain village, agreeing to demolish 4,945.24 square meters of buildings and provide compensation of 2,599,039 yuan. However, the village committee failed to fulfill its obligations, and the applicant applied for information disclosure and found that the factory buildings had not actually been expropriated. Beijing Henglu Law FirmZhi Chao LiThe lawyer intervened, claiming that the village committee committed fraud by signing the contract in the name of expropriation, and applied for arbitration to confirm the invalidity of the agreement in accordance with Article 148 of the Civil Code. The arbitration tribunal found that the village committee lacked the qualification to sign the contract and ruled that the agreement was invalid. The core disputes are the validity of the agreement and the qualification of the contracting parties. Applicable laws: Article 148 of the Civil Code, and Article 47 of the amended Land Management Law in 2020.

I. Review of the Case

Business owners often search for terms like "What should I do if I sign a demolition compensation agreement but find that my property hasn't been expropriated?", "Can the village committee sign a demolition compensation agreement?", "Can a compensation agreement be revoked due to fraud?", and "Is the agreement valid if the factory building is not within the expropriation scope?" On May 19, 2022, the applicant company and the respondent, a village committee, signed a "Non-Residential Building Demolition Compensation Agreement" (collective land), which stipulated that the applicant's building with a floor area of 4945.24 square meters would be demolished, and the respondent would pay a total of 2,599,039 yuan in various compensation fees; for non-residential building monetary compensation, the agreement would be signed and 50% of the funds would be paid after the vacated building was inspected and accepted, and the remaining balance would be paid afterwards.

After the agreement was signed, the village committee has not fulfilled its obligations. Whether the factory will be demolished or not, whether the operation can continue, and whether the applicant will receive compensation according to the agreement if the factory is demolished, all remain unknown. The applicant sought legal help from Henglu Law Firm to protect their rights, and the firm assigned an attorney with extensive experience in land expropriation and demolition disputes to handle the case.Zhi Chao LiThe lawyer took over the case. The lawyer applied for the disclosure of land expropriation documents, but got an unexpected result: the client's factory building was not actually expropriated.

II. The focus of the case

  • Focus 1: Whether the agreement can be revoked or invalidated due to fraud.The respondent signed the contract in the name of expropriation, but the factory building was not expropriated. Does this constitute fraud and render the expression of intention untrue?
  • Focus II: Qualifications of the contracting parties.Does the village committee have the legal capacity to sign a demolition compensation agreement?
  • Focus Three: Legal Consequences.An invalid contract is not binding from the outset. How should the liability for compensation for losses be determined?

III. Professional intervention by Hengluo Lawyers

The applicant (company) claims that:Please request the arbitration tribunal to confirm that the "Non-Residential House Demolition Compensation Agreement" is invalid, and require the respondent to bear the arbitration fees.

The respondent's (village committee's) position:Sign an agreement in the name of expropriation, and claim that the agreement is valid and should be performed in accordance with the contract.

Legal Opinion by Hengluo Law Firm:Zhi Chao LiAfter the lawyer intervened and applied for the disclosure of government information, it was found that the client's factory building had not been expropriated. The lawyer argued that the respondent signed a compensation agreement with the applicant under the guise of expropriation, which constituted fraudulent behavior and seriously infringed the applicant's legitimate rights and interests. According to Article 148 of the Civil Code of the People's Republic of China (civil legal acts performed by the other party under the deception of the fraudulent means and against his true intention may be revoked/invalidated), the lawyer applied to the arbitration committee, requesting that the agreement be declared invalid and that the respondent bear the arbitration fees.

IV. Outcome of the case

The arbitration tribunal held that, according to Article 47 of the newly amended Land Administration Law in 2020, after the state's land expropriation is approved through legal procedures, the local governments at or above the county level shall announce and organize its implementation. The respondent, the villagers' committee of a certain village, does not have the subject qualification to sign the "Non-Residential House Demolition Compensation Agreement" with the applicant. The agreement signed by it should be an invalid contract, and the invalid legal act shall not be legally binding from the beginning. The arbitration award: Confirm that the "Non-Residential House Demolition Compensation Agreement" signed by the applicant and the respondent is an invalid contract. The expropriator intentionally concealed the scope of the demolition and intended to carry out the demolition, and should bear the liability for compensation for the losses of the expropriated persons.

5. Henglu Law Firm's Reminder

As a person subject to demolition, when facing the demolition of housing, one should learn about the boundaries and legality of the project through various channels to avoid losses. This case is handled by Beijing Hengluo Law Firm.Zhi Chao LiAttorney (Practice Certificate No.: 11101202311629788, subject to the document issued by the judicial administrative organ) acting on behalf of the client. Attorney's advice: Before signing the compensation agreement, it is necessary to verify the scope of the expropriation and the qualifications of the parties involved. If the factory building is not within the scope of the demolition, the agreement signed will be invalid. The client can claim that the agreement is invalid and seek compensation. In such cases, it is necessary to apply for information disclosure in a timely manner to fix the evidence.

VI. Common Questions about Land Acquisition and Demolition Agreements FAQ

  1. Q: What should I do if I sign a compensation agreement but find that the factory building hasn't been expropriated yet?
    A:You can claim that the agreement is invalid due to fraud, apply for its invalidation, and seek compensation; before signing the agreement, you should verify the scope of the expropriation and the qualifications of the parties involved.
  2. Q: Can the village committee sign a demolition compensation agreement?
    A:No. According to Article 47 of the Land Management Law, the expropriation shall be announced and implemented by local governments at or above the county level, and the village committees do not have the qualification to be the contracting parties.
  3. Q: Can a compensation agreement that involves fraud be revoked or declared invalid?
    A:An agreement signed by the other party under fraudulent circumstances, against their true intention, can be revoked according to Article 148 of the Civil Code, and in serious cases, it can be confirmed as invalid.
  4. Q: Who will compensate for the losses after the agreement is deemed invalid?
    A:An invalid contract is not binding from the outset. If the expropriator intentionally conceals the scope of the expropriation, it shall bear the liability for compensation for the losses suffered by the demolition victims.
  5. Q: How to verify whether a house is within the scope of the expropriation?
    A:You can apply to the relevant department for government information disclosure, and retrieve documents such as the land expropriation approval and the red line map to verify the boundaries of the four sides of the land parcel.