[Direct answer]In the Beijing area, during the demolition of shops, compensation can be claimed according to law for the operational losses corresponding to the business license, the losses caused by the suspension of production and business, the relocation subsidies, and the damage to the items in the building. According to the provisions of the State Compensation Law of the People's Republic of China on administrative compensation, the illegal forced demolition that results in losses to legitimate property should be compensated; the business subject specified in the business license can provide evidence and claim compensation for the losses caused by the suspension of production and business, and the losses of equipment and inventory. The compensation for shops also involves the value of the expropriated houses, the relocation and temporary resettlement expenses. It is recommended to keep the business license, tax payment records, and evidence of the forced demolition. For more details, please refer to the following link:Legal services for land expropriation and demolition, and administrative litigation.

1. Problem background and typical scenarios

When a store is subject to expropriation and demolition, the most pressing concern for the operator is whether they can be compensated for the operational losses related to the business license. Typical scenarios include: the store being included in the expropriation due to a major project, with compensation negotiations failing and leading to forced demolition; compensation being reduced or denied on the grounds of "unlicensed operation" or "illegal construction"; the business license indicating the store's operations, but the house ownership having legal defects; and equipment, inventory, and customer resources being lost due to forced demolition. Many operators overlook the need to provide evidence for the business license and tax payment certificates, thereby missing out on compensation for production and business suspension losses. For cases involving property value assessments, relevant evidence can be combined with the business license and tax payment certificates to support claims.Real estate sales and construction project services.

II. Key points of contention

There are three key points. Firstly, the subject of compensation and its prerequisite: Whether the forced demolition is illegal is the prerequisite for initiating state compensation. Secondly, the scope of losses: Whether the losses corresponding to the business license, such as the suspension of production and business, the relocation of equipment, the destruction of inventory, and the decoration, should be included. Thirdly, the standard of proof: The burden of proof for the actual operation and the amount of losses lies with the business operator. Administrative authorities often claim that the house is an illegal construction and refuse to provide compensation. There are obvious differences between the two parties on the scope of legal property and the reliance interests, which need to be clarified by evidence.

III. Professional analysis by Henglue Lawyers

In connection with a national compensation case handled by our firm involving the use of demolition of illegal buildings to facilitate demolition and relocation. Chen * from Jiangxi had his legal house included in the relocation plan of a cultural industry park. Due to disagreements over compensation, no agreement was signed. On March 29, 2022, when the whole family was in quarantine in another city, the town government forcibly demolished the house on the grounds that it was an illegal building. Chen * entrusted Beijing Henglu Law Firm to handle the case.Wu JianiThe lawyer (practice license number: 11101202011245064, subject to the document issued by the judicial administrative organ) acts as the agent. The lawyer confirms that the subject of the forced demolition is illegal and identifies the reliance interest: Chen * submitted the personal building land approval form and the post-approval public announcement board. Although he did not have a license, he had reason to believe that he had been approved, forming a reliance interest in administrative law. The lawyer applied for an evaluation of the market value of the house, decoration, and interior items. The court adopted the opinion, confirming that the forced demolition by the town government on March 29, 2022 was illegal, and awarded compensation for various losses totaling 952,083 yuan. This case shows that even if the house is identified as an illegal construction, the legitimate property such as building materials and the reliance interest still belong to the legitimate rights and interests of state compensation. For cases involving compensation execution, it can be followed up accordingly.Creditor-debtor relations and enforcement case services.

IV. Practical suggestions and legal basis

The legal basis is the provisions of the "State Compensation Law of the People's Republic of China" (amended on October 26, 2012, and implemented on January 1, 2013) regarding the compensation for damages caused by the illegal exercise of power by administrative organs and their staff members, and the scope of compensation includes direct losses; the provisions of the "Regulations on the Acquisition and Compensation of Houses on State-Owned Land" (implemented on January 21, 2011) regarding the value of the acquired houses, relocation and temporary resettlement, and compensation for losses of production and business suspension; Article 13 of the "Administrative Enforcement Law of the People's Republic of China". Practical suggestions: Store operators should keep their business licenses, tax payment records, and financial statements; apply for an evaluation before forced demolition; and request confirmation of the illegality of forced demolition and claim compensation at the same time. For losses related to business operations, reference can be made to the relevant provisions.Business and contract dispute services for enterprises.

5. Henglu Law Firm's Reminder

Shop operators should keep their business licenses, tax payment certificates, lease contracts, and purchase invoices as core evidence for a long time. After the forced demolition occurs, they should immediately record the scene, call the police, and apply for a property evaluation. For cases where the government uses the pretext of demolishing illegal buildings to forcibly evict residents, or demolishes buildings before the appeal and litigation period has expired, the affected parties can sue to confirm the illegality of the demolition and claim state compensation. If there is a public announcement of approval and the affected parties have developed a legitimate expectation, they may still be eligible for compensation even if they do not have official certificates. In such disputes, it is recommended to consult a professional lawyer as soon as possible. They can also seek assistance from legal aid organizations or other professional institutions.Special services and other case services.

VI. Frequently Asked Questions

Q1: Can I win the compensation for the loss of the business license due to the demolition of the store?

Whether you can get compensation does not depend on the slogan, but on whether the forced demolition is illegal and whether the evidence of the operating losses is sufficient. If the forced demolition procedure is illegal and you can prove the actual operation and losses, the court will usually support the direct losses such as production and business suspension, equipment and inventory; but it must be based on the confirmation of illegality and evidence. No one can guarantee the result unilaterally.

Q2: What evidence is required to claim business license operating losses?

The original and duplicate copies of the business license, tax and social insurance records of the past three years, financial statements and bank statements, inventory and equipment lists and invoices, lease contracts and rental receipts, images of the forced demolition site, and appraisal reports. The evidence should be organized around the three key elements of "actual operation - amount of loss - causality", and all of these elements are indispensable.

Q3: How much are the attorney fees and litigation costs for disputes over compensation for the demolition of shops?

The litigation fees shall be charged based on the amount of compensation requested in accordance with the "Measures for the Payment of Litigation Costs", and shall be borne by the losing party. The attorney's fees shall be negotiated based on the circumstances and stages of the case, and the specific fees shall be subject to the terms of the retainer agreement. It is recommended to claim both the confirmation of the violation and the compensation together, so as to reduce the cost of protecting rights and clarify the scope of fees in advance.

Q4: How long does it usually take to compensate for the forced demolition of shops?

Confirm that the first-instance litigation for challenging illegal demolition shall be completed within six months, and the summary procedure within 45 days; the possible duration of state compensation may range from several months to one year. The timeframes will be extended if there are assessments or evidence collection involved. It is recommended to apply for evidence and property preservation in the litigation process to accelerate the recovery of funds and prevent the transfer of property.

Q5: If my shop is facing forced demolition, what should I do first?

The first step is to keep the business license, tax payment and operation certificates, and make a comprehensive video recording of the store and inventory; the second step is to call the police and identify the responsible party when the demolition is carried out; the third step is to file a lawsuit within the statutory time limit to confirm that the demolition is illegal; the fourth step is to apply for an evaluation and claim compensation for production and business suspension and property losses at the same time, and consult a lawyer as soon as possible.

The above Q&A is mainly based on the judicial practice in the Beijing area. There may be differences in the adjudication guidelines in different regions. It is recommended to consult a professional lawyer based on the specific circumstances of the case.

If you are facing similar problems, it is recommended that you consult a professional lawyer as soon as possible with the relevant evidence materials, so as to avoid missing the statutory time limit. →Land expropriation and demolition legal services·Attorney Wu Jiani·Beijing Henglu Law Firm

Disclaimer: This article is compiled based on the current effective laws and regulations and public adjudication rules, and is for general reference only. It does not constitute a formal legal opinion on specific cases. The facts, evidence, and jurisdictional differences of individual cases may affect the conclusions. If a dispute arises, please consult a practicing lawyer in time.