[Direct answer]In the Beijing area, the situation varies, but "unlicensed" does not necessarily mean no compensation. If the ownership is legal but the procedures are incomplete (historical legacies, early-stage construction, or government tacit approval of investment attraction), the demolition should be compensated according to the value of the legal building—including the replacement cost, losses from production and business interruption, and relocation and temporary resettlement costs. Only truly illegal and irreversible unauthorized construction may not be compensated. In practice, the most common injustice is to directly label "unlicensed" as "unauthorized construction" and handle it with no compensation. Countermeasures: First, fix the construction era and operational evidence, then seek redress through government information disclosure, administrative review, and administrative litigation, and if necessary, claim state compensation.

I. Problem background and typical scenarios

The old factory building was built in the 1990s. At that time, the village agreed to it and the town collected taxes, but no property rights certificate was issued. Twenty years later, when the expropriation project came along, a "Identification of Illegal Construction" document reduced the value of the multi-million-yuan factory building to zero compensation. What the business owners were most aggrieved about was: it wasn't that I didn't want to get a certificate, but that the policy at that time didn't allow it. The core of such cases is not to lament the past, but to use evidence to prove the reasons for not having a certificate and the actual value of the building.

II. Key points of contention

First, the evidence of the reasons for the lack of permits, the historical formation and the government's recognition of the determination; second, the legality of the procedure for identifying illegal construction and the review of the decision to demolish within a specified time limit; third, the calculation of the scope of compensation, the replacement cost and the loss of production; fourth, the concurrence of the procedures for ordering demolition within a specified time limit and compensation for expropriation.

III. Professional analysis by Henglue Lawyers

The first layer: Qualitative analysis precedes quantitative analysis. When receiving the expropriation decision, don't immediately discuss compensation amounts. First, review the classification of your factory building by the authorities—whether it is classified as a legal building subject to compensation, an unregistered building subject to discretionary compensation, or a demolition-free illegal building. These three classifications correspond to three different outcomes. If the classification is incorrect, first appeal or sue to revoke the illegal building determination, then negotiate the compensation amount. The second layer: Organize evidence. This includes evidence of the construction era (village committee certificates, payment receipts from that year, old photos, aerial maps), government-approved evidence (investment promotion agreements, rental collection records, facts of past remediation that were not addressed), and operational evidence (tax payments, electricity bills, employee payrolls). These three sets of evidence collectively help reconstruct the truth of the "historical legacy." The third layer: Reference to practical cases. In a land expropriation rights protection case handled by He Ningning, a lawyer from Beijing Henglue Law Firm, villager Liu * * * *'s legal building was included in the expropriation scope but received no compensation. Through parallel and layered pressure involving government information disclosure, administrative appeals, village affairs transparency, and requests to fulfill resettlement and compensation obligations, the lawyer eventually secured an agreement with the district expropriation office and the full payment of 309,000 yuan in expropriation compensation. The habitual practice of "providing no explanation if procedures are incomplete" can be corrected when confronted with evidence and procedures. The same applies to cases involving unlicensed factories: first use procedures to extract legal basis, then negotiate substantive compensation. The fourth layer: Procedural defense. In the event of a deadline-based demolition order or forced demolition, apply for a review within 60 days and file a lawsuit within six months, simultaneously applying for a stay of execution. If forced demolition has already occurred, immediately report to the police to preserve evidence and file a lawsuit seeking confirmation of illegality and state compensation. The timeline itself serves as evidence, and the earlier it is fixed, the more advantageous it is. This case was handled by Beijing Henglue Law Firm.He NingningThe attorney (practice certificate number: 11101202511925103, subject to the certificate issued by the judicial administrative organ) acts as the agent.

IV. Practical Suggestions and Legal Basis

The first step is to take photos of any documents received and keep them on hand, and never sign blank agreements under pressure. The second step is to systematically organize the historical evidence chain of construction and operation. The third step is to apply for information disclosure to obtain the expropriation documents and compensation plans. The fourth step is to challenge the determination of illegal construction and compensation decisions through legal review or litigation, and to claim state compensation for forced demolitions. The main legal basis includes the relevant provisions of the Land Administration Law of the People's Republic of China (amended in 2019), Article 24 of the Regulations on the Expropriation and Compensation of Houses on State-Owned Land (implemented on January 21, 2011), which concerns the investigation and handling of unregistered buildings, and Article 28 on enforcement provisions; Article 13 of the Administrative Enforcement Law of the People's Republic of China (implemented on January 1, 2012). Specific applications shall be subject to the currently effective regulations.

5. Henglu Law Firm's Advice

The compensation dispute for unlicensed factories depends on two things: evidence of the reasons for the lack of a license, and the procedural battle over the classification of the unlicensed structure—first removing the label of "unlicensed construction," then discussing the amount of compensation. For cases involving the demolition of unlicensed factories and the determination of whether they constitute unlicensed construction, the following approach can be adopted:Land expropriation and demolition, and administrative litigationObtain a comprehensive solution for the service; for cases involving forced demolition and state compensation, it can be combined with other measures.Special servicesPlate; for matters involving factory property rights and contracts, you may refer to the relevant provisions.Business and contract disputes in enterprisesColumn; for other disposal matters, you can consult the corresponding department of Henglue's administrative team.

VI. Frequently Asked Questions

Q1: Is there no compensation at all for factory buildings without property ownership certificates?

No. If an unregistered building is identified through investigation as either legal or a historical relic, it shall be compensated in accordance with the law; if it is directly treated as an unauthorized construction without any compensation, it can be rectified through appeal and litigation.

Q2: How to prove that the factory building was formed historically?

The village residence certificate, the payment receipts of that year, aerial photographs and old photos, investment promotion documents, and tax payment records over the years form a complete chain of evidence that spans different time periods and is recognized by the government.

Q3: What level of compensation can I expect to receive?

It shall be accounted for separately according to the reset price, the losses from production and business suspension, and the relocation fees. The standards vary greatly from region to region. The key is to check the local compensation plan and assessment report item by item.

Q4: Is it still possible to overturn the decision that a building is deemed illegal?

Yes. The review is conducted from three aspects: the authority of the identifying entity, the notification of procedures, and the factual basis. If the determination of the violation is found to be illegal, the party concerned may apply for reconsideration or file a lawsuit to revoke it. The time limit for reconsideration is 60 days from the date of becoming aware of the determination, and the time limit for litigation is six months.

Q5: What should I do if the factory building is forcibly demolished?

Immediately call the police and secure the evidence at the scene. After confirming that the forced demolition is illegal through legal proceedings, claim state compensation, which should cover the value of the building and the losses of movable property inside the house.

The above Q&A is mainly based on the judicial practice in the Beijing area. There may be differences in the adjudication opinions 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 evidence materials, to avoid missing the statutory time limit. →Land expropriation and demolition legal services·Beijing Henglu Law Firm

Disclaimer: This article is compiled based on the current effective laws and regulations and publicly available 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. In case of disputes, please consult a practicing lawyer in time.