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Both human activities and climate change have changed landscapes significantly, especially in coastal areas. Sea level rise and land subsidence foster tidal floods and permanent inundations, thus changing and limiting land use. Though many countries, including Indonesia, are aware of these phenomena, the legal status of this permanently inundated land remains unclear. Indonesia refers to this land legally as obliterated land. This qualification makes former landowners uncertain, as it does not recognize their previous land rights, and creates disputes during land acquisition. In view of policy pressures to develop large-scale projects, the government often fails to include obliterated land legally during land acquisition processes for these projects. This causes unfair and disputed compensation for those former landowners. Current scientific discourses do not yet address this legal quandary. This study therefore has the following three aims: (1) to describe the legal, institutional and procedural contradictions related to obliterated land; (2) to assess the validity of right of the owners whose land parcels are permanently inundated; and (3) to formulate a responsible and tenure responsive policy to deal with obliterated land. We investigate these questions for the construction of a toll road and sea embankment in Kecamatan Sayung, Kabupaten Demak involving obliterated land. We reviewed policies, regulations and documentations related to coastal land and disaster management, and the implementation of land acquisition. We used geospatial data to visualize the ways in which and locations where landscapes, land parcels and land right changed. We determined that legal uncertainty leads to policy inconsistencies in handling obliterated land, specifically during land acquisition. Additionally, former landowners suffer from the legal gaps to establish clarity of land tenure, which prevents them from receiving any compensation. We suggest a law revision that considers the social–historical aspects of land tenure when defining obliterated land. The law should also provide for a fairer and more just compensation for former landowners during land acquisition processes.