What is a Lot Entitlement?
In Queensland, lots have two entitlements – a contribution schedule lot entitlement (‘CSLE’) and an interest schedule lot entitlement (‘ISLE’). In New South Wales, lots have only one ‘unit entitlement’. These schedules determine an owner’s share of common expenses, as well as the owner’s interest in the scheme for rating and tax purposes and upon termination of the scheme.
There is frequently inequities, or perceived inequities, with respect to the allocation of entitlements between the different lots in a scheme. Similar disputes can arise in the context of building management groups and the respective proportions that each member is obliged to contribute towards the upkeep and maintenance of shared areas and shared facilities and infrastructure.
The issue of lot entitlements in Queensland has had a turbulent history, with successive governments changing the legislative principles regulating lot entitlements in 2011 and 2013. The issue of lot entitlements is highly emotive at the best of times (as they directly impact the owner’s share of contributions to the body corporate) and the changes in 2011 and 2013 simply added fuel to this fire and no doubt resulted in much unfairness, with ‘winners’ and ‘losers’ – depending on the particular circumstances of the scheme and the owners within it.
Whilst the issue is relatively stable at the moment due to on-going restrictions and limitations (since 2011) on the ability of owners to seek a review of the lot entitlements through adjudication or tribunal processes (except in specific limited circumstances), the matter of lot entitlements is an issue that is currently under review by the Queensland Government and, depending on the approach adopted, further complications and disputes could arise out of any amendment of the legislation.
Whilst adopting a new schedule of lot entitlements is difficult, it is not impossible and, in some circumstances, both necessary and appropriate. Small Myers Hughes has a wealth of experience in providing advice and resolving disputes concerning lot entitlements and can guide both bodies corporate and owners through the complexity of the law in this area.