Lot Entitlements Issues Paper Queensland


Bodies corporate have long struggled with the complex issue of lot entitlements. Given their importance in allocating expenses, liabilities, and voting rights to lot owners, it is critical that they are appropriately set.

But doing that is far from easy, as all those in the body corporate industry know. Over the years there have been many attempts to work out the best way to set and adjust lot entitlements.

A brief summary of the complex history is set out below:

  1. From 1965 to 2003, lot entitlements in Queensland were set by developers, usually on the basis of unimproved or market value.
  2. In 1997, the equality principle was introduced for adjustment orders (lot entitlements should be equal except to the extent to which it is just and equitable in the circumstances for them not to be equal).
  3. In 2003, it became a requirement for developers to use the equality principle when deciding lot entitlements.
  4. In 2011, the relativity principle was introduced for new schemes. This allowed contributions to be set in a way that clearly demonstrates the relationship between the lots in the scheme by reference to important factors.
  5. In 2011, a reversion process was introduced which allowed an individual owner to make a motion at a general meeting to overturn an adjustment order made by a court, specialist adjudicator or tribunal, thus returning to the original lot entitlements.
  6. In 2013, an amendment removed the 2011 reversion process, stopped reversions that were underway and provided a mechanism for schemes which had been subject to a reversion order to revert back to the last adjustment order made by an adjudicator, tribunal or court.

Understandably, the number of changes made to lot entitlement requirements has resulted in significant financial and social issues for community titles schemes. Particularly, the 2011 and 2013 amendments which respectively allowed individual owners to overturn an adjustment order, and then reverse that reversion, have been met with intense criticism.

At the time of the 2013 Amendment, the Attorney-General noted that it was limited in focus and a review was needed to get the balance right.

An Issue Paper has been released which is the first step in that review.

The paper provides a summary of the complex history of lot entitlements, provides an insight into the issues surrounding lot entitlements, and also provides 60 questions for public comment.

Submissions close on the 14th March 2014, with a report from QUT professors due to the government by mid year.

You can read the Issues Paper in full here http://www.justice.qld.gov.au/__data/assets/pdf_file/0010/224875/property-law-review-ip2-lot-entitlements-bccm.pdf



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