Change to Body Corporate Lot Entitlements

On 19 March 2013, the Newman government introduced changes to Body Corporate lot entitlements legislation. To understand the significance of these changes, the history of lot entitlements should be noted.

From 1980, lot entitlements were for the most part regulated by the Building Units and Group Titles Act (“BUGTA”). There was no set basis for calculation of lot entitlements, however most developers calculated lot entitlements using the proportionate value of each lot by default.

In 1997, the Body Corporate and Community Management Act (“BCCMA”) came into force. The BCCMA required that lot entitlements must be equal, except to the extent to which it is just and equitable for them not to be equal. This presumption favoured the wealthy because the owners of larger more expensive apartments were obliged to pay the same Body Corporate levies as the owners of apartments of lesser value.

Emotions run high when it comes to Body Corporate lot entitlement disputes. In 2009, a bullet was fired at a Surfers Paradise penthouse amid a Body Corporate fee dispute. This shooting incident followed a bid by wealthy apartment owners in a Surfers Paradise highrise building to have their Body Corporate levies halved and the fees of residents on lower floors doubled.

In 2011, a Bill was passed that allowed anyone affected by the changes imposed by the BCCMA to re-adopt the calculation of lot entitlements based on the proportionate value of each lot.

This favored the owners of lesser value lots who could force bodies corporate to shift larger entitlements to owners of higher value lots. Naturally, the owners of lots who had increases in levies charged back at these adjustments with a vengeance which resulted in the owners of expensive units experiencing increases in Body Corporate levies.

On 19 March 2013, the Body Corporate & Community Management Amendment Bill 2012 was passed. This Act allows owners who had entitlements reversed under the 2011 amendments to be adjusted back to the 1997 system of entitlements being equal and only different in limited circumstances. This has upped the stakes particularly for owners on low and fixed incomes who have heavily criticised the move. Many lower income unit residents, pensioners and people on fixed income will have their lives made much more difficult and some will be forced out of their homes.

At the time the Body Corporate & Community Management Amendment Bill 2012 was announced, the Attorney General confirmed that there is going to be a full review of the BCCMA so once again there will be more changes to come.