Understanding Lot Entitlements in Body Corporate
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If you own a unit, townhouse or apartment in a community titles scheme, you may have seen the term lot entitlements in your body corporate documents or levy notices and wondered what it means.
In simple terms, lot entitlements help determine each owner’s share of certain body corporate costs. They can also affect voting value in limited situations, such as when a poll is requested for an ordinary resolution.
These entitlements are recorded in the scheme’s Community Management Statement, often referred to as the CMS. Most community titles schemes have two different lot entitlement schedules:
- contribution schedule lot entitlements
- interest schedule lot entitlements
Although the names sound similar, they are used for different purposes. Understanding the difference is important because the schedule being used can affect how levies, costs and certain rights are calculated.
What are lot entitlements? In simple terms
Lot entitlements are the numbers used to work out each lot owner’s share of certain body corporate costs, assets or rights.
For example, a scheme has 10 lots. Nine lots each have 1 entitlement, while a larger penthouse lot may have 3 entitlements. This gives the scheme a total of 12 entitlements.
If a cost is divided according to that schedule of entitlements:
- a lot with 1 entitlement would pay 1/12 of that cost
- the penthouse lot with 3 entitlements would pay 3/12 of that cost
This doesn’t necessarily mean the penthouse is physically three times larger than the other lots. It simply means that, for that particular schedule, the penthouse has been allocated a larger share. This might be because it is larger, has a higher value, has different features, or places a different demand on common property or shared expenses.
The important point is that lot entitlements are not always about lot size alone. They are numbers recorded in the scheme’s Community Management Statement and used to calculate each owner’s share depending on which entitlement schedule applies.
Contribution schedule lot entitlements
Contribution schedule lot entitlements are used to calculate each owner’s share of most body corporate costs.
These costs can include expenses such as:
- administrative fund contributions
- sinking fund contributions
- maintenance of common property
- cleaning and gardening costs
- body corporate management fees
- other shared operating expenses
Contribution schedule lot entitlements are also used to calculate the value of an owner’s vote if a poll is requested for an ordinary resolution at a general meeting. In most ordinary voting situations, each lot usually has one vote. The entitlement-based voting value only becomes relevant if a valid poll is requested.
Interest schedule lot entitlements
Interest schedule lot entitlements are used for different purposes, including calculating each owner’s share of common property and body corporate assets if the scheme ends.
They may also be relevant to how some costs are shared, including building insurance in some schemes. Insurance can be treated differently depending on the type of scheme and plan format, so owners should not assume all insurance costs are shared the same way.
Where do I find my lot entitlements?
You can find your scheme’s lot entitlements in the Community Management Statement.
The CMS sets out the contribution schedule and the interest schedule for the scheme. Each lot is listed with its allocated entitlement number, along with the total aggregate entitlements for the scheme.
Why are lot entitlements different between lots?
Lot entitlements are not always the same for every lot in a scheme.
In some schemes, each lot may have equal entitlements. In others, one lot may have a higher or lower entitlement than another. This may be because the lots are different in size, value, use, layout, features or the way they benefit from or place demand on common property.
A larger penthouse or a commercial lot may have different entitlements from a standard residential lot.
The difference also depends on which entitlement schedule is being considered. Contribution schedule lot entitlements and interest schedule lot entitlements are set using different considerations under Queensland body corporate law.
Why lot entitlements matter
Lot entitlements are more than numbers in the CMS. They influence how body corporate costs are shared, how certain assets and interests are calculated, and, in some circumstances, how voting value is determined.
Understanding your scheme’s contribution schedule and interest schedule can help you make sense of your levies, understand your rights, and ask informed questions about body corporate financial decisions.
This article provides general information about lot entitlements in Queensland community titles schemes. It is not legal advice. Lot entitlement issues can be complex and may depend on the scheme’s CMS, plan type, regulation module and individual circumstances. Owners should seek professional advice about their specific circumstances.
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