In some cities developers are maximizing the use of property by building multi-family housing, often high-rise condominiums as well as low-rise, garden-style buildings.

In suburban areas real estate development is taking shape in the form of townhouses with condominium ownership.

Every residential condominium project has three distinct features:

• Dwelling units: There is a single housing unit with each one exclusively owned by the persons purchasing it.
• Common elements: There are hallways, stairs and elevators, for example, jointly owned by all the unit owners as tenants in common, with each unit owner’s interest measured by the proportionate value the unit bears to the total value of all units.
• An association or administrative framework: There is an association, usually headed by a board of managers made up of unit owners, established to manage the common areas and the assets of the association, as well as set out the rights and obligations of the unit owners.

The key to understanding insurance coverage for the condo association — not the individual unit owners — is to be able to clearly draw lines around ownership as well as around who is covered, what is covered, where coverage applies, when it applies and how it applies. It’s all complicated by state regulation of condominium development and insurance law.