2 ADJUSTINGTODAY.COM Under the condominium formof ownership residents have a direct property interest in the units they occupy (or rent to others); they can sell those units or bequeath them to heirs, subject to conditions in the condominiummaster agreement and community by-laws, which are themselves subject to state statute. The condominium structure itself — including its common areas— is owned collectively by the unitowners through a condominium association run by a board representing the unit-owners. Ownership Interests The precise delineation of ownership rights in a condominium community —where an association’s ownership ends and a unit-owner’s begins — is established in the master agreement or “declarations.” Processes and procedures for regulating the association and individual unit-owners are generally established in a condo association’s bylaws. Of those two documents, the declarations are usually primary; any disagreement or inconsistency between the two will usually be resolved under the terms of the declarations. There are essentially three variations of ownership in condominium communities. Under a “bare walls” approach the condominium association owns only the unadorned, load-bearing walls, floors and ceilings, plus plumbing, heating, air conditioning and electrical systems that serve all units. Anything added or attached to the unit by the owner (shelving, wallpaper, wall-to-wall carpeting, hanging lamps, etc.) is the property of the unit-owner andmight not be insured under the association’s property insurance. As an alternative to the bare walls approach, a master agreement may designate the association to be the owner of permanent alterations and improvements within dwelling units. The manner in which condominium agreements assign property ownership and insurance responsibilities has a direct impact on the application of insurance coverage. Inmany cases, the wording of condominium community documents can serve to trigger or deny coverage under a policy. • How, at the same time, to provide funding for increased cleaning and sanitizing service; • How and under what conditions to regulate the use of hallways, elevators and other common areas; • How and under what conditions to restrict the use of common facilities such as pools, exercise rooms and lounges; and • Whether and how to regulate the behavior of residents, such as imposing requirements to wear face coverings and/or restricting the number of guests in dwelling units. All this and more came at a time when residents and managers of housing complexes continued to grapple with complex and evolving risk and insurance challenges unique to multi-unit housing. Variety of Arrangements Most people are familiar with the three basic types of multi-family housing arrangements in the U.S. Under a landlord-tenant arrangement the owner of a residential structure owns all of the building property, including the dwelling units. A tenant leases the right to use a dwelling, but generally has no property interest in the structure or its components. Even if a tenant installs permanent carpeting, cabinets, shelving or other fixtures, those usually become property of the building owner. More often than not, leased apartments will come equipped with major appliances, such as stoves, refrigerators and dishwashers, which are personal property of the building owner. Although it’s a common practice, providing use of personal property is not an inherent part of the landlord-tenant relationship. In some cases tenants may purchase their own appliances and take themwhen they move. While a residential tenant has a use interest in a leased apartment, a tenant’s property interest generally entails only his or her movable personal property, such as furniture, clothing, cookware, athletic equipment, electronic devices, etc.
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