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Level 3 in Condo

It is probably a very unlikely occurrence since only two condominiums in the building would be required to reach the 50% threshold when only one is altered. Thus, you would end up with a two-family dwelling exempt from the IEBC. However, the IEBC can still be used per the Exception to IEBC Section 101.2.

However, if the IEBC is used and the two condos are of equal size, then some work must be done in the common areas to exceed the threshold. If they were of unequal size, the alteration of the larger unit would exceed the threshold and push it into a Level 3 Alteration. (That is, if the designer decides to use the work area compliance method; otherwise, it would just be an alteration using the prescriptive compliance method or performance compliance method.)

I guess there is a possibility that there is one very large unit (more than 50% of the building area) and a few smaller units that would take it out of the two-family dwelling unit category.

Edit: And what Yankee Chronicler stated.
 
Several years ago I had a small project involving a condo unit in a condominium development of single family buildings. The owner of a large-ish unit wanted to split his unit into two units. He had apparently already had an attorney hammer out the details with the condo association. My role was simply to draw up the new declaration drawings -- I didn't do "construction" drawings. That said, knowing the small town in which the project was located, it would not surprise me if my drawings were also used to obtain a building permit. Under the IEBC, the alterations would have reached level 3 status. Going forward, one of the two resulting units was about twice the size of the smaller unit, which was going to be more like an efficiency apartment than a dwelling unit. (Yes, I know an efficiency apartment is a "dwelling unit" by definition, but I hope you understand what I mean.) After the split, any substantial alteration of the larger unit could be a level three due to the disparity in size between the two units.
 
What if the entire 23rd floor was a penthouse that was the same size as the footprint of the building and it was a complete remodel gut job of 100% of the area?

Level 2.

IEBC 2021:

604.1 Scope. Level 3 alterations apply where the work area
exceeds 50 percent of the building area.

The IEBC doesn't include a definition for "building area," but the IBC does:

[BG] AREA, BUILDING. The area included within surrounding
exterior walls, or exterior walls and fire walls, exclusive of
vent shafts and courts. Areas of the building not provided with
surrounding walls shall be included in the building area if such
areas are included within the horizontal projection of the roof
or floor above.

As I understand it, "building area" is the total area of all stories.
 
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