remodelling around a furnace
Sounds to me that you need to talk to your local Building Inspector.
There are codes that come into play for the work you are going to undertake.
I know, permits, we don't need no stinking permits, right. Wrong!
You will need to have inspections done to make sure that you do have enough make-up air for the furnace and that you have a smoke detector and carbon monoxide detector. A louver door may work if you do not make a bedroom down there adjacent to it.
I would ask the inspector to guide you as to what they will require and I'd lean on a seperate mechanical room with outside make up air. you could suffacate yourself by having the furnace and you trying to use the same oxigen.
If you decide to make a work room down there, what are you going top do to control the sawdust?
Even if you do not make any bedrooms down there, you should, for your families safety, though not required, provide the proper egess to get out in the event of a fire.
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