I can think of a few caveats. Check with your local building department to verify that your house is zoned for multi-family dwellings...otherwise you could be hit with fines. Do you intend to separate utilities (water, heat, electric)? This will cost money to get it done to code.

I believe the building codes of some municipalities require a minimum ceiling height which may not be obtainable in basements. Basement kitchens are not permitted in many towns and I believe a bedroom requires 2 means of egress, so if you can convert the basement, be sure to situate the bedroom so that there are 2 means of exit. I'm sure there's more...your building department will tell you specifics.

Good luck

Hi Wally, thanks for your comments. I shouldn't have said *apartment*. Yeah!!!, I hear you that would bring some extra costs for code compliance. It's more a living area for a family member who might be moving in. So we'd be sharing resources (electric, heat, etc). I'll definetely check up on the kitchen permit; otherwise, we'll be sharing mine too... .
Is a dehumidifier recommended? or some fan to air up the area?
thanks!!
Al.

Try to get the moisture problem resolved otherwise you could already have a mold breeding ground. If you have a "musty" smell, you probably have some mold growth somewhere. Removing the moisture will help to allieviate the mustiness. Check your downspouts drain far enough away and that runoff goes away from the foundation. Make sure the bathroom has a working exhaust vent that vents to the outside in order to remove shower vapor. Check the bath's water supply and waste pipes (including toilet) for slow leaks. A dehumidifier would help somewhat but it is only a stopgap and won't solve an active moisture problem. Properly insulate the wall between the garage and the living space to keep air and moisture infiltration from the unconditioned space of the garage. Eliminating all sources of misdirected moisture is a key factor in comfortable "basement" remodels.

Remember to put smoke/co detectors in the living space. The "2 means of egress" for a bedroom is required for any bedroom not just for multi-families. You want your relation to be able to get out of the house alive.

Oh, remember to factor in telephone and television service too if you want to share these "utilities" as well.