Renting out a property with un-permitted basement space?

[Andrew Wayne Harris]

I just bought a property and am looking at renovating and renting the basement. The basement is finished with a bathroom and 3 rooms, it's just built to the standards of 1948. Long story short, the max achievable ceiling height is right around 6'-10", which is 2" short of 7' minimum per IRC.. I contacted my local permitting office and they basically said they couldn't issue permits unless the entire space were brought up to code. Meaning, i'd have to chip out the concrete floor and remove at least 2" of dirt to obtain an acceptable ceiling height just to be able to add egress windows.

My question is this: what would be the realistic consequences of adding egress windows with no permits? Would it be a major no-no? If I were to add un-permitted egress windows and rent out the basement could I face serious legal problems? Down the line, when renting out the entire home, will this pose an issue? 

My thoughts are, when renting out the entire home, even if the basement space is not legally considered 'living space', the tenants will use it anyway. It makes up at least half of the sq footage of the home. The previous owners were definitely using one room as a bedroom for their kids. I'm just trying to get some clarity on what can/ can't be done and how I should approach this both now and in the future.

Any advice will be greatly appreciated! Thanks in advance!