Need advice on renting space out in a single family - Warwick,RI

[Jameson E.]

Hi all, I have a question about my father's current situation. He has a VA loan on a single family with a current 2.75% rate. He had my cousin living in the basement with no signed lease or anything all verbal (but no egress window or bulkhead, just 1 set of stairs out). In the last week he gave my cousin 2 months' notice to move out due to personal reasons.

First, what risks can my dad face if my cousin tries to pursue any legal action (it was my cousins' idea to move into the basement regardless of the risk of no egress - had her kids stay in the upstairs bedroom due to the risk). 

Second, if my dad wished to rent the space out again is that even allowed or are there ways to make it legal? He can use the extra income to help support him. Clearly an egress is needed but can a single family ranch with below grade basement ever be converted legally in Warwick? 

Any advice or guidance is appreciated.