Is my basement apartment automatically illegal?

A basement apartment isn't automatically illegal, but it does need to meet the local building code and zoning rules for a legal second unit, including proper egress windows, ceiling height, and a separate entrance. Many older basement apartments were finished without permits, which makes them unpermitted rather than inherently illegal, though that distinction still matters to a lender or appraiser. Brian Beatty can point an owner toward the right local office to check a specific unit's status before listing or renting it.