ASounds to me like a case of "Basement Ambivalence" — a syndrome that's common to many a homeowner. On the one hand, you've got loads of free space just begging to be put to good use. On the other, you fear it could flood at any time and ruin everything. Before you install a movie theater, a wine cellar, or have your pool table delivered, I suggest you "take arms against a sea of troubles" by dealing with the water. First make your basement dry and healthy. Once that's been done, then renovate.

The initial step to a drier basement is to find out where and how the water's getting in. Your architect may advise that you hire a waterproofing consultant to evaluate your existing conditions and suggest solutions. But first become a water detective so you can make an informed decision when discussing your options.

Take a walk around your property. If the ground is sloping toward your house or there are areas next to the foundation where the soil is particularly low, water could be getting inside that way. If you have window wells, check them for water or puddles. Inspect your gutters and downspouts for debris and make sure the downspouts extend at least eight feet from your house. If downspouts connect to underground pipes, have them checked to make sure they were correctly installed and are still connected. Talk to your neighbors about how they've dealt with their water problems; you can gain insights into possible common local conditions, such as a high water table or runoff from an adjacent paved area.

Once you've finished looking around outside your house, continue your tour inside the basement. You may find leaking foundation cracks, puddles on the floor, damp, moldy or chalky patches on walls, an open sump pit, stuffy smells, and/ or dripping mechanical equipment or pipes.

Some typical solutions to basement moisture problems are:

• Re-grade the ground outside so that it slopes away from your house.
• Clean gutters and downspouts and have any roof leaks repaired.
• Drain window wells to the exterior.
• Patch foundation cracks.
• Apply sprayed-on waterproofing and/or damp proofing on the walls.
• Install a perimeter drainage system either inside or outside or both.
• Install a tightly sealed, covered sump pit with a functioning sump pump and a battery back-up.
• Provide ventilation and use a dehumidifier to reduce humidity and condensation in summer.
• Run your dryer exhaust directly outside.
• Insulate any exposed piping.

When you've sorted out the best solution for your particular problem, be sure to seek expert advice before implementing any changes that could affect the structure of your house. One such change that will allow you to reap great design benefits is to increase the size of your window wells and add additional windows – facing south, if possible. By bringing natural light into the space, you can make the area feel more expansive and also allow fresh air to flow through it.

Once your moisture problems have been fixed, you're almost ready to renovate. First live through one or two extreme weather events (like a torrential rain or a major snow storm). If the space still stays dry, you can then go ahead with your renovation confident that you have created a drier, healthier house.