Basements and cellars are very different. A basement is a story partly below curb level but having at least one-half of its height above the curb level. A cellar is an enclosed space having more than one-half of its height below curb level.
Cellars in one-family and two-family homes can never be lawfully rented or occupied. (A secondary kitchen for accessory cooking may be located in the cellar if pre-approved by the Department of Buildings). Basements in any residential property (one-family, two-family or multi-family) can never be lawfully rented or occupied unless the conditions meet the minimum requirements for light, air, sanitation and egress, and have received approval by the Department of Buildings. (Since the rental of a basement in a two-family dwelling would result in a conversion from a private dwelling to a multiple dwelling, basements of two-family dwellings may not be rented unless the entire building is in compliance with the New York State Multiple Dwelling Law.)
Owners with illegally converted basements and cellars may face civil and criminal penalties. Violations may be issued by either the Department of Housing Preservation and Development (HPD) or the Department of Buildings (DOB). Occupants of illegal basement and cellar apartments face potential dangers such as carbon monoxide poisoning, inadequate light and ventilation and inadequate egress in the event of a fire. Occupants of illegal basement and cellar apartments may be ordered by the City to vacate or leave any illegal basement or cellar apartment.