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Water damage always poses a primary risk of mold and mildew, but growth is not guaranteed. The chances of mold developing depend on several factors, including the severity of the damage and how quickly the area is cleaned and dried. To prevent mold, you must act quickly—ideally within the first 24 hours. Clean up all water and thoroughly dry the affected area. If the damage is extensive, you were unable to address it immediately, or you suspect mold has already started to grow, it is best to assume it is present and hire a professional mold inspector or removal expert to assess the situation.

To ensure your basement walls are waterproof, it's crucial to address any existing moisture issues before finishing. Inspect for signs of water seepage, such as dampness or discoloration, and repair any leaks or cracks. Install a vapor barrier to prevent moisture from penetrating the walls, and consider waterproofing paints or coatings.

Proper drainage systems, such as interior or exterior waterproofing, can also be beneficial.

A walkout basement is considered to be partially below grade because at least one wall is entirely exposed. In some cases and in specific municipalities, inspectors and appraisers will still count walkout basements as below grade, which means the space can’t serve as living space or be rented out. If you intend on using the area as living space or a separate apartment, you should check with your local building department to make sure it’s legal to do so.

Most people consider a French drain to be one of the most effective solutions for foundation leaks, but it’s not always a standalone solution. French drains will help keep water away from your foundation to reduce the risk of leaking and structural damage from soil expansion, but depending on your foundation type and location, you might need other systems or techniques—like soil gradation and gutter and leader installation—to resolve the underlying problem.