A basement may be used for habitable rooms or a dwelling unit, regardless of the depth of the floor below grade, if the floors and walls are impervious to leakage of underground and surface water and are protected from dampness, and if the required minimum window area is located entirely above the finished elevation of the grade adjoining the basement wall in which the windows are located.

You definitely need to go inspect the work and make sure there is not any water damage or leakage.

Didn’t get any leakage.

., - coverage for slow seepage and leakage (especially since tenants don't always report problems right away),- in our area (Houston and the gulf coast) you also want to consider the pros and cons of a 1% vs 2% deductible for wind and hail claims. 

Then when there is some small leakage it is never noticed till too late .

I personally would have told the tenant to ask the water company for a reduction in water bill due to a missed leakage.

It's looking like our biggest expense will be the roof- there is some leakage above the kitchen cabinets.As it stands it's a 3/1, 1500sqft, paid cash no finance, PP: $62.3k, no mortgage/lien attached. 

ØI also tried with my insurance as well to reimburse and you did not give the proof of leakage which is required by the insurance, so they rejected the claim.

The disclosure specifically says no water leakage, accumulation or dampness as well as no repairs or attempts to control any type of water.   

Termites usually get into properties due to water leakage in my experience, so you normally have a leaking roof, water leak in a basement wall, etc to look for.