This would be in Charlotte, NC, Mecklenburg County. I vaguely remember hearing somewhere that rooms that are below grade are required to have a full size window in them or they can't be considered part of the square footage calculation or are a safety hazard or something like that.
Any truth to that statement?
I can't speak for your local codes, but in general codes (in the US anyway) require a minimum ratio of the area of window to area of the room for it to be called "living space". There are also requirements for egress in that you should have two ways to get out of any "living space" room, usually satisfied by a door and a window. An egress window has to meet minimum requirements for area and either width or height of the opening, and with a basement window, you have to have a window well that's large enough that you can climb into it from inside the house.
The only requirement for egress windows are in bedrooms for new construction, rental properties and second floor bedrooms without a second door and stairway. There are lots of "grandfather" rules as well. An under grade casual living space has no such requirement. I pull permits all the time for cellar rooms and no window specs are in effect in the newest IRC. You must check your local ordinances which may exceed IRC requirements.
Mecklenburg County refers to the North Carolina Residential Code, which requires not only a second means of egress from any bedroom, but also a smoke detector in the room or immediately outside the room. Here is a document where the county makes an interpretation of the residential code:
The City of Charlotte also has ordinances that impact your ability to use a basement as a legal bedroom. Part II, Chapter 11, Article III:
http://library.municode.com/HTML/19970/level3/PTIICOOR_CH11HO_ARTIIIMISTFIPLHA.html
