You need to get some clarification from your inspector.

Grills or a louvered door is a very common way to provide air for your HVAC, water heater, etc., and both areas are considered "conditioned space" for heating and cooling purposes. If your HVAC or water heater is a very high efficiency unit, it may have its own vent system, so in that case it draws in outside air for combustion and exhausts it through a 2nd pipe, or a concentric vent.

However, for HVAC its usually not referred to as make-up air. Make-up air is usually for a power vent of some type, such as a high flow kitchen exhaust fan.

Bruce

Nadine where you located?

Interior walls along perimeter of foundation should be insulated. I don't know what weather sealed he is talking about, interior basement walls are not exposed to weather. Let me know your location please and I will look it up and see if there is a different code for your area.

looks like we have a direct vent system so I dont think we need it....

Take a look at this link, it tells you everything you need for a finish basement.

https://www.grafton-ma.gov/sites/graftonma/files/uploads/2plan_review_basement_checklist.pdf

thank you so much!!! I actually found this on our town website and it has some differences, especially in the R value needed for basement walls. I assume we use our towns recommended one? The spray foam guy recommended 2 inches which equates to about R14 value.

hmm..that didn't post, let me try again

https://www.tewksbury-ma.gov/sites/tewksburyma/files/u216/energy_compliance_form_7th_ed_one_and_two_family_02_07_08.pdf

After some more reading, I think this has to do with the thermal envelope. Our basement is currently unfinished and has insulation in the ceiling. By finishing part of it, we will be changing our thermal envelope. The interior walls and doors will now be part of the "envelope" and they need to be fully insulated. At least that is what I am understanding based upon what I have read...

I think I understand what your inspector wants, but its not common to add insulation to the interior doors just because you finish a basement. However, most folks also do not put insulation in the basement ceiling if there is a plan to finish the basement later, since you then have insulation between two conditioned spaces.

I'm not an HVAC guy, but it also looks like your heating system is a high efficiency unit that draws its combustion air from outside. The telltale sign is that it has two pipes (air in, exhaust out?), and the exhaust pipe is made of PVC, not metal. It may not even need any other air source (vented door, etc.), since it uses outside air for combustion.

Its very typical to finish all of the basement except the utility room (leaving it with concrete walls), and still have a louvered door or vents connecting that room to the finished part of the basement. You lose some heat through the uninsulated concrete walls in the utility area, but its usually not that significant.

Bruce