Thanks Les, Kurt, and RSpermo for responding to my question. I appreciate all your advice. The current resident should have gotten a permit to add a bathroom in the house since he lived in the city to answer your question Kurt. Something a little funny that made me start all this nonsense the city inspector passed the house and gave it an occupancy permit, but we called and electrical inspector who works for the city and he confirmed that it was a violation of code not only because it was in the basement but for four other reasons: 1) closet was not wide enough 2) closet was not long enough 3) multiple grounds were attached to single ground posts 4) the outlet located next to the panel was not a GFI so we attached that to our inspection rebuttal. As of right now we have requested that the panel get moved and installed to code or we will withdraw from the contract. I am a little ticked off that I spent all this money in inspections but its better than 10 years down the road having to spend money on it because of the original owners mistake. But I learned a lot about the inspection process and now it kind of intrigues me. Thanks alot guys I will be sure to stay in touch and continue to read posts.