How Is Residential "Livable Space" Legally Defined and Measured?
The definition of livable square feet is one that will vary by location, just as, for example, the definition of a bedroom varies by location (Some places require there to be a closet to classify a room as a bedroom). To find out how livable square feet is measured in your location you can ask realtors, real estate appraisers, and your municipality’s building department.
More to the point, to a large extent, there is no way to “enforce” a definition against prospective buyers who disagree. Simply put, no one is forced to buy a home they do not want. So whether your home, for example, is listed at 1,500 square feet or 1,679 square feet, if your buyers don’t feel the home is big enough for them, they are not going to purchase it.
The only common situations in which the exact size of a home may be legally important would be:
1) For tax appraisal purposes
2) For qualifying for a certain mortgage or home equity loan
3) If a buyer has already bought, or at least has signed a contract on a home, and now claims that fraud was committed because the home is not as large as advertised.
In that last case in particular, the exact definition of livable square feet could clearly impact liability. As noted above, there will be some definition used in your area—apply that definition for determining the square footage. The livable square footage will be whatever it is under that definition.
On a forward-looking basis, the best way to avoid potential problems is to simply disclose all information in a transparent way. For example, say you have a home with a finished basement and a finished attic, and are concerned that the basement and attic may not be considered “livable square feet.” Unless you’re certain of your definition, list the home as “2,100 sq. foot home with 800 sq. foot finished basement and 400 sq. foot finished attic providing additional space,” rather than as 3,300 sq. foot home, nobody can object to a truthful definition.