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The typical "grandfather clause" relates to the applicability of the latest building code to things that were already installed under a previous code (i.e., previously allowed). You may need a waiver or to have the old work re-inspected for insurance reasons.

There are several situations that may arise:

# the work was done to 1947 code and is still "safe"; # the work was done in 1947 but not inspected or otherwise clearly safe; # the installer in 1947 ignored the code but did it "safe enough"; # the installation was never safe or done to code; # or, even though the work was done to 1947 code and is still "safe", the current code does not permit that type of wiring or structure in particularly hazardous circumstances. For example, a previous residential owner may have hired a licensed electrician in 1948 who did the installation to 1947 code, had it approved by an inspector, and it has never been modified. Over the years, the residence became used as a pre-school.

However, Life Safety Code 2007 may prohibit that type of wiring in a pre-school occupancy, and no intelligent fire marshal is going to jeopardize the safety of children intentionally. Therefore, even though the previous use was "grandfathered" for residential use, it may be prohibited (in the interest of public safety) for the present type of use, and should not be allowed to remain in the old condition. Depending upon the jurisdiction, the wiring may need to be replaced even if the use reverts to the previously permitted use because it no longer qualifies as "grandfathered" once it was converted to another use.

Similarly, your insurance company may balk at providing coverage for work that no longer meets code (stairs too narrow or steep, old furnace ducts, railings too short, etc), if you can afford to make upgrades and avoid known hazards.

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Q: Legal definition of a grandfather clause as it applies to 1994 codes?
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