No room in any basement or cellar shall be occupied as a habitable room unless:
(a) The clear inner height is at least seven feet six inches.
(b) The uppermost three feet of the required clear inner height is above the average outside ground level,
(c) The floors and walls are water and damp proof, in accordance with an approved method, if in contact with earth. Such waterproofing shall be between the floor or wall finish and the ground. (Code 1953, § 8.18)