1954 rambler in Minneapolis, Minnesota here. I am in the process of refinishing our basement after some slight water intrusion last year caused us to discover mold growing on our old tar paper behind knotty pine finishes. We concluded it was due to water weeping behind the walls and then collecting on the tar paper, a problem that had been ongoing for decades with no obvious failure until now. The affected wall was not waterproofed from the outside, but the ground has been regraded and plastic sheeting with river rock was laid on the ground 4-8′ from the foundation to ensure water is pushed away from the house. The wall has been open with that solution in place for several months with no further signs of weeping like the wet joints we had been seeing. I’ll be refinishing the interior with R-15 XPS directly attached to the concrete with stud walls and drywall in front.

But my question pertains to the ‘unfinished’ walls in the laundry/utility area of our 3/4 finished basement… right now I have some concrete walls that were painted with interior latex. I don’t know if any drylok or similar waterproofing was ever done on these walls, but there has never been any obvious sign of water intrusion on these walls for the past 11 years we have lived here. I was considering repainting as the existing paint is in good condition, save a little flaking by the floor (the worst spot shown in the attached pic), and we haven’t had obvious problems up till now (And wouldn’t expect to as this wall is protected from water intrusion on the outside by a massive three season porch covering almost the entire length). But everything I am reading in other forums says you should never paint and should get rid of paint asap. So I am looking for advice. Is it necessary to remove the old paint? If I remove it, we don’t especially want to finish this laundry area because of unbudgeted costs, but we do want our laundry room to be attractive so I am looking for a low cost option for some covering/tint on the walls that could go over the residual paint that will be left after stripping and scraping the walls. We are open to fairly industrial looks like thinset with permeable stains/paints. Or perhaps the most sound solution is to just plan on finishing this area the same way as the rest of the basement to complete the R-15 thermal envelope, but again, concerned about cost. We are talking about roughly 400 sq ft of exterior wall. I am a bit stuck and lost. Thanks for your good thoughts and outstanding forums.