We have a 1922 house with a chimney that goes through the center (no fireplace). I had the furnace inspected (furnace and water heater new in 2001) and it turned out fine. But, the guy said that our water heater tube and furnace tube need to connect and feed into a big hole in the chimney - then into a chimney liner which we would have to install.

Right now, both the water heater and furnace run separately into the chimney and there is no liner.

I asked the city inspector and he didn't think this sounded right. It's $400 and a permit, so if it's not needed, I would rather not get it. On the other hand, I don't want our chimney to get ruined due to condensation.

Any advice would be very much appreciated!