Walls and Ceilings - Ceiling drywall/sheetrock adjoining concrete wall questions

Hi there

We are in the process of upgrading the basement laundry room. As a part of this the ceiling is going to get sheetrocked. The walls of the laundry room are either poured concrete foundation (3 walls) and brick (1 wall). We dont want to sheetrock these walls as occasionally they have become wet/damp. I have two questions about the boundary between the sheetrock ceiling and the walls:

1) Should there be a space or gap left between the ceiling sheetrock and the concrete/brick walls? If so how much of a space and why?

2) Would one use regular joint compound on the boundary between the sheetrock ceiling and concrete walls or would one have to use a different substance that would adhere to the concrete/brick better?

Thanks in advance for your replies.

First I would paint the walls with drylok - that should stop them from getting damp. It will also brighten up the room. To hide the edge next to the wall you can either flat tape to the wall or add moulding to hide the gap. Unless the basement is completely underground moisture shouldn't be a problem next to the ceiling [especialy if you seal with drylok] Either joint compound or durabond will work. Joint compound is water soluable and durabond is not.