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Open walls - Exposed Insulation

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I inspected a home that was in the process of renovation. The majority of the home was done, but the downstairs hallway and part of the upstairs lacked sheetrock. The walls were open with paperbacked insulation between the studs. The homeowners live in the house full-time, and the kitchen, baths, living areas and bedrooms are all finished. I know the open walls are considered a safety issue, but as the rest of the house is in good condition does it still warrant a C6 condition rating? Or does the condition of the finished areas count for something and can i give it a C5 rating? I'm having a hard time deciding. Thanks for any insight you can provide.
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Doesn't exposed insulation pose a respiratory hazard?
 
When I was a kid I asked my mom about our family history. All she would say is that they were all thieves and carpetbaggers. :)
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Weird that I just saw your post. Just last night I had a flashback to like 55 years ago when I asked my mom the same question . . . and she advised me that I better change my last name if I wanted to into the bar business near Pittsburgh. Another time I asked my mom whether our new next door neighborh who was a female about 40 years old had ever been married. My mom replied, "They never did find his head." Life was much more straightforward back then, but not necessarily kinder and more gentle...
 
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