After recently attending a seminar on permanent wood foundations (PWFs), I've been turned in to a big fan of wood foundations, but now I'm also pretty sure that about 99% of the wood foundations get built wrong.
I was already suspicious about wood foundations before attending this seminar, because just about every wood foundation that I've inspected has had water problems. Another home inspector who attended the seminar said it best: "I was worried about wood foundations before I took this class... but now I'm terrified."
This class really reinforced what I already knew about wood foundations - water management is critical. If poor water management is considered problematic with traditional concrete foundations, it should be considered catastrophic with wood foundations. For a wood foundation to perform properly, it needs to stay dry, or at least be given the chance to dry if it gets wet.
When I find signs of moisture intrusion at a wood foundation, it means the water management system has failed, and the repairs will probably be expensive. Here are a few water management issues to look for that would be red flags at a wood foundation.
The obvious stuff. The soils around a wood foundation must slope away from the house at a 5% grade for a distance of a least ten feet. Gutters and proper downspout extensions are also important. Any time this stuff is wrong, it should be a red flag.
A traditional sump basket. Permanent wood foundations should have a wood sump crock that is completely open at the bottom. If a traditional plastic sump basket is used with a wood foundation, the bottom should be perforated to allow water to come in from the bottom. This will help to prevent it from getting clogged on the sides. The sump basket should also be at least 30" deep. The photo below shows a traditional sump basket that wasn't open at the bottom.
The polyethelene sheeting is damaged, unprotected, or incomplete at the exterior. Polyethelene sheeting acts as a slipsheet for water that comes in contact with the foundation; it's not a waterproofing material. The sheeting must be protected with a wood board for eight inches above the surrounding grade, and at least four inches below. If you can see the sheeting, it a problem.
Black stains behind the insulation. This is the huge one. If you can pull back the insulation and the wood is stained, this throws up a huge red flag. If the wood is wet, the water management system has failed.
If you own a wood foundation, take the time to check it out for yourself. If you're buying a home with a wood foundation, make sure your home inspector can check for moisture intrusion at several various locations around the perimeter of the foundation. If everything is finished off, consider getting permission for a destructive inspection that would allow the inspector to do this. If I ever buy a home with a wood foundation, this will be a prerequisite.