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Flashing is an essential component for any window installation. This is part of the system which protects from water intrusion and structural deterioration. There may be gaps between your framing or old frame and replacment window frame. These are typically filled with insulation (usually foam) for energy conservation and to prevent drafts.
Simplified / general answer above. As with most construction / improvement details, doing it right depends on products, conditions, and is more complex than a two or three line answer can fully describe. Your best assurance of having it done right is to engage a responsible and experienced contractor.
Looks like this may have been someone's remedy for a deteriorated / rotten mud sill (the flat wooden plate which sits atop the foundation wall, upon which the joists bear). If that is the case, it is possible that you might be able to remove the latter obstruction if one can restore the proper / original condition over the window. That would want to be examined and undertaken by a professional.
As with any such thing, it is difficult to say for sure without a full on-site examination by a home imporvement professional with structural knowledge and experience in these types of repairs.
I agree with what Yuri said and would like to add that it is imporatant to have it removed properly so as not to cross contaminate. Mold spores are microscopic in size and easily dispersed if not handled correctly.
The leak and mold are time sensitive. Mold can be hazardous to your health. Dealing with mold properly means removing the sheetock and insulation once the leak is fixed. Don't let anyone tell you they can seal it in place and paint ove it. It must be removed. The foundation work can get vey expensive if you wait too long so don't put that off too long.
Hope this helps.
Have them take that metal off that they installed "over" the existing step flashing. You'll need to check the step flashing cards to make sure they are all aligned and in the right places. Chances are they are not. If they are in the right places then it's your window leaking. Best I can do for you without running a hose on it.
No you could run a hose on it...start along the roof line first and eliminate each area before spraying up towards the window.
It appears that you are missing both step flashing (between the roof and the wall) and the head flashing (above the trim running parallel to the roof line). Here is the link to the Hardie Best Practices manual with specs on both flashings: https://www.jameshardiepros.com/getattachment/9a1017e1-853d-4574-b3e9-7afb1a5a472d/intro-tools-hz5-us-en.pdf.
This is really a tough situation because you have twice workload at your side but you nither able to decide the starting of your work. But you have to consider that if you start the roofing first then there is some possibility that when you want to start the foundation work then roof shouldn't get damaged so you have to start from foundation then Roofing. Because of first thing always first.
Now you know how you can get the work done properly and without any over budget issues. If you are still confused about then I can refer you a company which is really the professionals and provide you the best solutions for your work.
I agree with all of the above comments. The best is to start with the roof or where a leak is coing in from. Get that taken care of and then work on the foundation.
Make sure you hire a licensed and insured roofing and foundation companies. Also ask about the warranties they offer.
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