#1: Report damage and surrounding materials conditions where applicable. Sill was notched for a component. #2: Think of the crawlspace as a system. Vapor Barrier or Vapor Retarder. Crawl Space Moisture Barrier Placement Guide #3: Report exposed soil and disturbed soil in crawlspaces anytime. Look at the efflorescence on the left foundation wall. Likely digging a pit for a sump pit.
Just my 2 cents.
Would you guys recommend the notched sill be further evaluated in your report or just note the observed defect? I am just curious on the seriousness you would put this notch. On a scale 1-10 how are you bringing up this in your report or summary with clients?
btw, this crawl space is in southern California. This does not change the direction of the vapor barrier right? the warmer side of the home should have the paper facing it.