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Wood stove flue pipe below grade?

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This place has a wood stove flue pipe that's been routed out basement wall, portion of pipe is below grade. Flue pipe is not in use, stove has been removed. I seen a few of these before but they have always been above grade. As you can see in the photo my main concern is water accumulating near foundation where soil has been dug out. If this type of installation approved? If so, do they make some type of shroud for a soil barrier and to prevent leaves/debris from coming in contact with pipe.

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The fence makes me wonder if the chimney had been buried. Was that supposed to be a permanent way to keep someone from falling in the hole? As was the dirt just supposed to stay they and not cave in?

They could have built a retaining wall, but that would not have prevented debris or water from entering. Then they could have covered the retaining wall and hole with a shed roof, complete with chimney flashing. Or just decided not to put a stove in the basement.

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