No evidence of what lies beneath… 
Happy fungi living La Vida Loca inside the wall next to the drain. 
After stucco and WRB is removed, problems appear…. 
It gets worse! After stucco is removed, we see severe degradation of the home’s exterior sheathing and framing. 
Peel n stick membrane with a hole in it destroys the notion that the membrane is “self-healing”. This was under a tile and mortar cap on top of the parapet wall. 
Balloon framing on ocean facing wall.
Although this posts origins come from a job I did as a waterproofing contractor in 2013, it serves as an important lesson and example of why construction monitoring of the WRB and waterproofing is critical to ensure your building is waterproofed right.
This job started as a basic repair job; a new owner had purchased this Shell Beach home after having a home inspection. There was no specialized inspections done of the roof deck and roofing, which serves as an example of why you should have an inspection done by a specialist.
I was called because the home inspector did call out a problem with a roof deck drain. The area around the drain had soft spots in the plywood. My firm contracted with the new owner to replace the damaged plywood at the drain area only, install a new drain and waterproof it back. The owner liked the price and our plan because it was less than the credit back he got from the seller for doing the work. Note to buyers-have all repairs done before closing! The seller would have had to pay for what is coming next in this story.
California's SB 326 Balcony Inspection Experts 