My husband has had to deal with a few of these closet bump-outs. They often do leak and cause mold issues if not addressed in a timely fashion, as well as the heat/energy loss. He just insulated and resurfaced some from the outside by using insulation board, plenty of foam insulation around the edges, and caulk.
He has also removed and concrete blocked some which were rusted out boxes and causing water problems. He then used the original trim and doors on new cabinets he made in front of where they used to be (bump-ins). ;) These should be very familiar to Maya. ;) Lauren
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