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When we got our house we could see that there was some water damage around our skylight that had been repaired. Slowly over time the bubbly repainted edges started crack and fall and soon all the plaster (the non-repaired) part started falling off with it. It looks horrible and I got an estimate which was going to be $2000 to repair with replacing the skylight. I ended up getting a new skylight and replacing the 7 year old roof because the previous owners did it themselves and did a horrible job. My insurance wouldn't cover the roof because it was installed bad and the inspector should have caught it. So I'm going to fix the ceiling myself. I have no idea how to plaster or anything. I decided to put beadboard wall paper up there.

So my question is this. Do I need to go ahead and try to knock down all the plaster on the ceiling or just the loose and cracking areas? And can I apply it directly to the gray rough part of the ceiling (no clue what its called). TIA!
 

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Its a judgment call. At this point i would knock it all off. Other guys may not. Once off do some serious inspecting for cause of this. Just drywall ceiling
 

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That looks like an old plaster ceiling rather than a drywall ceiling. The joint compound is failing because the cracks in the plaster were not taped and I am willing to bet there is/was some water intrusion in that area. You will need to remove as much of that joint compound as possible, tape the cracks and re-coat the area.
 

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Yes we suspected there was a leak from the skylight because the shoddy patching but when we got it the skylight wasn't leaking anymore. Then it started to leak again but the ceiling was falling in before the leak. When we had it looked at, the owners had just added some epoxy so it wouldn't leak temporarily. Turns out they did a lot of DIY stuff but extremely poorly. The roof, patching the leak, they patched a leak in the basement with epoxy and drywalled it back up. The plumber said it was a temp patch that would only last 6 mo. to a year and the pipe itself was corroded. They previous owners totally screwed us. The inspector should have caught a lot of it. The first 1.5 year we ended up spending $20,000 of unexpected expenses in repairs. Which is why the cosmetic stuff we are doing ourselves...and since my husband is always deployed....its me doing it myself.
 
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