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I am going to replace my carpet with Engineered hardwood floor(the choice would be Kahrs floating installed floor). The problem I am facing is my baseboard is thin. It's not able to cover the expansion gap required by the floor manufacture. I think this is a very common problem, most floor manufacture requires 1/2" expansion gap but most baseboards nowadays are 1/2" or less .

My current baseboard is short and thin. It will be very silly if I use quarter round to cover the gap. So the only way seems to me is to undercut the drywall so there will be enough expansion gap. Now my question is if I undercut the drywall, will the moisture come from the wall through the cut and affects my floor much?

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Have you removed the base molding yet? When you do, you may find that the drywall does not actually extend all the way to the subfloor. There may even be enough space to allow for your expansion gap. – Tester101 May 1 '13 at 10:52
Thanks for the tips. I haven't removed the base molding yet. Will see. – limi May 2 '13 at 6:29
up vote 1 down vote accepted

You can but the if its an exterior facing wall you'll likely cut the vapor barrier if you don't use the proper tool. I recommend the Fein Multimaster for this. It has a depth stop gauge attachment so you cut just enough of the drywall without penetrating all the way through. The segment saw blade is best for this. A ton of companies are making knock offs of this tool that you can find in big box stores now so they may work too. Fein is going to be more expensive but it lasts decades.
Another option to consider is to just pull out and replace all the baseboards with something thicker and looks better than what you have now. If you choose this option heed my advice and pre-prime, if not already, and pre-paint all the boards with no less than two coats before installation. You'll still have to apply a final coat after installation to cover nail holes, but you can go extremely fast because you've already pre-painted.
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1/2 expansion gap total gives you 1/4 on each side, which should be easily covered by the moulding.

That said, yes you absolutely can trim the drywall to allow the wood floor to expand. An engineered floor, though, likely doesn't need more than 1/4" on each side. It should be dimensionally stable.

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In my experience it has always been 1/4 inch on each side. – Chris Cudmore May 1 '13 at 12:47

First a 1/2" seems like a huge expansion gap. Most are 1/4" or the measurement of the thickness of the floating floor. I guess it really depends on the size of the room and what kind of wood.

It is perfectly OK to undercut your drywall - you might have to add a few strategic screws if you cut screws out. I have done this in the past. However something to think about when doing this is how are you going to keep the wood from sliding all the way to your framing? You will very likely have cut well above new floor level (maybe a half inch) and come up with a way to keep a spacer stable while you are laying your floor down. I used flat brackets and pushed floor against.

Also there shouldn't be moisture in your drywall. Certainly not enough to make its way down to the floor. Also given your large gap the drywall shouldn't be on top of the floor.

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