A dead leg is any part of your house water supply where water cannot circulate. They are most common in extensions to the plumbing system for future use. For example when the house is built, plumbing is installed for a future bar sink in the basement. Over the life of the home, as those pipes sit full of water—not circulating with the rest of the house water supply—there is a risk of bacteria growing in the pipes. The same can happen with bathrooms that are not used very often.
Circulating loops, especially on the hot water supply side is one way to avoid this stagnation of water in the pipes but honestly there is no real easy answer to the problem. When you consider that a dead leg is considered anything more than 2 pipe diameters away from the flow of water, it does not take very much to create a pocket of water where water can stagnate. Contaminated watering holes come to mind.
There are increasing numbers of Legionella cases being blamed on Dead Legs and the number of actual illnesses is likely much higher, with many cases of flu-like symptoms going unreported or undiagnosed.
Recommendations for how homeowners should deal with water in seldom used sections of piping is evolving, but certainly any sections that are intended for future use should be properly isolated from the house system until such time as the installation can be completed.
For further information: Promoting Water Quality and Hygiene
By Charles Buell, Real Estate Inspections in Seattle
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WA State, Home Inspector Advisory Licensing Board