interesting debate I started it so ill end it code 3 is the winner lol
Remember that this is a risk transfer from the client to you. That is why I would not be happy with suggesting to the client that all was hunky dorey the way that it was.
Observations in a periodic inspection are at the sole discretion of the Inspector (so-called Best Practice Guides etc. cannot think for you, nor do they hold any basis in law), so by all means use a C3 observation against it if you feel that it is appropriate but I certainly wouldn't.