Walls – How to repair these cracks in the balcony wall

From the pictures it looks like the cracks may only be in the stucco, and the underlying structural wall may be unaffected. It's hard to tell without actually inspecting the wall, but my guess is that these cracks are only skin deep. However, you will want to treat them to prevent them from spreading.

Here is a good article about Cracks in stucco.

Here are some excerpts from the article.

All buildings are subjected to a variety of stresses in various forms and this stress is often transferred to the plaster stucco membrane.

Stucco is not and never was intended to be a structural material.

Cement stucco is a relatively thin, brittle shell over a framed structure and can crack if the stresses are transferred and overcome the strength of the plaster membrane.

SHRINKAGE STRESS

All Portland cement shrinks as it cures. Controlling and minimizing that shrinkage is critical to minimizing cracks

Shrinkage cracking tends to have a map-like cracking pattern.

OUTSIDE SOURCES

Structural loads, lateral force racking, thermal changes, wind, lumber shrinkage and seismic events are all examples of outside sources of stress.

HOW HARMFUL IS A HAIRLINE CRACK?

a hairline crack does not automatically mean the stucco is faulty, failing or will not function for the service life of the building.

MAKING REPAIRS

Once the decision is made to make repairs, there are several options.

Option 1: Treat the joint with the same finish material.

Option 2: Paint the wall or ceiling after treating the crack with an acrylic paint or paint designed for stucco.

Option 3: An elastomeric paint coating.

Option 4: Recoat the wall from architectural break to architectural break with the same finish material.

Option 5: A new basecoat and mesh over the wall area.

If wallpaper was painted over you could tell pretty easily by pulling on some of the peeling paint and breaking the paint chips. Wear a respirator mask while doing this, however, as often times flaking paint is a potential indicator of lead based paint. If the chips contain paper, then you're right, it's wallpaper with paint over it. If it's just paint, then be more careful - get the chips tested for lead.

Given the wide spread flaking, it is likely that the wall simply wasn't properly primed. An improperly treated wall when painted over will eventually lose adhesion with the paint and it'll flake away like you're seeing. If they applied paint directly to wall paper w/o priming, I think the same is true.

That 2nd picture DOES remind me of wallpaper... I've scrubbed far too much backing off the walls and that looks similar.

The grey subsurface is, I think, a kind of stucco mix that was often used to even up walls where lathe and plaster was replaced with the older style 2x4 drywall panels. It's nasty, gritty, dusty, unpleasant stuff, tougher than joint compound/plaster to work with because of it's tendency to crack and break rather catastrophically. When I run into that stuff in my rentals my approach is, "IF I have to touch it at all, it's ALL coming down." Plus with wallpaper I swear gutting is easier than stripping.

Now around the vent pipe, that looks like moisture damage. The bubbling around the pipe suggest water leakage. Is that a "finished" ceiling - ie - thats the roof on the other side of that wall w/ the pipe? If so, make sure it's properly sealed and replace at least that area of ceiling. Picture #5 seems to confirm this - someone touched it, and patched it badly.