Do you have the wall section from the engineer you could post? How do the studs brace the wall? Are the supposed to touch the block?

IMO, studs hanging over the base plate 1-1-1/2" would look like shoddy construction. I wouldn't want anyone to know that I had done that!

Seaborn: I doubt the studs are to brace the block wall; if ground pressure was bowing the walls inward, studding wouldn't be able to resist those kinds of forces over time.

Easiest solution is to use a wider base plate than the 2x6. If the wall behind the studding is 1-1/2" out-of-plane, a 2x8 base plate (or larger) gives you an extra 2" to get the studs aligned and in-plane.

Depending on how high the new floor will be relative to the base plate, you may want to 1) stack two or more base plates to raise their height or 2) add 2x's on edge between the studs to give you a nailing surface/support for the bottom edge of the drywall.

seaborn the studs are 1-2” away from the block wall. In that 1-2” will be sand which will be held back by pwf plywood wrapped in vapour barrier. The studs will be against the pwf plywood.

formulaross we had the exterior walls waterproofed last year. This is just to brace against any pressure in the future. The concrete floor will be about 2” higher than the base plate. Essentially holding the bottom of the stud in place

Only an engineer would come up with a screwy detail like this. Sand? The plywood is just going to sit loose in there. Did he/she even consider constructability of this? In any case, it doesn't seem that the design relies on the bottom plate for resisting loads, as there's no special detail for attachment of studs to the plate. The load on the studs will transfer to the screed board which will be restrained by the slab. So, no I don't think overhang is a problem. I assume there's a reason you haven't asked engineer.

thanks for the answer. It’s definitely a unique way to say the least haha. There is a reason he did this project for me free of charge and i’ve contacted him about 20 times already dont really want to push my luck. Also i’ve only heard of screed board being used to level concrete. Is screed board a certain type of wood?

As long as the screed board is pressure treated.

If my structural engineer ran such a "support" system by me, I'd insist he put his professional seal on the plan opening him to liability in case of failure. Your post doesn't show one.

Building Science Corp.

BTW, fg insulation behind poly is a surefire recipe for mould in the finished stud wall.