if its over the boundry its over the boundry, either they need to compensate you for the rough value of the land they've taken..
or in some cases like this, iveheard of the builders being told to basically tear the wall down and correct the issue..
what will be the problem is someone actually taking the blame, it'll go around in circles, the owner of it will blame the builder, the builder will in turn blame the surveryor, the surveyor will in turn blame the council for having in correct records..
id take the councils advice, chat to a lawyer, possibly look at putting a caveat on the problem house until its resolved, caveat should mean from my understanding of them that the current owner will be unable to sell it until its removed..
if its an issue, basically make it an issue for him he HAS to fix until your satisfied..
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