Is the WHOLE shed over the property line, or just part of it?
How big a shed is it? Do either you or he have a survey?
Have you asked why the neighbor suddenly NOW
wants you to move the shed? How hard would it actually be
to move it? How about to blow it up and build a new one?
If it's really on his property, and he wants it gone, you ought
to move it. (this being a question of what's right, as opposed
to what's legal)
If the neighboring owner is not using the land and is only interested in
avoiding adverse possession, you may be able to reach an amicable solution.
You can prepare a simple document showing that you recognize the
encroachment and that he grants you permission to continue the use to some
future time or to a revocation by him. The document will need to be signed
by both of you and would best be recorded. Since your occupation is thus at
his pleasure, adverse possession is then ruled out.
In my working years, we did a variation of this on unused project
rights-of-ways. Farmers applied and we issued use permits, revocable when
our need arose. Sometimes the use occurred before application was made and
we had to suggest that they should make application. Never had problems
with this process.
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