First of all I too would like to thank you for your services! Second I ran into a similar issue when building our coop last year. After going to city hall to obtain the permit we were informed that we didn't need a permit for a 10 by 12 shed as long as it wasn't more then 10 ft tall (it's 10 1/2 ft tall but shhh) Then after we started building the city inspector told us we needed to move the coop forward 10 inches to make it 10 ft from the property line. Property behind us is nothing but thick woods. This was after we had the floor built frame up and all the walls up with roof. We had to get the truck back there to pull the thing forward 10 inches! Then they started in with the needing a permit thing again, we went back to city hall and asked them WTH is going on we either need the stinkin permit or we don't?! They left us alone after that. We didn't have any issues with the neighbors tho. I wish you the best of luck and truely hope everything works out for ya and the neighbor backs down.