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that shed will add significant value to an already valuable asset. if using an asset you work hard to pay for contributes to that, then why shouldn't you be entitled to a little piece of it?
if you'd rather be generous, or look at 6ft of fence in front of 8ft of wall (rather that 8ft of wall), that's fine, too - i'm just pointing out the options.
you should see what cunts get when someone want to oversail with a crane or with scaffolding, and that is temporary...
Solid advice. A whole new fence seems fair and appropriate.