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I seems we agree, but you write better. I don't know the legal implications if it will affect the new buyer once they own it (if it was historic issue). But either way, its a solicitor issue to resolve, no? Either to resolve, withhold cash or else. It's not the new buyers problem, to pay for fixing. This is what you pay a solicitor for.
I'm not sure i entirely follow your read on things here. To my mind this seems more like the neighbour trying to ensure that an existing issue that impacts them is resolved and using the leverage of the sale to try and ensure it happens. It certainly will impact the buyer when they take ownership only to find out there's an issue and potential ill will with the neighbour. I'd also be slightly worried about the neighbour being a dick, although if they're just exasperated because the previous owner was a dick and this is materially impacting their property then that might not be unreasonable. I would expect this to be put to the seller to demonstrably resolve before the sale goes through.