Generally speaking, if a fence or retaining wall is on your neighbour's side of the property line, then they're responsible for paying for it. Where it is on the property line, they need to get your permission before building it, and should attempt to come to an agreement on the price. Depending on where you live, they may also need a permit from the city, and supervision of its construction by a geotechnical and structural engineer.
There are several factors that may impact who is responsible for the cost of building a retaining wall:
- Whether you have an obligation to build or contribute to the retaining wall. Such an obligation can arise, for example, where a retaining wall is a structural requirement of the lot grading. Or where there is a private contractual obligation to build the wall (for example, where there was a condition in the contract for purchase and sale of the property).
- Whether your neighbour has a common law right of lateral support to land. For example, does your neighbour have the right to build the retaining wall to support your land, to prevent it from damaging their land? There is a general rule of law that a landowner has the right to have their land supported by their neighbour’s land and their neighbour has the duty to maintain that support.
In short, there is no clear cut answer. It will depend on the particular facts at hand. It is not an automatic right of your neighbour to send collections after you. You may want call the building department of your local municipality to find out more information.
To deal with the problem, see our page on fences and neighbours, under the section "Deal with the problem." There, we explain practical steps to take and your options should you wish to pursue legal action. These are also the venues in which your neighbour could choose to pursue legal action against you if they insist on payment.
It's a good idea to keep records of any conversations you have with your neighbour. Note down dates and what was said, and indicate any agreement (or lack of agreement) that was reached. Write down details of the quote that was obtained, and your counteroffer. These notes may assist you if you need to defend yourself in a legal action. You may want to write a letter to your neighbour, confirming your understanding of your conversations so that you have a written record. Keep a copy of the letter.