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There's a line to walk, between being an accommodating neighbor and appearing to be an uncooperative, potentially lawyer-happy PITA, with these things. As I get older, I get less accommodating - part of the old-fashioned "good fences make good neighbors" deal is an awareness that my property is valuable to me, and I expect you to respect that.

I would document the conversation with a letter or an e-mail, describing the conversation and the date. Nothing aggressive, just a friendly recap of the conversation and of your concerns.

Now, if a heavy rain comes some day and the wall of that pond fails and you get 100,000 gallons of water and mud in your patio doors, or if that pond of his has diverted the water to an underground flow into your basement, you'll want some documentation of the history.

If your neighbor has half a brain he'll go out there and double check the dam, and think about his need for it. Maybe he has every right to have that dam, and you need to do some work on the drainage on your property. Or maybe not.

In California, it would be a rare situation where someone could build a new pond - maybe on a farm creek draining directly into the ocean. Water rights are a big deal here. Except in one of those rare situations the local water authority would show up with a dozer, take down the dam, and give the homeowner a bill for the work along with a hefty fine.
 

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The pond was there when you bought the property? Then it sounds as if it's simply your problem, then, for you to deal with by grading, drainage, etc., on your property. Rent some earthmoving equipment and have some fun.
 
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