Zoning Problems
If you suspect that your neighbor may be skirting local zoning laws, or that a zoning law is not be enforced as it should be, you should contact your local zoning and planning office (or, if for whatever reason this does not work, the office of the city attorney). You can ask them to explain the details of the issue to you as well as for information on how to proceed. The laws governing the complaint process with regard to zoning violations has no set form. Some municipalities will require a written complaint; others will accept it by e-mail. Many follow up on complaints with inspections. Regardless of the details, it is preferable to attempt to handle this type of matter though the system provided by your city or town, as it is more simple and infinitely cheaper than pursuing the issue by means of a lawsuit.
It should be noted that disregard for zoning laws and ordinances can result in harsh consequences. An example can illustrate the rather far reaching consequences of violating zoning laws: An individual builds an addition on his house (zoned in an exclusively residential area) so that he can run his hair-cutting business. While he lives there, this all goes smoothly; the neighbors and town do not notice and he is not fined or penalized (as he could be if he were to be discovered). Then, he decides to move and sell the house. This is where the problem arises, because he cannot guarantee that his house meets the standards of the building code. Consequently, he could be forced to accept a lower price for the house or even be forced to take the house off of the market. The issue is even further complicated if the property is sold without the problem coming to light. If it is discovered at a future time (due to a tax assessment or some inspection) the new owner could be fined or even forced to tear down the illegal addition to the house. The new owner would then probably seek to implicate and somehow seek retribution from the original owner. Simply put, it is very risky to ignore zoning ordinances.
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A guide to understanding Zoning laws and issues.