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The allowed building zone per lot was made to prevent houses from basically touching like that. The neighbour was not authorized to build this close.

The neighbour's plan, or construction crew, ignore the legal building zone, and the neighbour asked the council for a "relaxation", which was granted.

It should not have been granted. This is a hazard in multiple way.

Dangerous to do any maintenance between the buildings and a fire hazard.

Of course all of this would have been avoided by the developper not making ridiculously tiny lots to mix-max his profits.