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tangled plumbing--what to do?

I live in a fourplex townhouse development and today my neighbor's water heater developed a leaky connection. We looked everywhere for her unit's shutoff valve without success. Eventually we discovered that her water heater, at least, is feeding off the plumbing for my unit, through the party wall. I could see where the inflow line outside her kitchen had been cut off at some previous time, and I would assume that's when someone had this brilliant idea. (Neither of us were here then.)

We're on well water so metering/water stealing isn't a problem, but I'm planning to have the plumbing completely redone here when I remodel and I don't feel inclined to let that continue, since sooner or later I'm sure they'll decide to opt for municipal water instead. Also, I travel a lot and always shut the water off when I'm gone--I don't really understand how nobody in her place ever noticed this before.

What's the best way to handle this? Should I just tell her flat out that she'd better start saving up now?

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