I Just Bought Cottage With A Well On My Property.neighbor Has Plumbed Into It For Years And Says He Has A Half Interest In My Well.

He had a third interest for a few years 20 years ago, the informal agreement with the owner two generations ago was never recorded ,no covenant with the land, all parties are deceased. I never signed anything and was told it was a recorded agreement by my realtor ( now his)but only found out it wasn’t recorded when I checked my title after he listed his place for sale in July and, when I told him he had no right to water he offered me cash (not much) to make a contract for half interest so he could sell it with his cottage.
Meanwhile an oak tree crushed his rooftop water tank so I cut off his water pipe because the tank was gapping open, he tried to patch it with duct tape, and it was a health issue. I then proceeded hooking my well up to my house as it wasn’t plumbed to my place when I bought.
He and his lawyer are now demanding $20,000 (and an additional $200. Per day until full restoration) in 10 days or he sues. Lawyer says I admitted to vandalism and acknowledged the existence of an unrecorded agreement. Is this extortion and should I lawyer up? Location: Kern County,California
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