Why would the neighbor agree to suddenly get their "own" water (drill their own well)?? That would cost the neighbor $8000- $10000, and there's no way they would agree to that. Unless the seller pays for it for them or something, or part of it.
Yes, I would consult an attorney. And, being a lender, its possible that the mortgage could be an issue. Feel free to call me if you'd like. (I used to live in Turners Falls for a short time....)