Your neighbor should contact a lawyer.
Even if it's deeded to him, he may not own it any longer. (That happened to me.) In my case, the tax bill for the garage space was separate; the ownership (deed and lot number) were separate. The city failed to send my lender (or me) the tax bill. Eventually, the city sold my space to someone else for back taxes. I still had the deed, but no longer had the ownership.
Your neighbor can do a bit of preliminary work on that by checking public records and seeing whether he's still listed as the owner.
If there was a title problem, then--if he had title insurance on the garage space--he may be able to get the title company involved on his behalf.
If the problem is just that there's someone else using the space--it's still deeded to your neighbor, he's been paying taxes on it, he's still listed in the public records as the owner--it's likely he can get it back.
I'm not a lawyer, so this isn't legal advice. What your neighbor may be concerned about is what's called "adverse possession." But your neighbor needs a lawyer to sort through all the factors--such as I mentioned above--and then recommend a course of action.
Hope that helps.