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I'm sorry to hear about your situation. They MAY have the right to do so. That is, if the covenants, codes, and restrictions allow them to do so, they they may. The construction workers are essentially "agents" of the homeowner, and are bound by the same restrictions of the homeowner. Now they are not "bound" by a "cease and desist" letter. A cease and desist letter is worth the paper it's written on plus the belief on the part of the recipient that the sender is going to do something about it. I could send you a cease and desist telling you to stop breathing or I'm going to sue you. You'd dismiss that as crazy, and rightly so. Now an HOA would have a much better chance at actually taking the case to court and getting the builder to stop building. But if the builder is not willing to stop with a cease and desist letter, the HOA would have to seek an "injunction" in court demanding that they stop.
Hope that clears things up a bit. If you have any other questions, please let me know. If not, and you have not yet, please rate my answer AND press the "submit" button, if applicable.
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Thank you, ***** ***** luck to you!