boundary wall

What is the name of your state? CA
We bought our (30 year old) house about 2 years ago. The first year, we rented it back to the sellers. The beginning of the second year we moved in and started to do some fix-up work. After considering how we wanted to remodel the house, we noticed the wall on one side of our property was very close to the house and may be inside the set-back. We weren't sure whether the house might have been built inside the set-back, so we decided to order a survey. The survey discovered the wall was 8 feet inside our property at the back of the property. The property lines on either side of our house expand as it goes from front to back. The wall is about 4 feet from the side of the house on that side; the actual boundary line is probably at least 5 to 6 feet from the side of the house.
The neighbors maintain they had the wall built to replace an existing wood fence when they had their house built 13 years ago. We are the 4th owners of our house since our neighbors built the wall. They maintain they are not liable to have the wall removed at this point. (They already told us they plan, in about a year or so from now, to retire, sell their house and move out of state.
Our questions: Can we legally required them to remove (or move) the wall? Or, can we place a lien on their property for the value of the our land they have on their side of the wall?

Hmmm. AS one who has a side fence 11 feet inside the lot line (the driveway runs outside and alongside the fence, I'm not sure whjay you believe that all fences must only be on the lot line.? You can create a gate and garden or otherwise use the land on the other side. I use my land outside my fenced yard area, which is not on any lot line.

The wall is slum block, 6 feet high. The neighbors have their back yard completely enclosed, and have approximately 200 - 300 square feet of our property in their back yard. The lots are not that big to begin with. I'm not sure how practical it would be to put a hole in the wall and try to use the other side. The problem is that the wall is inside the set-back requirement from our house, which is at least 5 feet from the house. It's too close. To take the wall down will cost several thousand dollars.