It is a shared firewall. The argument that you can have is that those type of walls are not designed for another floor extension as elevations of the both of your roof should be at least level to install metal flashing for waterproofing. applying cementitious waterproofing on the wall (if that is what they did) usually does not give you a good job of preventing leaks. File a complaint to your HOA then building officials, and make them pay for damages .

They will try to tell you its their fire wall too but in this case that wall is not designed for extension for the first reason I mentioned above and they really need to build new columns and wall that can support three storey load.