The thing with the 3 70 m is correct.
Not necessarily. There are two ways to remedy the building violation. Either the TE assumes the setback area on her property in accordance with Art. 6, paragraph 2, BayBO, which is usually legally secured by entry in the land register. Then you would be right, and I would fully agree with the statements of . Or the TE only signs the acknowledgment of the building documents for retrospective legalization. This does not burden her own property; the TE thereby only expresses that the development to be legalized does not bother her. For the LRA, this signature then opens the possibility to grant a deviation to the neighbor according to Art. 63, BayBO. There are then no building restrictions or loss of value. Whether one is willing to do this for good neighborly relations or a handful of dollars must be weighed individually.
Since then, the seller has been trying to come over with his architect (which we do not want...
I recommend having this conversation, signing nothing, getting the documents handed over, and having the LRA explain the consequences of a signature. If you feel uneasy, politely but firmly leave the problems to those who caused them.