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I agree with Stonhenge. Inform the client that in all likelihood the tree will die and have them inform the neighbor. If the client tells you to go ahead with it, have it clearly stated in your contract that you are not responsible for damage to the tree and that you have informed the client of the risks involved. If you are asked to go ahead at that point I would use a root barrier to direct the roots below your base if indeed the tree does not die. We discuss the use of root barriers in detail in our Foundations Skills class at the School for Advanced Segmental Paving, and it is frequently a topic that generates a lot of questions, because it seems as if not to many hardscapers have heard of them. Make sure to cut the roots with a saw and not an ax. This will minimize any vascular damage done to the tree. Also, as an FYI, one manufacturer of root barriers states that cutting tree roots no closer than 3x the diameter of the tree from its trunk will lesson the chance of harm to the tree. Good luck.
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