Yikes, I hate this kind of stuff! I'm not 100% sure of the legalities, but isn't there something about use and care of a property? As in, if you use/care for it a certain amount of time, it becomes yours? If that's really the case and not just folklore, then it's a GOOD thing you have that notarized paper to reinforce that the area they're using for yard does NOT belong to them...despite 8 yrs of mowing it and using it.

As for the house possibly being on your property...I think you'd find it very difficult to do *anything* about that if the house was there when you bought your house. It's one of those situations where you should have had your property surveyed before buying it so any disputes could be addressed before purchasing it.

I would think that you could "cancel" the easement situation with nothing more than a letter, perhaps notarized and sent via registered mail. It depends on what you want...do you want the neighbors to stop using ANY of your property?