Your covenants and the view are more the issue than the threats. You can be required to follow the written and properly recorded covenants. You cannot be required to sell. The language of the covenants will govern how the enforcement against you. You should clean up the lot according to the rules and if it was me ,I would offer to sell at a price that would allow you to buy and build elsewhere because you may be better off not living next to this guy life is too short. By offing the vacant lot at a price far above market or realistic value you will show you are not intimidated and can deal with the behavior.
Only If and until you and I sign an Agreement for Legal Services, I am not your attorney. These answers are provided for informational and/or novelty purposes
This is an interesting situation. You pointed out that you are in violation of the covenants. However, you noted wisely that the covenants are not being enforced. There is plenty of case law that deals with unenforced covenants and how over time they become unenforceable. Without knowing all of the facts, it is impossible to tell you that the covenants can no longer be enforced. Similarly, without seeing your exact covenants, it is difficult to guide you as to your best steps. You certainly have the option to simply ignore the neighbor and see what happens. If he brings the issue before the board, then you can decide to fight the issue (this may cost money for the fight itself, attorney if you wish, do the covenants provide additional fees and penalties for losers in a fight like this?) You might lose at the board level, at that point, you can simply comply and abide by the decision or there may be opportunities to appeal the decision and/or bring to court. This may be something to discuss with your attorney before you go too far.
As for the neighbor's efforts to coerce a sale, this may be a more difficult issue. WA has a criminal code that defines coercion and the elements to prove this. I am not sure that you will get much traction here as this is something that would require the local prosecutor's involvement.
As for civil liability for his actions, I am not sure that this is the best forum (maybe a torts or personal injury section of AVVO) for the question. As he is free to argue the covenant issue, just as any other neighbor, you may not have a cause of action. You would have to show some type of harm. At this point, you don't have to sell your land.
You may have other courses of action that you could discuss with your attorney.
Posting questions and reviewing information received from AVVO does not create a lawyer client relationship and such information should not be construed as creating such a relationship.
I echo everything said in an earlier post about abandoned covenants. I also agree it is difficult to give good advice without seeing the covenants. I do know that in Island County most CC&Rs require the board or a subcommittee to enforce the covenants. This means the individual homeowners would need to make a request to the board in order to enforce a covenant that is supposedly being broken. The board would then take action, or decline to take action. In otherwords if your covenants are like most in Island County the person acting as an individual has little to no authority to tell you to cut the shrubs. HOWEVER, if your CC&Rs allow individual homeowners to enforce it could be a different story.