If someone enclosed common property without authority, then now you are aware of that, then they will need to restore it to its original condition.
You are probably right in thinking that this are has, at some point been absorbed into the lot by the neighbouring owner. And you are right in thinking that, in the absence of common property by-laws recognising the transfer, it is still common property.
But the person who now owns the lot probably bought it in good faith, believing that this room belonged to the lot. So before anyone starts calling lawyers, maybe it’s worth asking who needs access to the property and if that is likely to be denied to them when the facts of the matter are spelled out. Simply providing a copy of the key so that the OP can access their water heater if need be would save a lot of unnecessary heartache and expense.
Hower, if the lot owner refuses to recognise that they have been misled, it might be time for the OC to flex its legal muscle.