So our garage is built against a hillside. The garage is against the property line and I have no control over the flow of water that sinks into the earth on the opposite side of the garage's back wall. When it rains for a length of time, water seeps through the garage and drains across the floor of the garage (which is primarily used for storage, not for parking).

The previous owner evidently had the same problem and tried to apply a waterproof paint to the concrete -- not something like Dry Lok but rather a much thicker paint that never really sank into the concrete but rather hardened like a protective layer against the concrete.

As I think about how to work on waterproofing that wall, it seems pretty obvious to me that I should remove the previous layer of paint. I say that in part because whenever there is any sort of crack or weakness in that paint, it is easy to just pull at the paint until it crumbles and falls away from the wall. In other words, a lot of the paint is barely even adhering to the wall at this point.

The neighbor says, however, that I should leave that paint on and just paint something else over it. Intuitively, this seems wrong to me, but I cannot explain it in ways that satisfy him. Can the denizens of the Corner provide some semi-technical advice here? (And that includes differing opinions.)