Are you positive this cat is owned by this neighbor, or maybe just being fed out of kindness?? I would talk with her and see if she really wants the cat. If she says she does and is still not providing a good home maybe you could take it in and if you don't want to keep it, at least find a home. This may not seem like the right action, but in my opinion if the cat is neglected and uncared for they don't deserve to own it.
Trap-Neuter-Return (TNR) is a full management plan in which stray and feral cats already living outdoors in cities, towns, and rural areas are humanely trapped, then evaluated, vaccinated, and sterilized by veterinarians. Kittens and tame cats are adopted into good homes. Healthy adult cats too wild to be adopted are returned to their familiar habitat under the lifelong care of volunteers
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