Over the past two decades, the proliferation of backyard dwellings has intensified, driven by urban housing unaffordability. Backyard dwellings are self-contained structures constructed in the yards of other properties and are characterised by overcrowding, poor sanitation, and lack of basic services, including waste management infrastructure. However, scholarly attention has often overlooked the legal complexities and social marginalisation experienced by these communities. This study investigates the dynamics of legal ambiguity and marginalisation within South African backyard dwellings. Qualitative interviews were conducted with backyard dwellers in Kraaifontein, Cape Town. The results highlight that backyard dwellers navigate legal ambiguity, occupying a liminal space between formal housing and informal settlements and exist at the mercy of landlords who give them numerous restrictions on water use, limited access to municipal bins among others.