Is severing negative communication with an "incompatible" person a big no-no in the Buddhist pracice? A close relative of mine who I shared the living space with has passed away recently from an unrelated injury. The relative was a good person but inherently "bossy", always getting their own way and intruding my personal life and space in ways I was not a strong enough person to continuously tolerate.

At a certain point I've "had enough" and decided that severing all communication was the best course of action for us both to avoid painful arguments, so I did that.

I did not feel contempt to that person and understood a lot of their antics were due to their very old age and difficult childhood, I was wishing them well, and was hoping they would make a first step and apologize eventually, which they never did.

As a longer term solution I was hoping to move out and live alone, confident that would help me regain my bearings, but there were setbacks in my apartment search, so I did not make it in time either.

Now that they're gone, I wonder how a person following the Buddhist precepts would have handled this. Showing compassion every once in a while is one thing, having your life and personal space invaded with petty commands, requests and criticism day after day, even when you're trying to meditate, seems like another.
The Pali suttas say (Snp 1.10; SN 10.12) there are four qualities for the household life (which are also to be applied to any significant relationship), namely: 


Sacca (truthfulness; honesty; straightforwardness; openness; no secrets) 
Dama (training in self-improvement); and Dhamma (principles) 
Khanti (patience; forbearance; tolerance) 
Caga (sacrifice; generosity) 


Therefore, in a significant relationship, a person should truthfully communicate to the other person any concerns they have about their behaviour and both should train in self-improvement to abolish that unwholesome behaviour. 

If the other person does not respond and the relationship is toxic or harmful (intolerable) then cutting ties is OK. For example, one sutta says a wife (SN 37.30) without ethics is expelled from the household.