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As mentioned already, the $1000 is really... nothing when you think about the situation from the parent's point of views. The couple is living in their house and not paying any of the utilies/taxes. I'm actually a little surprised that the parents haven't said anything about them free loading to that extent because it seems like there is very little communication between the couple and the parents... I mean if they have sat down and talked about it before and the parents were okay with them living in their basement for free then thats fine. But I doubt that that is what happened, given the circumstances.
About the $20k that they spent on renovating the basement, did they first consult with the parents? Maybe the parents' are thinking, "..What the hell, I thought you guys are just planning to stay here temporarily and are going to move out asap. Why are you spending money renovating? How long do you plan to stay!?!? "
In regards to the parents out right rejecting baby sitting. Could they just be scared that if they agreed to baby sit, that the couple would plan to stay even longer? I mean, it seems like from their perspective, that the couple has no intention of leaving any time soon.
Either move out as soon as possible, or sit down and talk with the parents. Tell them that they are stretched out on their budget and it would not be wise for them to move out now. BUT, then agree to pay for rent and/or bills and stuff so as to establish the fact that the couple doesn't want to free load off of them entirely and that they would like their own privacy.
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