The police are correct. If you are paying rent you are renters.
But... that really doesn't do you any good unless you really want to pick a fight with your in laws. Based on the facts you gave it should like life might be easier if you found a new place to stay rather than share a home with people you are butting heads with so much, that the police got involved.
Technically they would have to give you proper notice and follow eviction procedures. The inlaws would be liable if they remove your items so they are subject to theft. If they throw your property out, you could file a complaint against them. However, I agree with my colleague, you should move as soon as possible.
They can't just throw you out. They have to follow proper eviction procedures.
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If you live there and pay money, then you are tenants and pay rent. Consult with a landlord tenant lawyer if you wish to fight the case.
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Dear Babylon tenant:
Your in laws are either going to do you wrong, and illegally evict you, and get themselves in trouble, or they will figure out the correct method for making you move out from the house, legally.
It is so simple to do this legally, and the police know this, and that is the reason your in-laws were told that their idea of their right to do what they want in the house, is not allowed by law. But at the end, if they toss you out, you will need to make the criminal complaint, and that may not help advance your interests or that of your ex-family.
A New York landlord may end a month to month tenancy outside New York City with a one month notice of termination of tenancy. If your in laws go about this the right way, and assuming that your rent due date is the first of the month, they could serve the proper notice on you this month and end your right to stay in the house as of June 30, 2013. And, if you do not move out, they will start the court case and the judge will grant their request for a judgment for possession and for a warrant of eviction.
Just for a moment, your in laws have to think about this, because even if you were no more than a guest, once thirty days elapse, they could not just lock out a guest and throw away the guest's personal property. At absolute minimum the unwanted guest is a licensee entitled to a ten day notice to quit, and then if the guest/licensee does not move out, the court case could turn to the court for relief.
So whether a guest is in occupancy longer than thirty days, or a month to month tenant, there is no legal method for a self-help eviction in New York. A guest is entitled to a licensee ten day notice to quit, a month to month tenant, a one month notice of termination of tenancy.
So why not see your own lawyer?
You have free confirmation from five attorneys that you are right and the in laws are wrong, but not one of us, is likely to be standing with you and your stuff at the curb if they go along with their crazy plan.
The answer provided to you is in the nature of general information. The general proposition being that you should try to avoid a bad outcome if you can.