The dysfunction has been there for years. I don't think mum ever got over being left with 4 kids by her first husband. She's even told my step dad (the man who fed,clothed and put a roof over her kids head) that her first husband was a better man. My 63 year old sister now wants photos of her "real" dad.  She has been going around telling anybody who will listen that her SD hit her mum. My mum has said this too. I know what you're thinking.  The recordings he took clearly audible show my mum. Hitting. Kicking and spitting at him. She clearly says she will go out and tell people he'd hit her. When the police were called they had to stop her from hitting HIM. Because she believed hr was doing the same to her as her first husband did. That is cheat. By the way. . . she's 88 years old. All because my sister couldn't keep her mouth shut.  Just before this all started .I received a call one evening from my sister. They had BOTH agreed she had the go. She was in her car with nowhere to go. They offered to pay for bond and advanced rent on a flat. Eventually it was all forgotten. She went back home and a short time later my mum was kicking HIM out. He is much better off where he is now. 

First of all,thanks for your responses and ideas. I'll come back on a few points raised.   I contacted social services because I was concerned the way my sister has such an influence on her mum. I was worried about my mum. Did she have dementia? Was she frightened of her daughter? Was she being bullied? Why was she believing all the rubbish my sister was telling her. They interviewed her and my sister (separately). They said both had capacity. They didn't even bother talking to my dad. I heard a little of what my mum had said. That he was hiding her medication. HE was the one who went for it on the bus. (My sister has a car).  That he never gave her money. At any time I could go to their house and my mum would have at least £500 in her little box in the cupboard. So I know 100% that thses things she told them were lies. So why turn against her husband so much? The moment my sister entered the room my mum would change from a nice person into a sarcastic bitch. Calling him ugly. Useless. Impotent cheating lying thief. And lots more!!          It took me too long to realise that it wasn't my mum who was being abused but my SD. In fact they both were. But my mum sees my sister as her "child" and blood is thicker than water. No matter what evidence I could present to her to show my sisters lies. It wouldn't have mattered. My SD after all,is only a husband and kids come first. That's why I say "it could happen to you"  my mum has never allowed my sister to grow up. My SD went along with it because he wanted to please my mum. They created a toxic narcissistic isolated monster who I believe knew if mum died first,would be kicked out at long last. SD had to go before she did. So she relentlessly day after day pushed the right buttons. She even told her mum that she wanted photos of her "real" dad. The guy who walked out on her never to make any further contact when she was 4 years old.  The man who worked all his life to feed her now lives alone and his wife hates him because she chose her 63 year old Leach over him.

Im unsure if my sister has mental issues or if she has been very cunning? Probably the former.  When she talked about this other woman she talked as though she really existed. She even said she would take a lie detector test. I have no doubt that she would pass one because she really believes in what she is saying and she constantly fed my mum with information about this other woman.  Her story would change though. Sometimes the woman was big with blonde hair. other times she was scrawny with dark hair. She knew exactly what time the woman would walk past the house, where she lived, what her husband looked like and where he worked.  She even said at one time that she had someone to follow her.  BUT, not once did she ever point her out, give a name or an address   or manage to take a photo of her was she walked past the house 4 times a day.  Not once in a whole year!

To be honest, my sister reminds me of the Russell Crow character in "A beautiful mind"  Only he could see the people he saw. He was convinced they were real but nobody else could see them because they were all in his mind.  Nobody has ever seen the woman my sister is convinced was/is having an affair with my SD.
I even pointed out to her how unlikely it would be for a woman who's husband is still working (which must mean he is below retirement age) to risk her marriage  to spend five minutes in the que at the post office with a man 20 years her senior.
When the police were in the house and SD called her out on her accusations, she changed her tune and said "I have never said he is having an affair"  "I simply said I think he fancies some other woman"  She couldn't explain why he would be getting up at 3 a.m to phone a woman he has never met but only fancied from affar.
The DAY after, she was telling my mum that "She has just walked past, that's why he has gone to the corner shop. "He's gone to meet her".
So is that a mental health problem or a deliberate act to destroy a relationship?
I wish I knew of some way to confront her but it is like talking to somebody who is never ever wrong, 
My brother died about 2 years ago. Just dropped dead on holiday. My sister was convinced that his partner had murdered him. She couldn't prove it but she KNEW. She pent months trying to find evidence.  Of course she never did find any but that made no difference.
I have listened again today to some of the recordings my SD made before he was ousted out of his own house.  Believe me, they would make you shiver. I am trying to explain the lack of logic in her behaviour.  Here is an example;

My SD returns to the house (to attempt to sort things out), when he arrives he finds my sister and my mum looking under my sisters car on the drive.  She has lost her keys and they are both searching around trying to find them.  My dad walks in the kitchen and sees them on the kitchen floor.  He walks outside and says "Your keys are here"
Logic dictates that they dropped them in the kitchen.  Not a bit of it. My sister takes the opportunity to convince my mum that he had hiden them from them. That he had them all along and this was one more attempt to disrupt their day but more importantly, to make my mum feel like she is the one losing their mind.
It doesn't matter that they had already been out in the car. parked it up the driveway and been in the house for most of the morning before SD even got there. How could he possibly have hiden the keys from them when he wasn't even there? They had been using them that morning. My sister convinced my mum that there was no way those keys were in the kitchen. He must have had them all morning.  Though how they managed to use the car when SD had the keys is anybodys guess?  You see, logic doesn't stand a chance.
That episode ended in my mum calling the police and telling my SD that she going to cut herself before they arrived and say it was him that attacked her.  She was going to do this because "somebody" had told her that he was trying to get her in a nursing home.  It is obvious who that somebody was.

So IS that a mental illness or just pure vindictive evil?

I know I am ranting on a bit here. Sorry for that, but how does one resolve all this?  Yes my SD is out of the house now and is away from all the crazyness but he is still joint owner of that house and one day both he and my mum will die.  If he dies first, my mum will inherit the whole property and will bequeth it to my sister when she dies.  If mum dies first, SD will inherit the whole property and will bequeth it to me. If they split the property, my sister will on my mums death become joint owner with my SD. SHE will own half his house!  It's a difficult one to resolve. 
In any case, step children do not automatically inherit from a step parent. He has to make a will but a will is invalid if he is still married and a divorce at their age is crazy. Isn't it?
When he was forced to leave his house, he left £4000 in the house and took £2000 which he proceded to put in the bank. Little realising it was a joint bank account.  He did't tell me until it was too late. My sister marched my mum to the bank and froze the account.  That was almost a year ago and unless my mum agrees to unfreeze the account, he cannot access his money.  Will will not agree unless she has his £2000 plus the other money in the account.  So when he left his house, he had no money to pay for a deposit on a flat and spend the next 6 months living with me. In the meantime, my sister lives with my mum in the house and they deny he left them any money when he went.  My sister has just bought a new car. Nor bad for someone who works 20 hrs a week! Sorry for the rant.

Not quite two years from my last post but certainly two years since the craziness started.

SD has been living in his flat now for two years. No contact at all from his wife (my mum) or his Step daughter (my sister).
A couple of weeks ago I found out from a nieghbour that mum was in hospital. The hospital couldn't tell me anything regarding her state of health because my sister had put a password on the medical file. Only those to whom she gave the password could receive any information.  Obviously, she wouldn't give me or her step dad the password, so we had no idea just how ill mum was.

We found out four days after she had died that mum had died in hospital, We think cancer but the hospital couldn't divulge that information, even to her own husband of 55 years. They were living apart but still legally married.  My toxic sister prevented him knowing even when his wife had died.
Wanting to retrieve some documents from the house we bit the bullet and went back for the first time in two years. He also wanted to know about funeral arrangements. (He was quite willing to pay).
Immediately on entering the house, my sister launched into a foul mouth obscene angry obscene tirade.  She dragged up every bit of evil.  It was like she was going to the deepest depths of what remains of her soul. It was like something from the Exorcist. her voice, her face, everything changed.  of course, she blamed my step dad for everything. She berated him for not coming to see his wife for two years.  It was pointless attempting to remind her that each time he had tried he had been subjected to verbal and physical abuse. It was pointless pointing out that they had send a solicitors letter threatening to take out an injunction should he attempt to enter his own house. She phoned the police who came and FINALLY told her that it was her step dads house and he had every right to be there. She no longer did. He hadn't gone to throw her out (Just yet) he simply wanted the house deeds and marriage certificate. Which, suprise suprise were not there!

Don't let this happen to you. Adult stepchildren are adults. Not children. let them grow and let them go.

Thank you Rags and mommabutnotmomma for you replies.
Rags, you sound as angry as I am. It's been really hard to keep coll the last couple of days. 
Momma, I feel for what you have gone through. I don't know if my sister has a mental health problem. perhaps she is just evil?
She was like this way before her brother died.

So what's been happening?
We didn't get to the funeral. Like I have said in previous post, Step Dad couldn't get any access to his wife while she was in hospital and he wasn't told his wife had died. We thought we knew when the funeral was but not the place or exact time so we tried ringing the undertakers who wouldn't divulge any information (blocked by my sister). We called the crematorium. The lady on the phone was very nice and obliging until we gave my mums name where she abruptly changed her tone and said she cannot discuss it any further. Dad had bought a new suit but he never got to wear it. We staked out the house waiting for the hearse but no joy. So we are not sure when she was cremated.
Afterwards, we placed a notice on the door of the house and said. "Mr xxx, the legal owner of this property requires Ms xxx to vacate the property on Saturday so that Mr xxx can occupy his own house".  (or something like that)
Today he has recieved a letter from her solicitors warning he has no right to to evict her from the house. that she will seek a court injunction and she is also going to persue a claim forfinancial provision under the Inheritence (provision for family and dependants act 1974).
So it looks like it's going to be a long drawn out process. In the meantime, SHE lives in his house and he lives in a one bedroom flat, paying rent every month. She has no pride. 

It just gets worse.  Been to seek legal advice today. the solicitor, a very nice chap, says she could apply for some sort of provision from my step dad due to the amount of time she has lived in the house (ALL her life). She is not financially independant and would struggle to afford to live elsewhere. The fact that my mum made a will shows that she wanted her daughter to be provided for, even though the joint tenancy renders the will invalid, the courts might take my mums wishes into account and overule the joint tenancy. She could possibly be granted legal aid, in which case she could afford to take dad to court. He could not afford to defend court action.  She could apply for an occupancy order which would prevent him from throwing her out IF he went and changed the locks.
So, we are no further down the line. But the good news is, he is the legal owner of the house and as such he can enter it as and when he pleases. That is if he doesn't mind being hit, kicked scratched and spat at by a stepdaughter who hates him so much she has never left in 60 years and who hates him so much she wouldn't hesitate to swear she is financially dependent on him.  AS I said right from the begining. 
It could happen to you.

We have been told by two solicitors that step dad has every right to peacfull entry into his own property.  Well tonight he tried to do just that. From the moment he entered his house the abuse started. Inevitably, she called the police who told him that as SHE was occupying the house, they couldn't remove her and he would have to leave. It made no difference that the only reason he wasn't living there was because of all the abuse he suffered. Abuse that he had to get away from.
All we want is for this horrible person to GO. How the hell do we get her out?

police told me that on no account can we change the locks. I told them the solicitor said it might be an option. They told me that the solicitor was wrong!
I am really considering the elder abuse option.  But two years ago I involved social services who decided that there was no abuse, even when I pointed out to them that my sister had convinced my mum that dad wanted to put her in a rest home and was supposed to be having an affair with a as yet STILL unamed woman.  No wonder mum hated him in the end.
Adult children are NOT children. Mum never did my sister any favours by letting her live there all of her life. She prevented her from growing up and having a life of her own. Ultimately it lead to the destruction of her marriage. let this be a warning to all.

It continues,
Just recieved a letter from my sisters solicitor. In it they say that my sister relied on her mother for her housing needs and financial support, that she has a very modest income and no real way of supporting herself. Therefore she is applying for a court order to force my dad to sell his house (that she is still living in). So not only did she poison my mothers mind with her lies and evil stories, not only did she abuse my dad, not only did she prevent him from even attending his own wifes funeral, she now want him to sell his house that HE worked for and give her half.  I just wanna scream.....