Update:
SIL got married and moved in with in-laws. They pay a nominal rent.
Planning to move out to California and live for free in grandma’s house.
But wait? Divorced mothers can’t move with their kids out of state if the dad objects.
SIL signed over all custody of her daughter to make this move. She gets two weekends of visitation per month.
How’s it going with you and Mrs. Cad?
I think she realized how codependent she was being after SIL moved in with her (then) boyfriend. And now with SIL discarding her daughter so she has a place with no rent, MC has washed her hands of the whole thing.
Wait, wut??
Signed over custody to whom? The dad or MrsCad?
Have you done any “I told you so”-ing to MC?
Wow, that was an unexpected turn. I feel bad for all involved, mostly the little girl. But at least maybe now she’ll see responsibility modeled and not view sponging off other people as normal. I’ll admit having had trouble setting boundaries in my past but am moving forward and more able to do so now. I just think when you’re in the thick of it it’s so hard to face what’s really going on- that someone you love and think of as family is straight up taking advantage of you.
The dad. When given the choice between her kid and free rent - Let’s sign those papers!
Her brother did something similar - ex-wife ran off with daughter and new wife wants him to worry about THEIR kids so fuck it. Why pursue visitation rights amiright? Of course SIL couldn’t believe someone would ever just give up on their child like that. He such a jerk to do that to his daughter amiright? And of course SIL’s dad and real sister are just like fuck it, so what if you give up custody.
Mrs Cad who went through a living hell with her ex for 18 years over similar issues and even worse told her, “If you do this, you will regret it the rest of your life.” and when blown off has basically said she done with dealing with SIL’s issues. Remember all the sacrifices me and MC made so the daughter could stay with her mom? And all of that so she could turn around and say hey free rent amiright?
You are clearly not (or no longer) married. 
I have watched this thread with baited breath. Your SIL could be one of my sisters. Although, none of them have (as yet) given up custody of her child for free rent. All the rest, yeah, BTDT.
I choose not to rant about them, but man oh man!
Anyway, I just wanted to ask if you & MC have kept in touch with the niece? I hope so! As has been stated, she could use the contact with fairly sane folks. I know that this sane stuff is subjective, as you are on TSDMB. Yet, you may be the sanest folks that your niece knows. Try to stay in touch, for her sake.
IHTH, 48.