By Cliff Renfrew - Radar Reporter
The former stars of The Hills, who have been pleading poverty in recent interviews, have been holed-up rent free at the stunning property that is owned by Spencer's parents William and Jane.
It sits in a gated community of the ultra- rich enclave of Carpinteria where the once very public pair now live their lives in a much quieter manner.
A source told RadarOnline.com: "They may have blown through their cash but Heidi and Spencer are hardly slumming it are they?
"Spencer spends most of his time reading his wacky books while Heidi likes to tan herself on the deck.
"They occasionally hit the beach but Spencer always makes a sweep first with his binoculars because he is paranoid that spies are watching them.
"He even asked some paparazzi photographers that he used to work with if he could buy one of their long lenses so he could take some images for himself because he thought people were spying on them.
Property records show that Spencer's parents bought the stunning property in 1992 for $800,000 - the 3,000 sq ft home has four bedrooms and four bathrooms plus a large deck.
In a recent interview with the Daily Beast the couple admitted their break-up, divorce petition and reconciliation was all staged to try and stoke fresh media interest in them.
Spencer revealed: "At that point we were pulling our last cards - we felt the hot air balloon losing its gas. And at that stage our income would be selling the photo that would go along with the divorce."
At the height of their fame the couple was earning a small fortune from staged paparazzi images that tabloid magazines could not get enough of.
But that money soon disappeared as Heidi spent a fortune on plastic surgery and an estimated $2 million on her ill-fated pop career while Spencer blew his cash on clothes, cars and a lavish lifestyle with a large entourage of male hangers-on.