I just moved into a house, the landlords are very nice and really like us. His grandfather built the house, so he takes very good care of the place.

However, I noticed that not all the outlets were the new 3-prong type. So I checked behind the plates, and sure enough, the outlets that had three holes had the ground wired to the white neutral line.

Now, I'm sure this isn't up to code. Besides connecting the case of any device with a ground plug directly to a current-carrying wire...

So what are my options? Call the landlord and accuse the previous tenants of modifying the wiring out of code? Call city code enforcement (this seems bad)? Replace outlets with GFCI and don't mention it?

Will GFCI allow a surge protector to protect our electronics (computer, laptop, etc)?

I just checked and the fridge is on a cheated plug How bad is that?

Since it is a rental, insist that the landlord rectify the situation.

Conduit? or Just a wire pair?

RR

I was told to use GFCI in my 1948 house with the same issue.

But I'm not an electrician, hope I'm not giving bad advice

GFCI wont do anything without a ground connection.

In for this week's electrical train wreck.

GFCI will function without a ground.

If the cable only has 2 wires they really should be 2 prong plugs.  What you are describing is a method we used to trick inspectors if getting a home inspection done for a house going up for sale. Inspector would plug in his tester and it would show a ground.

That is just about the most dangerous thing i come across in old houses. A loose nuetral can carry up to 200 plus volts on it . Floating Neutral. So consider a grounded appliance with a metal housing that has 200 plus volts on it! Please get the landlord to fix or call local inspector to have it diagnosed and he should have the landlord fix it.

GFCI is a code-allowed substitution for an ungrounded (2-prong) outlet.

I've never seen that before but that's dangerous and needs to be fixed.   The ground  is a safety designed to keep equipment from becoming electrified.  Tying it to the neutral is a good way to hurt someone.

Is it in conduit?  Just two conductors?  Or is it romex cable with 2 conductors and a bare ground wire?

The proper fix is fairly expensive.  Pull apart each receptacle and replace with GFCI labeled "this receptacle is not grounded."  

If you are lucky enough to ave romex installed, you can make it safe if you have a little mechanical ability.  

It doesn't sound like you have romex though.

Dunno what romex is, the box behind each outlet has four wires coming in: two black (hot), two white (neutral).