Lived in when engaged (8)
I believe the answer is:
occupied
I believe this is a double definition.
'lived in' is the first definition.
(I've seen this before)
'engaged' is the second definition.
('occupied' can be a synonym of 'engaged')
'when' acts as a link.
(Other definitions for occupied that I've seen before include "as ladies often seem to be ..." , "Inhabited, held" , "Busy or inhabited" , "In enemy hands" , "Filled or in use" .)