Lives in dress -- i.e. being slovenly (7)
I believe the answer is:
resides
'lives in' is the definition.
(I've seen this before)
'dress i e being slovenly' is the wordplay.
'being slovenly' is an anagram indicator.
'dress'+'i'+'e'='dressie'
'dressie' anagrammed gives 'RESIDES'.
(Other definitions for resides that I've seen before include "Sojourns" , "stays required" , "stayed in Scotland" , "Lives, dwells" , "stays in Peebles" .)