Old flue needs replacing; that's sad (7)
I believe the answer is:
doleful
'sad' is the definition.
(I've seen this before)
'old flue needs replacing' is the wordplay.
'needs replacing' is an anagram indicator (letters placed in new positions).
'old'+'flue'='oldflue'
'oldflue' is an anagram of 'DOLEFUL'.
'that's' acts as a link.
(Other definitions for doleful that I've seen before include "Causing grief; sorrowful" , "Sad" , "Sad-looking" , "down in the dumps" , "Mournful" .)