Room mostly small and in bad condition (7)
I believe the answer is:
parlous
'bad condition' is the definition.
'parlous' can be an answer for 'bad' (thesaurus). I am not sure about the 'condition' bit.
'room mostly small and' is the wordplay.
'room' becomes 'parlor' (parlor is a kind of room).
'mostly' means to remove the last letter (most but not all of the word).
'small and' becomes 'us' (I can't justify this - if you can you should give a lot more credence to this answer).
'parlor' with its last letter taken off is 'parlo'.
'parlo'+'us'='PARLOUS'
'in' acts as a link.
Can you help me to learn more?
(Other definitions for parlous that I've seen before include "Dangerous" , "not at all safe" , "Dire" , "Risky" , "Precarious (state)" .)