
(= When I was at their place at the last time, they lived in a small two roomed flat yet at that time. - translation attempt
Als ich zum letzten Mal bei ihnen war, dann lebten sie noch in einer kleinen zweizimmerigen Wohnung.)

Suggestion: "When I was at their place last time, they were living in a small, two-roomed flat."
:)

I've added the suggested version. Thanks a lot.