Accommodation question

We are preparing to apply for my spouse settlement visa in the next few weeks. We had gotten word from my father in law that we could stay with them, and they'd happily provide us with the necessary documentation. This evening we have discovered since our last visit they knocked down a wall to make a giant bedroom. This means that they now have a home with 2 reception rooms, a kitchen and just 2 bedrooms. We are a couple with one young child. Does this now render us unable to use them for the application? We do not want to arrange a rental before our approval and are all moving together from the US.  I have read the requirements several times and can not tell if a living room can count as a bedroom and I wish they hadn't decided to knock the wall down. Lol thanks for any help. 
Extra clarification: it was a former council house in a large estate that they own outright, it's just his parents who live there in their new massive bedroom.

Yes, you can use a living room as a bedroom. I think the square footage has to be at a certain minimum if I'm not mistaken. But yes, two bedrooms and a living room is fine. How old is the child. Depending on the age, I think they may be able to stay in the room with you.

Two bedrooms and two reception rooms would be considered overcrowded if more than 8 people.

Thank you, the child is only 3 and by accommodation rules counts as  half person. So at 4.5 people, we are fine. Thanks again.

See also  MAA12 Overcrowding.