I think what you are asking is - In the lesson phrase, Sabemos dónde vive su familia. and the alternative from dylancmiller isn't su familia the subject? The answer is no, it is the object of the verb phrase in the dependent clause. The sentence breaks down like this:
(Nosotros) is the subject identified by the verb Sabemos which is in itself a complete thought ("we know") but leads to the question "we know what?" -- donde vive su familia which is a direct object clause identifying what we know.