"I have never lived here."
Translation:Já jsem tady nikdy nebydlel.
a few things are off in your understanding. 1) "if it could not" (be in second position) is actually more like "if you choose not to put it there". 2) there is always room for "tady" in the second position because you can bunch things up in there. it actually gets bumped to the right fringe of the bunch, but it is still in the second position. 3) and if you choose to put it outside the second position (bunch), it is seldom happy at the end of the sentence; the sentence-initial position tends to be much safer. 4) if you do stick "tady" at the end (after the second position/bunch), you run the risk of putting so much weight on it that it may not correspond to a reasonable reading of the english version of the sentence. Já jsem nikdy nebydlel tady. is rather akin to It is here that I have never lived. whether that is accepted in this course or not, in many real-life situations it may be unacceptable--say as a response to "Bydlel jsi tady s Kateřinou?"/"Did you live here with Kateřina?"