Although your fiancé had been divorced for a year before the two of you started dating, based on his ex's reaction to the news of your engagement, I would have to say that their relationship is not over and that they have 'unfinished' business that the divorce is still addressing.
This poses a bigger challenge for you and the role you would like to play in the life of your soon-to-be stepdaughter.
For those couples who have had a 'good enough' divorce, working out parenting collaboratively can be a benefit to all involved.
For those couples whose divorce is followed by continued conflict, parenting issues only intensifies the hostility of each adult.
Explore the possibility of renting out your home and the benefits and drawbacks that renting provides.