(1) If the dwelling unit or premises are damaged or destroyed by fire or casualty to an extent that enjoyment of the dwelling unit is substantially impaired, the tenant may:
(a) immediately vacate the premises and notify the landlord in writing within 14 days of the tenant's intention to terminate the rental agreement, in which case the rental agreement terminates as of the date of vacating; or
(b) if continued occupancy is lawful, vacate any part of the dwelling unit rendered unusable by the fire or casualty, in which case the tenant's liability for rent is reduced in proportion to the diminution in the fair rental value of the dwelling unit.
(2) This section does not apply when the fire and casualty damage was caused by the purposeful or negligent act of the tenant or the tenant's family or guests.
(3) If the rental agreement is terminated, the landlord shall return all security recoverable pursuant to Title 70, chapter 25, and all prepaid rent. Accounting for rent in the event of termination or apportionment must be made as of the date of the fire or casualty.