This provision does not relate to the lease. It sounds more like it states that if the damage is partial, that you, as the lessor, has the option to make immediate repairs and allow the tenant to remain in the same unit, or you can delay the repairs and would have to move them to another unit or allow them to break their lease with no penalties and leave. The only way you could break their lease would be if it specifically stated that should there be damage from a fire found to be the lessee's fault, that they would be asked to vacate and thus the lease would be void. If the tenant has broke the terms of the lease by any provision, such as noise, late rent, etc., you have the right to ask them to vacate the premises and that the contract is voided due to their breach of contract, but you must give them adequate notice as is stated in the lease (whether 30 or 60 days). If they refuse to leave then you can begin eviction through your local civil court.
So, if the lease does not make a statement concerning the specifics of them having to lease or you being able to evict them due to negligence of a fire, then they are only required to leave if they so choose. (But again, you can terminate the lease if they have violated any provision of it.)
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